HDFC Bank increases loan interest rates by 5 basis points for selected tenures

HDFC MCLR Increase: HDFC Bank has announced a rise in its marginal cost of funds-based lending rates (MCLR) for two specific tenures, effective October 7, 2024. The adjustment sees an increase of up to 5 basis points (bps), resulting in MCLR rates now ranging from 9.10 per cent to 9.45 per cent.

The bank has specifically raised rates by 5 bps for the six-month and three-year tenures, while keeping other lending rates unchanged. For short-term borrowing, the bank’s overnight rate is set at 9.10 per cent, and the one-month rate is 9.15 per cent. The three-month tenure will have a rate of 9.30 per cent. 

Following the adjustment, the six-month MCLR will rise from 9.40 per cent to 9.45 per cent, while the one-year MCLR remains at 9.45 per cent. The two-year MCLR also holds steady at 9.45 per cent, and the three-year rate has increased from 9.45 per cent to 9.50 per cent.

Understanding MCLR basics

The Marginal Cost of Funds-Based Lending Rate (MCLR) is the minimum interest rate that financial institutions must charge for specific loans, serving as the baseline for interest rates. This rate is fixed for borrowers unless otherwise directed by the Reserve Bank of India.

HDFC Bank 's lending rates are benchmarked to the current Policy Repo Rate of 6.50 per cent. For special home loan rates, which apply to both salaried and self-employed individuals, the interest rates range from 8.75 per cent to 9.65 per cent, calculated as Repo Rate plus 2.25 per cent to 3.15 per cent. 

Standard home loan rates for the same borrower categories are set between 9.40 per cent and 9.95 per cent, based on Repo Rate plus 2.90 per cent to 3.45 per cent. 

Additionally, the bank's benchmark Prime Lending Rate stands at 17.95 per cent per annum, effective from September 9, 2024, while the revised Base Rate will also be effective from the same date at 9.45 per cent.

According to HDFC Bank ’s website, the above Home Loan interest rates and EMI are applicable for loans under the Adjustable Rate Home Loan Scheme (Floating Interest Rate) and are subject to change at the time of disbursement. These rates are linked to HDFC Bank's Repo Rate and may vary throughout the loan's tenor. All loans are subject to the bank's sole discretion.