Synopsis: HDFC Bank has revised its MCLR lending rates, increasing them by 5 bps for six-month and three-year tenures. Effective from October 7, 2024, the revised rates now range between 9.10% and 9.45%. The bank’s lending rates are closely tied to the Policy Repo Rate of 6.50%, and the revisions are crucial for borrowers with MCLR-linked loans, including home and consumer loans.
HDFC Bank has announced a revision in its Marginal Cost of Funds-Based Lending Rate (MCLR) on two tenures, increasing the rates by up to 5 basis points (bps).
Effective from October 7, 2024, the bank’s MCLR interest rates will now range from 9.10% to 9.45%, affecting various lending products.
MCLR Revision Breakdown:
The Marginal Cost of the Fund-Based Lending Rate (MCLR) represents the minimum interest rate that financial institutions must charge on loans.
Following the recent revision, HDFC Bank increased lending rates by 5 bps for the six-month and three-year tenures.
The MCLR for six months is now 9.45%, up from 9.40%, while the three-year tenure has increased from 9.45% to 9.50%.
These adjustments will be particularly important for borrowers tied to these timeframes.
For other tenures, the MCLR remains unchanged.
The overnight rate is at 9.10%, one-month MCLR stands at 9.15%, and the three-month tenure offers 9.30%.
The two-year MCLR remains steady at 9.45%.
Impact on Loans Linked to MCLR:
HDFC Bank’s MCLR adjustments directly impact various loan products, especially those linked to the one-year MCLR, such as consumer loans, home loans, and vehicle loans.
The one-year MCLR remains unchanged at 9.45%, providing some stability for borrowers tied to this tenure.
These revised rates are part of broader market movements and are benchmarked against the Reserve Bank of India's (RBI) Policy Repo Rate, which currently stands at 6.50%.
As such, all HDFC lending rates, including home loan rates for salaried and self-employed individuals, are tied to the policy repo rate.
Current Home Loan Interest Rates:
For borrowers seeking home loans, HDFC Bank offers different rate structures.
Special home loan rates for salaried and self-employed individuals are calculated as the Policy Repo Rate plus a margin of 2.25% to 3.15%, translating to interest rates ranging between 8.75% and 9.65%.
Standard home loan rates, meanwhile, range between 9.40% and 9.95%, depending on the borrower profile.
Additionally, HDFC Bank’s Prime Lending Rate (PLR) is set at 17.95% per annum, effective from September 9, 2024, while the revised Base Rate now stands at 9.45%.
Understanding MCLR:
MCLR is a crucial rate that dictates the minimum interest that a bank can charge its borrowers.
Introduced by the RBI, MCLR ensures transparency in the way lending rates are determined.
Borrowers should note that these rates are subject to change based on fluctuations in the repo rate or other monetary policy adjustments.
In conclusion, the recent revision of HDFC Bank’s MCLR lending rates will influence borrowers with six-month and three-year loan tenures, reflecting the ongoing trends in interest rates.
While the increase is modest at 5 bps, it underscores the importance of closely monitoring market changes, especially for borrowers with MCLR-linked loans.
As interest rates evolve, staying informed about these changes can help borrowers make informed financial decisions.
Disclaimer: This article is for informational purposes only and should not be considered as financial or investment advice. Borrowers and investors are encouraged to consult with financial experts or advisors before making decisions based on interest rate changes.
