If you have a loan with HDFC Bank, there is some good news.
The bank has reduced its Marginal Cost of Funds-Based Lending Rate (MCLR) for September 2026.
The new rates will come into effect from September 7, 2026.
The cut is between 5 and 10 basis points, which could eventually bring some relief to eligible borrowers.
But how much can your EMI actually fall? And will every HDFC Bank loan become cheaper?
HDFC Bank’s New MCLR Rates
HDFC Bank has reduced its MCLR across different loan tenures.
The new rates now range between 7.90% and 8.60%, compared with the earlier range of 8% to 8.65%.
Here are the revised rates:
| Loan Tenure | Old MCLR | New MCLR |
|---|---|---|
| Overnight | 8.00% | 7.90% |
| 1 Month | 8.00% | 7.90% |
| 3 Months | 8.15% | 8.05% |
| 6 Months | 8.30% | 8.25% |
| 1 Year | 8.40% | 8.35% |
| 2 Years | 8.55% | 8.45% |
| 3 Years | 8.65% | 8.60% |
The biggest reduction has come in the 2-year MCLR, which has been cut by 10 basis points.
The 1-year MCLR, which is an important benchmark for many loans, has also been reduced by 5 basis points.
What Is MCLR and Why Does It Matter?
MCLR is essentially the minimum lending rate linked to a bank’s cost of funds.
The system was introduced by the RBI in 2016.
When the MCLR falls, interest rates on loans linked to it can also fall.
However, your actual loan rate is not determined by MCLR alone.
Factors such as the loan type, bank’s spread and your credit profile can also affect the final interest rate.
Will Your EMI Reduce Immediately?
This is where borrowers need to be careful.
A lower MCLR does not necessarily mean your EMI will fall immediately.
MCLR-linked loans generally have a reset date. Depending on the loan, the interest rate may be reset after six months, one year or another specified period.
When your next reset date arrives, the bank will calculate the applicable loan rate using the revised MCLR.
So, if your loan is linked to MCLR, you could see the benefit when your next reset takes effect.
Who Will Get the Benefit?
The MCLR reduction will mainly benefit borrowers whose loans are linked to MCLR.
If your loan is linked to another benchmark, such as an external benchmark, this particular MCLR cut may not directly reduce your interest rate.
For HDFC Bank customers, therefore, the key thing to check is which benchmark your loan is linked to and when its next reset date is.
A small rate cut may look insignificant, but over a large home loan and a long repayment period, even a modest reduction in the interest rate can make a difference to the total interest paid.