HDFC Bank, the country’s largest private bank, has brought good news for its customers. The bank has reduced interest rates on business loans and home loans, making borrowing slightly cheaper.
The bank has cut its Marginal Cost of Funds Based Lending Rate (MCLR) by 0.05% (5 basis points). The new rates have come into effect from April 7, 2026.
After this change, MCLR now ranges from 8.10% to 8.55%, compared to the earlier 8.15% to 8.55%.
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What is MCLR and Why It Matters
MCLR is the minimum interest rate below which banks usually cannot give loans. It was introduced by the Reserve Bank of India in 2016.
This rate depends on several factors like the bank’s cost of funds, operating expenses, and market conditions. Different loan durations have different MCLR rates.
Latest Changes at a Glance:
Overnight & 1-month: Reduced to 8.10% (down by 0.05%)
3-month: Reduced to 8.20% (down by 0.05%)
6-month, 1-year, 2-year, 3-year: No change
Who Will Benefit the Most
The biggest benefit will go to borrowers with short-term loans.
This includes:
Businesses taking working capital loans
Customers with loans linked to short-term MCLR
These borrowers may see a small drop in their EMI or overall interest cost. However, the benefit will only reflect after the next loan reset date.
Limited Relief for Home Loan Customers
For most regular customers, the impact will be minimal for now.
This is because most home and personal loans are linked to the 1-year MCLR, which has not changed. So, EMI amounts for these borrowers are likely to stay the same in the short term.
All Eyes on RBI’s Next Move
This rate cut comes just before an important announcement by the Monetary Policy Committee of the RBI.
The committee is scheduled to announce its decision on April 8, 2026, and it will decide whether the repo rate will change.
Interest rates are influenced by factors like inflation, crude oil prices, and global market trends. Even though this cut is small, it signals that more rate changes could happen in the coming months.