HDFC Bank Cuts Lending Rates on Select Tenures: Check Who Will Benefit
HDFC Bank reduces short-term MCLR rates by up to 5 bps while increasing the 3-year benchmark; home loan borrowers may see limited impact.
Quick Summary
HDFC Bank has revised its MCLR rates effective from 7 May 2026, reducing short-term lending rates by up to 5 basis points while increasing the 3-year benchmark. The revision may benefit borrowers with short-term and floating-rate loans through lower EMIs and reduced interest burden. However, most home loan borrowers may not see immediate relief as the 1-year MCLR remains unchanged at 8.35%.
HDFC Bank has revised its Marginal Cost of Funds-based Lending Rate (MCLR), bringing relief for some borrowers. The new rates came into effect from 7 May 2026.
The bank reduced lending rates by up to 5 basis points (bps) for short-term tenures, while increasing the 3-year MCLR by 5 bps. These changes will impact borrowers whose floating-rate loans are linked to MCLR benchmark.
*1 basis point (bps) = 0.01%
HDFC Bank Latest MCLR Rates
Following the latest revision, HDFC Bank’s MCLR rates now stand between 8.05% and 8.60%, depending on the loan tenure. Previously, bank’s MCLR structure ranged from 8.10% to 8.55%.
|
Tenure |
New Rate (7th May 2026) |
Old Rate (April 2026) |
Change |
|
Overnight |
8.05% |
8.10% |
↓ 5 bps |
|
1 Month |
8.05% |
8.10% |
↓ 5 bps |
|
3 Month |
8.15% |
8.20% |
↓ 5 bps |
|
6 Month |
8.30% |
8.35% |
↓ 5 bps |
|
1 Year |
8.35% |
8.35% |
No Change |
|
2 Year |
8.45% |
8.45% |
No Change |
|
3 Year |
8.60% |
8.55% |
↑ 5 bps |
Source: HDFC Bank
Which Borrowers Will Benefit?
The latest MCLR revision mainly benefits borrowers linked to short-term loan benchmarks.
Customers with the following loans may see some relief:
-
Short-term business loans
-
Working capital loans
-
Floating-rate personal loans
-
Certain retail and flexible home loans
As overnight, 1-month, 3-month, and 6-month MCLR rates have been reduced, these borrowers may benefit from lower EMIs, reduced interest burden, and slightly lower repayment cost over time
However, the benefit will only reflect after the loan reset date.
Impact on Home Loan Borrowers
Most retail home loans are generally linked to the 1-year MCLR benchmark.
As HDFC Bank has kept the 1-year MCLR unchanged at 8.35%, many home loan borrowers may not see any immediate EMI reduction.
Similarly, 2-year MCLR also remains unchanged at 8.45%.
Long-Term Borrowers May Pay More
HDFC Bank has increased the 3-year MCLR from 8.55% to 8.60%. This may impact borrowers whose loans are linked to the 3-year benchmark, including:
-
Some long-term home loans
-
Corporate loans
-
Large-value business borrowings
These borrowers could see slightly higher EMIs, higher interest outgo and longer repayment period after reset
What Is MCLR?
MCLR or Marginal Cost of Funds-based Lending Rate is the minimum interest rate below which banks cannot lend, unless permitted by the RBI.
The Reserve Bank of India introduced MCLR framework in 2016 to improve transparency in loan pricing.
Many floating-rate loans are linked to MCLR, including:
-
Home loans
-
Personal loans
-
Auto loans
-
Business loans
Whenever banks revise MCLR, the changes are passed on to borrowers during the reset cycle.
Conclusion
HDFC Bank’s latest MCLR revision is positive for short-term borrowers, as select lending rates have been reduced by 5 basis points.
However, borrowers linked to the 3-year MCLR benchmark may face a slight increase in borrowing costs.
For most home loan customers, the impact is expected to remain limited because the important 1-year MCLR benchmark remains unchanged at 8.35%.
Before expecting any EMI change, borrowers should check their loan benchmark tenure, loan reset date, and the terms mentioned in the loan agreement.