HDFC Bank has announced a major relief for its customers. The bank has reduced loan interest rates by deducting 30 basis points in its marginal cost of funds based lending rate (MCLR), which will benefit all the customers whose loans are connected to this benchmark. This change has come into force from 7 July 2025 and this has reduced interest rates on different periods. Earlier the bank's MCLR was between 8.90% to 9.10%, which has now come down between 8.60% to 8.80%.

The effect of this deduction will be seen on loans of overnite, one month, three months, six months, one year, two years and three years. With this step, customers will have to pay less interest, which will reduce their monthly installments (EMI) and the financial burden will be lighter.

Interest rates on home loan

Talking about the home loan, the interest rates of HDFC Bank's home loan are connected to the repo rate and can change during the entire period of the loan. At present, by 7 July 2025, the interest rates of the general home loan are between 8.50% to 9.40%, while the special rates are between 7.90% to 9.00%. These rates have been fixed on the basis of the current repo rate of 5.50%. This deduction will provide special benefits to those customers who are planning to take a new home loan or whose current loan interest rates are related to the repo rate.

What is mclr

MCLR (Marginal Cost of Funds Based Lending Rate) is a benchmark interest rate set by the Reserve Bank of India (RBI), on the basis of which banks fix their loan interest rates. This is the minimum rate on which banks can give loans. The MCLR calculation is based on factors such as the bank borrowing cost, interest rate on deposits, operational costs and negative effects on CRR.