HDFC Bank hikes MCLR rates 15 bps across tenures: Check impact on your loan | Personal Finance
HDFC Bank has increased its lending rates by up to 15 basis points (bps) across all tenures, potentially raising borrowing costs for customers whose loans are linked to the Marginal Cost of Funds-based Lending Rate (MCLR). The revised rates came into effect on November 7.
Following the revision, the bank’s MCLR rates range from 7.85 per cent to 8.70 per cent, compared with 7.75 per cent to 8.55 per cent earlier.
The revised rates are:
Overnight: Increased by 5 bps to 7.85 per cent from 7.80 per cent.
One month: Increased by 10 bps to 7.85 per cent from 7.75 per cent.
Three months: Increased by 10 bps to 8.05 per cent from 7.95 per cent.
Six months: Increased by 15 bps to 8.30 per cent from 8.15 per cent.
One year: Increased by 15 bps to 8.45 per cent from 8.30 per cent.
Two years: Increased by 15 bps to 8.55 per cent from 8.40 per cent.
Three years: Increased by 15 bps to 8.70 per cent from 8.55 per cent.
One basis point is one-hundredth of a percentage point.
Which borrowers will be affected?
The increase will affect HDFC Bank customers whose existing loans are linked to MCLR. These may include home loan, personal loan and other borrowers, depending on their loan agreements.
However, the revision will not necessarily increase everyone’s EMI immediately. The actual impact depends on the interest rate reset date specified in the loan agreement.
Borrowers should check their loan statements and repayment schedules to find out when the revised rate will apply.
What is MCLR?
MCLR is the minimum interest rate below which a bank generally cannot lend, except in certain cases permitted by the Reserve Bank of India (RBI).
It is calculated using factors such as the bank’s cost of funds, operating expenses and the cost of maintaining cash reserves.
For borrowers, an increase in MCLR can raise the interest cost when their loan rate is reset. Depending on the loan terms, banks may increase the EMI or extend the repayment period.
