HDFC Bank Slashes Interest Rates: How Much Will Your Home Loan EMI Drop?

It's festive season, and HDFC, India's largest private bank, has made a decision that could lower interest rates for its customers. Find out how much your rates might decrease. 

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HDFC Bumper Offer

It's festive season in India, and the central government and banks are showering customers with benefits. Auto companies offer discounts on cars, and the banking sector is also working to attract customers. During this festive season, HDFC, a major private bank, has made a decision for its customers. They've reduced 'Marginal Cost of Funds Based Lending (MCLR)' rates by five basis points for a selected period. Find out what this means.

Image Credit : HDFC Bank

What is MCLR?

This is the minimum interest rate at which a bank can lend, introduced by the RBI in 2016. Whenever a bank reduces its MCLR, it directly impacts the EMI for those who have taken loans from that bank, especially home loans. HDFC Bank home loans are linked to the MCLR report. Currently, these rates range from 7.90% to 13.20%, depending on the customer's profile (salary).

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Monthly EMI Decreases

Reducing the MCLR slightly lowers the EMI. For example, if you have a 50 lakh home loan for 20 years, reducing the MCLR will decrease your EMI by a certain amount for a specific period.

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Here are the new interest rates

According to HDFC Bank's official website, the new rates are as follows: No change from one to three months. But from six months to one year, the MCLR has been reduced to 8.65%, down from 8.70%. This 5 basis point reduction could save you between 250 and 350 rupees per month on your EMI payments for loans between 6 months and a year. For two years, the MCLR is 8.70%, also reduced by five basis points from 8.75%. This will also save you some EMI each month for two years.