HDFC Bank has announced a significant move for its retail and corporate borrowers. The private sector lender recently implemented an HDFC MCLR cut to lower borrowing costs across several tenures. This decision directly impacts millions of customers who hold floating-rate loans.
Consequently, many borrowers will see a reduction in their monthly outgoings once their loan reset dates arrive. This HDFC MCLR cut reflects the bank’s strategy to align with current market liquidity and interest rate trends.
HDFC’s Recent MCLR Cut Overview
HDFC Bank revised its Marginal Cost of Funds-based Lending Rate (MCLR) for select tenures. Specifically, the bank reduced the rates by 5 basis points (bps) for the overnight, one-month, and three-month buckets. Furthermore, the crucial one-year MCLR also saw a reduction.
| Feature | Details of the HDFC Bank Update |
|---|---|
| Primary Action | HDFC Bank reduced its lending rates by up to 5 basis points. |
| Effective Date | The new rates came into effect on 7 January 2026. |
| Key Beneficiaries | Borrowers with home, car, and personal loans linked to MCLR. |
| Impact | Potential reduction in Equated Monthly Instalments (EMIs). |
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This specific tenure is vital because most retail loans, including home loans, use it as a benchmark. Therefore, the HDFC’s most recent MCLR cut will eventually lower the interest burden for a vast majority of retail customers.
| The bank maintained the rates for the six-month, two-year, and three-year tenures. Resultantly, borrowers on these specific plans will not see an immediate change in their interest calculations. However, the overall downward trend suggests a more favourable environment for new credit seekers. |
This HDFC’s 2026 update on MCLR ensures that the bank remains competitive in the Indian lending space.
Impact of HDFC’s MCLR Cut on EMIs
A reduction of 5 basis points might seem small to the average person. Nevertheless, for large loan amounts like home loans, even a minor cut on MCLR can lead to substantial savings over time.
For instance, a borrower with a ₹50 Lakh Loan online" href="https://www.buddyloan.com/50-lakh-personal-loan">₹50 lakh loan could save thousands in interest over a 20-year period. Consequently, this move provides much-needed relief to households managing tight budgets.
| Borrowers must note that HDFC’s latest MCLR cut does not apply instantly to existing loans. |
Most MCLR-linked loans come with a reset clause, typically every six or twelve months. Therefore, your EMI will only decrease on the next reset date specified in your loan agreement. Additionally, the bank’s decision to lower rates might prompt other private and public sector banks to follow suit.
| Loan Tenure | Rate in December 2025 | New Rate (January 2026) | Change |
|---|---|---|---|
| Overnight | 8.30% | 8.25% | -5 bps |
| 1 Month | 8.30% | 8.25% | -5 bps |
| 3 Months | 8.35% | 8.30% | -5 bps |
| 6 Months | 8.40% | 8.40% | No Change |
| 1 Year | 8.45% | 8.40% | -5 bps |
| 2 Years | 8.50% | 8.50% | No Change |
| 3 Years | 8.55% | 8.55% | No Change |
Please keep in mind that this cut only affects MCLR-linked loans and not those linked to the Repo Rate (EBLR).
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Understanding HDFC’s MCLR cut Mechanism
The Reserve Bank of India (RBI) introduced the MCLR system in 2016 to improve transparency. It represents the minimum interest rate a bank can charge for a specific loan tenure. Banks calculate this rate based on the marginal cost of funds, operating expenses, and the cost of maintaining the Cash Reserve Ratio (CRR).
As a result, an “MCLR cut” usually happens when the bank’s cost of acquiring new deposits decreases.
Moreover, the MCLR system ensures that policy rate changes by the RBI reach the end consumer faster. While newer loans are often linked to the External Benchmark Lending Rate (EBLR), many older customers still remain on the MCLR regime. Therefore, this HDFC MCLR cut specifically targets those who have not yet transitioned to newer benchmarking systems.
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HDFC Bank Loan Schemes and Current Rates
HDFC Bank offers a variety of credit products that rely on these benchmark rates. Home loans, which often carry a one-year tenure, are the most common products affected by the latest MCLR cut. Similarly, personal loans and car loans linked to the three-month or six-month tenures will also see adjustments — if they are linked to MCLR and not EBLR or RLLR.
Resultantly, the HDFC’s interest rate of loans linked to MCLR in 2026 appears more borrower-friendly than the previous year:
| Loan Category | Interest Rate (Base MCLR) | Benchmark Tenure Details |
| HDFC Home Loans | 8.40% | 1-year MCLR plus a specific spread (margin). |
| HDFC Personal Loans | 8.30% – 8.40% | or 6 months |
| HDFC Car Loans | 8.40% – 8.50% | 1-year or 2-year benchmark. |
| HDFC Corporate Loans | 8.25% | overnight or 1-month rates for working capital needs. |
The bank also maintains a Base Rate for very old loans. Currently, the HDFC Bank Base Rate stands at 8.90%. However, most modern borrowers should focus on the HDFC cuts to MCLR news to track their potential savings.
Also Read: HDFC Corporate Net Banking
Comparing HDFC Interest Rate Changes in 2026
When we analyse the HDFC interest rate 2026 trends, we see a clear focus on shorter tenures. The bank aims to provide liquidity to the market while managing its own margins.
Therefore, the HDFC MCLR cut acts as a balancing act between depositor interests and borrower affordability. Consequently, the bank continues to lead the private banking sector in terms of loan book growth.
| Loan Type | Applicable Benchmark | Current Interest Range |
|---|---|---|
| Housing Loan | 1-Year MCLR | 8.40% – 9.50% |
| Vehicle Loan | 1-Year MCLR | 8.75% – 10.50% |
| Personal Loan | 3-Month/6-Month MCLR | 10.50% – 15.00% |
| Education Loan | 1-Year MCLR | 9.00% – 11.00% |
Tip: Use an EMI calculator to check your repayment schemes so that you can plan accordingly.
Conclusion
The recent HDFC MCLR cut marks a positive shift for the Indian banking consumer. By trimming rates by 5 basis points, HDFC Bank has signalled its intent to support credit growth.
Borrowers should check their loan documents to identify their specific reset dates. This HDFC MCLR cut will eventually translate into lower monthly payments for millions of families across India.
Furthermore, staying informed about the HDFC MCLR updates helps you manage your personal finances better. If your loan is still on the old Base Rate system, you might consider switching to the MCLR or EBLR regime.
Therefore, consult with your bank manager to see how this HDFC MCLR cut can benefit your specific financial situation.
Using smart tools for comparing the EMI, interest rate, and other details related to your loan is one of the crucial steps in 2026. Try using a loan aggregator like Buddy Loan, where you can compare the best loan options suited to your profile.
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