HDFC Bank has reduced its Marginal Cost of Funds-based Lending Rate (MCLR) by 5 basis points across most loan tenures, but the move may not immediately translate into cheaper loans for all borrowers. The revised rates came into effect on August 7, 2026, with the bank cutting rates for six of its seven listed tenures while keeping the two-year MCLR unchanged. Following the revision, HDFC Bank’s MCLR now ranges between 8% and 8.65%, depending on the reset period. While the reduction is modest, its impact will depend largely on the benchmark linked to an individual loan. Borrowers whose loans are directly linked to MCLR may see some benefit when their respective reset dates arrive. However, most new floating-rate retail loans, including many home and personal loans sanctioned after October 2019, are linked to an external benchmark under the Reserve Bank of India’s regulatory framework. Such loans are generally linked to benchmarks such as the RBI repo rate or specified Treasury bill rates, rather than MCLR. Therefore, the latest MCLR cut does not automatically mean lower EMIs for every HDFC Bank borrower. Existing customers should check their loan agreements and benchmark details to determine whether the rate reduction will affect their borrowing costs. The move nevertheless indicates a marginal easing in the bank’s lending rates and could benefit eligible MCLR-linked borrowers over time.
