HDFC Bank Hikes Lending Rates: EMIs to Rise as Home, Personal, and Auto Loans Get Costlier

HDFC Bank has increased its Marginal Cost of Funds Based Lending Rate (MCLR) by up to 10 basis points across various loan tenures. The revised rates came into effect on April 7 and are expected to impact both new borrowers and those with existing floating-rate loans.

Here are the updated MCLR rates:

• Overnight – 9.10%
• 1 month – 9.10%
• 3 months – 9.20%
• 6 months – 9.30%
• 1 year – 9.30%
• 2 years – 9.30%

Prior to this revision, the bank’s MCLR ranged between 9.10% and 9.35%. With the latest hike, the effective rate band is now between 9.20% and 9.45%.

According to banking analysts, the increase reflects a rise in the cost of funds for lenders, driven by factors such as inflationary trends, a possible hike in the Reserve Bank of India’s repo rate, and efforts to attract more deposits through competitive interest rates.

For borrowers, this development means that EMIs on floating-rate loans may increase at the time of their next reset cycle. New borrowers taking loans from HDFC will also face slightly higher interest outgo, affecting overall affordability and eligibility.

Experts suggest that borrowers evaluate their current loan agreements, consider transferring loans if better rates are available elsewhere, or explore switching to repo-linked lending rate (RLLR) options, which offer greater transparency and quicker alignment with market rates.

HDFC’s move may set the tone for other leading banks to follow suit, marking the beginning of a gradual upward trend in lending rates across the sector. Borrowers are advised to stay informed and make necessary adjustments to their financial plans.