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Procuring Loans From HDFC Bank Gets Expensive as Bank Hikes Interest Rates

Last Updated: November 08, 2022, 17:52 IST

Your EMI will increase with the increase in MCLR with personal loans, auto and home loans all becoming more expensive.

According to the bank, the higher interest rates become effective on November 7.

The interest rates on loans have gone up at HDFC Bank, the second-largest private sector bank in the nation. As a result, taking out loans is now more expensive for customers. According to the bank, the higher interest rates become effective on November 7. Customers who have previously taken out loans will thereafter be required to make additional EMI payments. All sorts of loans now have higher interest rates as a result of the bank raising the margin cost lending rate.

According to the HDFC Bank website, the MCLR on loans with one-night tenor has been increased from 7.90 per cent to 8.20 per cent. Similarly, the MCLR has been increased to 8.25 percent on loans of one-month tenor and the interest rate on loans of 3 to 6 months has been increased from 8.30 to 8.40 percent.

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HDFC Bank has increased the MCLR rate to 8.55 percent on one-year tenor loans at an 8.75 percent rate on 3-year tenure, whereas, the rates have been increased from 8.30 per cent to 8.65 per cent on loans with a tenure of 2 years. Your EMI will increase with the increase in MCLR with personal loans, auto and home loans all becoming more expensive.

MCLR is a method developed by the Reserve Bank of India (RBI) on the basis of which banks determine the interest rate for the loan. Before that, all banks used to fix the interest rate for customers on the basis of the base rate.

According to the ICICI Bank website, “The RBI replaced the base rate system for determining interest rates with the MCLR system on Apr 01, 2016. While borrowers who were issued loans before Apr 01, 2016, are still under the old base rate and benchmark prime lending rate (BPLR) system, they can opt to move to the MCLR rate if they think it’s beneficial.”

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