Banking: Loans has become cheaper, Bank of Baroda and HDFC Bank have reduced the interest rate by this much..

Public sector Bank of Baroda (BOB) on Sunday said it has cut its key lending rate linked to the repo rate by 0.50 percent in line with the Reserve Bank of India's (RBI) cut in interest rates. Meanwhile, private sector HDFC Bank has cut its marginal cost of funds-based lending rate (MCLR) by 0.10 percent in different periods, benefiting borrowers whose loans are linked to this benchmark.

RBI recently reduced the repo rate

BOB said in a statement that in line with the RBI's cut in the policy repo rate, the bank has cut its repo-linked lending rate (RLLR) by 0.50 percent from June 7. The bank said that now its RLLR is 8.15 percent. With this, BOB has fully implemented the RBI's cut in RLLR. According to HDFC Bank's website, the new MCLR rates are effective from June 7.

Your loan has become so cheap.
With the cut, one-day and one-month rates have come down by 0.10 percent to 8.90 percent. The three-month rate has come down by 0.10 percent to 8.95 percent, while the six-month and one-year rate has come down by 0.10 percent to 9.05 percent.

The loan rate for two-year and three-year tenures has been reduced to 9.10 percent from 9.20 percent earlier. Earlier on Friday, the RBI cut interest rates by a more-than-expected 0.50 percent to boost the economy and unexpectedly cut the cash reserve ratio to provide more money to banks for lending.

RBI reduced the repo rate by this much
The Reserve Bank of India (RBI) has recently announced a cut of 50 basis points (bps) in the repo rate in its Monetary Policy Committee (MPC) meeting. Now the repo rate has come down from 6% to 5.5%. This is the third interest rate cut, which started in February 2025. This move is expected to reduce the interest rates of home loans, car loans, and other loans. According to the latest report of the State Bank of India (SBI), this cut can reduce the External Benchmark Lending Rates (EBLR) and Marginal Cost of Funds Lending Rate (MCLR) of banks by up to 30 basis points.

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