HDFC Bank gave good news to crores of customers! Home loan made cheaper before Navratri

By Siddhi Jain | Sep 8, 2025, 19:29 IST

HDFC Bank Cuts MCLR Ahead of Navratri: Home, Car, and Personal Loans to Get Cheaper

Mumbai, September 8, 2025 – India’s largest private sector lender, HDFC Bank, has announced a small but significant cut in lending rates, bringing festive relief to millions of borrowers. Just ahead of the Navratri season, the bank has reduced its Marginal Cost of Funds Based Lending Rate (MCLR) by 0.05% across select tenures.

The change means lower EMIs on home, car, and personal loans, offering a direct benefit to retail customers at a time when borrowing demand typically rises.

What Has Changed in HDFC Bank’s MCLR?

According to the bank’s official update, the following changes have been implemented with effect from September 8, 2025:

Overnight MCLR: Unchanged at 8.55%
1-month MCLR: Unchanged at 8.55%
3-month MCLR: Unchanged at 8.60%
6-month MCLR: Reduced from 8.70% to 8.65%
1-year MCLR: Reduced from 8.70% to 8.65%
2-year MCLR: Reduced from 8.75% to 8.70%
3-year MCLR: Unchanged at 8.75%

The most widely used one-year MCLR, which serves as the benchmark for most floating-rate home loans, has dropped by 5 basis points.

What Does This Mean for Borrowers?

MCLR directly influences the interest rate on floating loans such as home loans, personal loans, and vehicle loans. With the new revision, customers can expect:

Lower EMIs on existing floating-rate loans linked to MCLR.
Reduced interest burden over the tenure of long-term loans.
Potentially higher affordability for new borrowers looking to avail home or auto loans during the festive season.

For example, on a ₹50 lakh home loan with a 20-year tenure, even a 0.05% reduction can result in savings of several thousand rupees over the loan’s lifetime.

Why Did HDFC Bank Cut Rates?

MCLR is calculated based on multiple factors, including:

Deposit interest rates offered by the bank
RBI’s repo rate and monetary policy stance
Operational costs of lending
Cash Reserve Ratio (CRR) requirements

Any change in these factors impacts MCLR. The latest cut comes at a time when the Reserve Bank of India has maintained a stable policy rate environment, and banks are looking to stimulate credit growth ahead of the festive season.

How Does MCLR Impact EMIs?

Whenever banks reduce MCLR, it brings relief to borrowers whose loans are tied to floating interest rates. On the other hand, an increase in MCLR raises EMIs or extends the repayment period.

Since MCLR revisions are directly linked to a borrower’s loan agreement reset date, the impact of this cut will be visible when the loan’s next interest rate reset cycle occurs.

Festive Boost for Borrowers

With Navratri and Diwali around the corner, the timing of this rate cut could encourage more homebuyers and car buyers to take loans. Industry experts believe that even a marginal cut enhances customer sentiment and keeps loan demand buoyant during the festive period.

Key Takeaways

HDFC Bank cuts MCLR by 0.05% on select tenures, effective September 8, 2025.
Home, car, and personal loan EMIs to become cheaper for millions of customers.
One-year MCLR, the benchmark for most loans, now stands at 8.65%.
Festive season borrowers likely to benefit the most from the revised rates.
Cut reflects bank’s effort to stimulate credit growth while keeping borrowing affordable.

Conclusion: HDFC Bank’s decision to lower MCLR ahead of Navratri is a welcome move for existing and new borrowers alike. While the reduction may appear modest, it signals relief in a high-interest environment and could drive strong demand for home and auto loans during the upcoming festive season.