HDFC Bank cuts rates; home loans, auto loans set to become cheaper

Following the Reserve Bank of India's (RBI) rate cut move, HDFC Bank has slashed its Marginal Cost of Lending Rate (MCLR) with effect from April 8. The move will make the home loan, auto loan and personal loan from the bank cheaper. Not only the new loans but also the existing loans will become cheaper. Thus, the EMIs will go down too.

The HDFC Bank has reduced the MCLR to 8.65 per from 8.75 per cent, marking a cut of 0.10 per cent for a loan of up to 1 year. HDFC Bank has also reduced the MCLR for loans up to a period of six months, three months and one month to 8.45 per cent, 8.35 per cent and 8.30 per cent respectively. 

On April 4, the RBI in its first bi-monthly policy meet of current FY, had cut repo rate by 0.25 bps to 6 per cent. The current reverse repo rate stands at 5.75 per cent. The reuction in MCLR rate by the HDFC Bank will put pressure on other leading banks to match the same in order to keep their lending rate lucrative as well as competitive at the same time.

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Last week, the ICICI Bank had slashed its MCLR by 0.05% for all loans on April  2. The new rates for overnight and one-month tenors stand at 8.5 per cent, for three months at 8.55 per cent, for six months at 8.7 per cent and for one-year at 8.75 per cent.