A "low interest" loan shouldn't mean you have very little interest in paying it back!

    HDFC is one the leading banks in the country that offers great financial products and services.Like the other banks in India, HDFC has also revised its MCLR (marginal cost of fund-based lending rate) which makes home loans cheaper for the customers.

    Current HDFC MCLR Rates

    Effective Date: 7 Sept 2022

    Tenure HDFC MCLR Rates
    3 years 8.40%
    2 years 8.30%
    1 year 8.20%
    6 months 8.05%
    3 months 7.95%
    1 month 7.90%
    Overnight 7.90%

    Steps to Switching from Base Rate to MCLR Rate:

    • Step-1: Give a written request to your bank so that they link your HDFC Home Loan that you borrowed to MCLR or marginal cost of funds based lending rate.

    • Step-2: After the MCLR is linked to your loan, send a request to your bank asking them to bring down the quantum of spread. The processing fee will be required to carry out this step, after which your home loan interest rate will be revised as per the marginal cost of funds based lending rate.

    What Should Existing Borrowers Do?

    The benefit of marginal cost of funds-based lending rate will not reflect immediately on the current regime. Most home loan contracts associated with MCLR reset only after twelve months. The existing borrowers will have to wait till the time the interest rate is reset. In case of an existing borrower, the marginal cost of funds-based lending rate cuts in the last six- or twelve-months matter as it will be determining the new rate on the date of reset.

    HDFC Home Loan Rate and MCLR Base Rate:

    • All the floating rates sanctioned by HDFC to the marginal cost of funds-based lending rate for a specific tenure.
    • Loans with shorter durations (overnight loans, cash credit, etc.) are linked to shorter duration marginal cost of funds-based lending rate whereas loans with longer durations (vehicle loans, loan against property, etc.) are linked to longer duration marginal cost of funds-based lending rate.
    • Applicable interest rate on floating rate home loans will have two parts – the margin on spread above benchmark and the applicable benchmark rate.
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