HDFC Bank MCLR Base Rate 2025
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
Tenure | HDFC MCLR Rates |
3 years | 8.75% |
2 years | 8.75% |
1 year | 8.70% |
6 months | 8.70% |
3 months | 8.60% |
1 month | 8.55% |
Overnight | 8.55% |
Should one Switch from Base Rate to MCLR Rate?
The Reserve Bank of India (RBI) has emphasized that banks must permit base rate borrowers to transition to MCLR when there is a shift in the policy rate. Nonetheless, it's advisable to seek professional advice before deciding. Financial advisors can furnish you with the latest insights and assist you in navigating the transfer process.
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.;''
FAQs on HDFC MCLR Rates
- What is the difference between base rate and MCLR rate in HDFC?
The base rate depends on the fund's average cost and the MCLR rate depends on the fund's marginal cost. Moreover, base rate can be changed by lenders every quarter and MCLR rate depends on the loan tenure.
- What are the elements of MCLR rate in HDFC?
The MCLR rate has four elements: Tenure premium, operating cost, marginal cost of funds, and negative carry-on account of CRR.
- What is the operating cost in HDFC?
Operating cost is basically the expense of raising the funds, except the costs recovered through service charges.
- Do all banks have different MCLR rates?
The MCLR rates are tenure-based. In other words, each bank sets its MCLR rates on the basis of how much time a borrower has left to pay back the loan. Simply put, for every rupee that a bank offers to its borrowers, an additional cost is incurred; this is what determines the interest rate.
- Did Reserve Bank of India introduce MCLR system?
Yes, the MCLR system was introduced by the Reserve Bank of India.
- What are the components of MCLR rate?
The MCLR is determined internally by the bank on the basis of four elements: marginal cost of funds, cash reserve ratio (CRR), tenure premium, and operating costs.
- In which year was the MCLR system introduced?
The MCLR system was introduced in 2016.
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