Business Bureau: HDFC Bank, India’s largest private sector lender, has increased its Marginal Cost of Funds based Lending Rate (MCLR), a key benchmark that influences retail loan interest rates.
The revised rates came into effect from Monday, according to an official announcement by the bank.
Home, Auto and Personal Loans Likely to Get Costlier
The bank has increased the one-year MCLR from 8.35% to 8.40%, which directly impacts home loans, auto loans and personal loans linked to this benchmark.
For two-year tenure loans, the MCLR has been raised more sharply from 8.45% to 8.55%, indicating a higher interest burden for borrowers in this segment.
EMI Burden May Increase for Customers
With the revision in lending rates, existing and new borrowers may see either an increase in their monthly EMIs or an extension in loan tenure, depending on the loan structure.
Other short-term and long-term tenures, including overnight, three-month, six-month and three-year MCLR categories, have also seen marginal increases.
RBI Rates Unchanged, Bank Adjusts Lending Costs
Interestingly, the Reserve Bank of India has kept its benchmark repo rate unchanged at 5.25%, but HDFC Bank has still proceeded with the hike in lending rates.
Banking analysts suggest that rising cost of funds and liquidity pressures have forced lenders to adjust their lending rates upward despite stable policy rates.
The revision is expected to impact retail loan borrowers across segments, particularly those with floating-rate loans linked to MCLR.
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