HDFC Bank changes MCLR rates for overnight, 1-year and 3-year tenures

HDFC Bank has revised its Marginal Cost of Funds-based Lending Rate (MCLR) today (July 7, 2026). According to a notification on the bank's website, the revised rates are effective from July 7. The lender had last revised its MCLR a month ago, on June 8.

The bank has revised rates for select tenures, with the overnight MCLR cut to 8.05% from 8.10%. The 1-year and 3-year MCLR have been increased by 0.05% or 5 basis points (bps), to 8.45% and 8.70%, respectively. One basis point is one-hundredth of a percentage point.

The 1-year MCLR rate is crucial as it serves as the primary benchmark for determining interest rate on most retail loans, including home loans, auto loans, and certain personal loans.

MCLR rate is the internal benchmark used by banks for pegging most floating-rate loans. In simple terms, it is the minimum rate of interest which banks need to charge borrowers for the different retail and commercial loans.

Even though the MCLR rate has been replaced by the new external benchmark lending rate (EBLR) regime in 2019, still long-tenure loans sanctioned before October 2019 are linked to MCLR.

So, consequently, old borrowers with loans linked to MCLR will see their interest or tenure trend higher at the next reset date. Importantly, banks add a spread to this MCLR rate to arrive at the final interest rate for borrowers.