Your EMIs on loans from HDFC Bank may go up
What's the story
HDFC Bank has announced an increase in the marginal cost of funds-based lending rate (MCLR) for a three-month tenure by five basis points.
This change, effective from today, will see MCLR-based lending rates ranging between 9.10% and 9.45% per annum.
However, the rates for all other tenures remain unchanged at this time.
Rate details
A look at the revised MCLR rates
The revised MCLR rates are as follows: The overnight rate stands at 9.10%, while the one-month rate is slightly higher at 9.15% per annum.
The three-month MCLR has seen an increase from 9.25% to now stand at 9.30%.
For a six-month period, the MCLR is set at 9.40%.
Long tenures carry an MCLR of 9.45%, according to information available on HDFC Bank's website.
Implications
Impact of MCLR on loan EMIs
MCLR is a crucial factor that banks use to determine their interest rates for various loans such as home, business, and personal.
When MCLR rates are increased, it results in a rise in loan equated monthly installments (EMIs).
Therefore, any changes in these rates can lead to adjustments in the interest rates and subsequently affect loan EMIs.
Base rate
Current base rate remains unchanged
It's important to note that HDFC Bank's current base rate is 9.40%, which has been in effect since June 18 this year, as per the bank's official website.
The base rate system was replaced by the MCLR-based lending rates in 2016 by the Reserve Bank of India (RBI).
However, loans taken before 2016 are still governed by either the base rate or benchmark prime lending rates (BPLR).