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HDFC Bank hikes lending rates across tenures from today. Loan EMIs to go up

HDFC Bank has increased its Marginal Cost of Funds Based Lending Rate (MCLR) for all borrowers’ maturities by 10 basis points (bps) effective today, September 7, 2022. One basis point is one hundredth of a percentage point.

An increase in the MCLR interest rate implies an increase in the interest rate on loans for new and existing borrowers, including assimilated monthly installments (EMIs) for home loans, car loans and any other loan associated with marginal costs.

Under revised rates in effect today, HDFC Bank’s one-year MCLR is up to 8.2 percent, while its overnight MCLR is up to 7.9 percent, according to information on the bank’s website. The one-year MCLR is considered important from a retail lending perspective, as a bank’s long-term loans, such as home loans, are tied to this rate.

For the terms of one month, three months and six months, the MCLR will be 7.90%, 7.95% and 8.05% respectively.

Last month, HDFC Bank had increased the marginal cost of fund-based lending rates by 5-10 basis points over various maturities.

MCLR came in April 2016, giving the banks a formula to calculate their borrowing costs and then conduct monthly assessments of their offerings over various maturities. Each bank calculates its MCLR by taking into account, among other things, the incremental costs of raising funds (eg through deposits) and operating costs.

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