What’s the news?
HDFC Bank has hiked MCLR by up to 5 basis points (bps). According to the bank website, the overnight MCLR is now 8.65%. The MCLR for one month is 8.65% and the three-month and six-month MCLRS will be 8.70% and 8.80%. The one-year MCLR, which is connected to many consumer loans, will now be 8.95%, the two-year MCLR will be 9.05%, and the three-year MCLR will be 9.15%.
One of the largest private sector banks in India, HDFC Bank, is announcing a rise in its lending rates. The action will increase the customer’s loan’s equivalent monthly installment (EMI) payment.
With effect from April 6, 2021, the financial institution raised its marginal cost of funds-based lending rates (MCLR) by 0.10% across all tenors. The benchmark one-year MCLR, which serves as the starting point for most consumer loans, is currently 7.40%. For over two years now, HDFC Bank has not increased its lending rates.
All loan categories, including home loans, personal loans, business loans, and vehicle loans, will be impacted by the increase in the MCLR rate. The amount of the EMI for borrowers who took out loans with floating interest rates would change immediately. The rate increase will take effect for current customers as of the loan’s subsequent reset date.
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Due to the rising cost of money and the resulting economic instability brought on by the Covid-19 outbreak, the bank has decided to raise lending rates.
Due to the bank’s rising cost of funds, lending rates have increased. Interest rates in the money market have risen during the past few months. Due to the increased cost of borrowing for banks as a result, HDFC Bank had to raise its lending rates.
For existing borrowers, the Equated Monthly Installments (EMIS) would rise as a result of the increase in lending rates. Depending on the loan’s term, borrowers who have taken out loans from HDFC Bank may see a rise in their EMIs of about Rs. 60 per lakh.
However, it’s crucial to remember that current borrowers who chose a fixed interest rate would not be impacted by the increase in lending rates.
