Private sector lender HDFC Bank has increased its marginal cost of funds-based lending rate (MCLR) on loans across all tenures by up to 10 basis points (100 basis points = 1%). The new loan rates will be effective from August 8, 2022.
As a result, borrowers will witness an increase in the equivalent monthly instalments (EMI) for various loan types, which will increase the cost of housing, vehicles, personal, and other loans, once the reset date of the loan arrives.
According to the
website, the overnight MCLR is now 7.80 percent, up from 7.70 percent a hike of 10 bps. The MCLR for one month is 7.80percent. The three-month and six-month MCLRs will be 7.85 percent and 7.95 percent, respectively. The one-year MCLR, which is connected to many consumer loans, will now be 8.10 percent, the two-year MCLR will be 8.20percent, and the three-year MCLR will be 8.30 percent.
Last month, HDFC Bank had raised MCLR by 20 basis points (w.e.f July 7, 2022) and 35 basis points (w.e.f June 7, 2022).
On the reset date, the bank will raise the interest rate on your mortgage in accordance with the current MCLR. Your interest rate will therefore rise in August if the reset date of your loan is in August, and it is tied to the MCLR rate.
RBI hikes repo rate
In its policy review on Friday, the Reserve Bank of India increased the repo rate, the primary policy rate, by 50 basis points.
In May, the RBI increased the repo rate by 40 basis points. The RBI also increased the repo rate by 50 basis points each time it reviewed the monetary policy in June and August. Due to rising inflation, the central bank has been raising rates aggressively. Around the previous six months, retail inflation has remained persistently high at over 6%.