HDFC Bank Reduces Lending Rates: New MCLR Rates for Feb 2026

HDFC Bank Trims MCLR by 5 Bps: How the Interest Rate Cut Affects Your Loan EMIs

HDFC Bank, India’s largest private sector lender, has officially reduced its Marginal Cost of Funds-based Lending Rate (MCLR) on select tenures, effective 7 February 2026. This strategic move follows the Reserve Bank of India’s (RBI) decision to hold the repo rate steady at 5.25%, following a significant 25-basis-point cut in December 2025.

By trimming rates now, HDFC Bank is passing on lower borrowing costs to customers, potentially lowering monthly EMIs for millions of retail and corporate borrowers across the country.

Understanding the HDFC Bank MCLR Adjustment

The HDFC bank reduced its three-year rate by 5 basis points, which has brought down the rate to 8.50% from 8.55%. Other rates like the overnight and one-year rates stayed the same. They range between 8.25% and 8.40%. This specific cut basically helps people with long-term financial plans. It is very useful for car loans and large business loans.

As noted by The Economic Times, "The Marginal Cost of the Fund-Based Lending Rate or MCLR is the minimum interest rate a financial institution needs to charge for a specific loan... This rate limit is set in stone for borrowers unless specified otherwise by the RBI".

By lowering this rate, HDFC Bank sets a new floor for interest costs. This move often forces other banks to lower their rates too, thereby keeping the market competitive for new borrowers.

Will My HDFC Bank MCLR EMI Drop Immediately?

Loans linked to the HDFC Bank MCLR do not change instantly; they only update on a specific ‘reset date.’ Most home and personal loans have a reset cycle every six months or every year. If your reset date just passed in January, you must wait for the next cycle. You will see the 5-basis-point savings then.

"The existing borrowers will have to wait till the time the interest rate is reset. In case of an existing borrower, the marginal cost of funds-based lending rate cuts in the last six- or twelve-months matter as it will be determining the new rate on the date of reset," explains BankBazaar.

A 0.05% cut might save a borrower about Rs. 150 to Rs. 250 a month on a Rs. 50 lakh loan. This seems small, but it adds up over 20 years. You could save tens of thousands of rupees in interest. Small businesses also benefit from these changes as lower rates help them manage their cash flow better and pay off debts more easily.