The recent HDFC Bank MCLR reduction may look small on paper, but for long-tenure loans like home loans, even a 5 basis point cut can lead to meaningful savings over time. Borrowers whose loans are linked to MCLR will see the benefit from their next reset date.
This move strengthens the narrative of lower EMIs ahead, especially for borrowers with large outstanding balances and longer remaining tenures.
Comparison of HDFC Bank MCLRs: December 2025 vs January 2026
The table below shows how HDFC Bank lending rates have changed across different tenures following the latest MCLR reduction in January 2026.
| Tenure | MCLR (December 2025) | New MCLR – January 7, 2026 |
|---|---|---|
| Overnight | 8.30% | 8.25% |
| One Month | 8.30% | 8.25% |
| Three Months | 8.35% | 8.30% |
| Six Months | 8.40% | 8.40% |
| 1 Year | 8.45% | 8.40% |
| 2 Years | 8.50% | 8.50% |
| 3 Years | 8.55% | 8.55% |
This table clearly shows that the reduction is focused on short-term and one-year tenures, which directly impacts most retail loans such as home loans and certain business loans linked to the one-year MCLR.
Who Benefits the Most From This MCLR Reduction?
Not all borrowers will see immediate EMI relief. The impact depends on how your loan is structured.
Borrowers who benefit the most include:
- Home loan borrowers linked to the 1-year HDFC Bank MCLR
- Borrowers whose reset date falls after January 7, 2026
- Customers with large outstanding loan balances
Borrowers linked to longer tenures like the 2-year or 3-year MCLR will not see any immediate change, as those rates remain unchanged.
EMI Impact Example: Home Loan Borrowers
Consider a home loan of ₹50 lakh with a remaining tenure of 20 years, linked to the 1-year HDFC Bank MCLR.
- Before January 2026: Interest rate = 8.45%
- After January 2026: Interest rate = 8.40%
This 0.05% reduction can lower the EMI by approximately ₹150–₹200 per month. While this may seem small, over 20 years, the total interest savings can run into tens of thousands of rupees.
For higher loan amounts, such as ₹1 crore, the savings become even more noticeable. Use our EMI Calculator to see your exact savings.
MCLR vs Repo-Linked Loans: What Borrowers Should Know
While MCLR-linked loans benefit from this reduction, borrowers on repo-linked loans may not see immediate changes unless the RBI cuts the repo rate. MCLR revisions depend on a bank’s cost of funds, whereas repo-linked loans respond faster to RBI policy changes.
Borrowers should review whether switching from MCLR to a repo-linked structure makes sense based on interest rate trends and loan tenure.
Should You Consider Loan Conversion or Balance Transfer?
The current environment of easing rates and lower EMIs ahead makes this a good time to review your loan.
You may consider:
- Loan conversion within HDFC Bank to a lower benchmark
- Balance transfer to another lender offering better long-term rates
- Re-structuring tenure to reduce EMI burden
However, borrowers must factor in conversion fees, processing charges, and documentation costs before making a decision.
How Creditcares Helps Borrowers Make the Right Move
Creditcares works as an independent loan advisory, helping borrowers analyse their existing loan structure, estimate EMI savings, and decide whether conversion or balance transfer is financially beneficial.
Instead of focusing only on headline interest rates, we help borrowers evaluate the total cost impact and long-term savings.
Final Takeaway
The latest HDFC Bank MCLR reduction in January 2026 signals gradual relief for borrowers. While the cut is modest, it reinforces the trend of lower EMIs ahead. Borrowers who stay informed and proactively review their loans can maximise savings over the long term with the right advisory support.
Ready to optimize your home loan?
Contact Creditcares today:
- 📞 Get Expert Loan Consultation
- 🧮 Use Our EMI Calculator
- 📄 Check Your Credit Score
- 💼 Explore Loan Against Property Options
Related Resources:
- SBI Home Loan vs HDFC Home Loan Comparison 2025
- How to Calculate EMI for Mortgage Loans
- HDFC Loan Against Property Interest Rate Guide
- Understanding RBI MCLR Guidelines (Official)
Disclaimer: Interest rates and policies are subject to change. Always verify current rates with your lender before making financial decisions.
