As the new year begins, there is relief news for the common man from the banking sector. Two big banks of the country have decided to cut their interest rates, due to which taking loan will now become cheaper. This change is especially beneficial for those planning to take a home loan or car loan, and will also have a wider impact on deposit account holders and existing borrowers.

HDFC Bank reduced rates on loans of different tenures, EMI burden on home and car loans will reduce.

Private sector giant HDFC Bank has announced a reduction in its Marginal Cost of Funds Based Lending Rate (MCLR). The bank has reduced the basis points for five different tenures. These revised rates implemented by the bank have become effective from January 7. After this amendment, HDFC Bank’s MCLR rates have now come down to the range of 8.25 percent to 8.55 percent. This step of the bank will have a direct impact on retail loans. Customers who have taken home loan, car loan or other loans and their interest rate is linked to MCLR can get minor relief in their monthly installment (EMI).

IDFC First Bank also gave a gift to its customers, a huge decline of 50 basis points in interest rates.

Apart from HDFC Bank, IDFC First Bank has also made a big change in its interest rates. The bank has revised its internal benchmark rates and announced new rates, which have come into effect from January 9, 2025. IDFC First Bank has directly cut the key rate by 50 basis points. After this decision, the interest rate of the bank has come down from 7 percent to 6.5 percent. Such a huge reduction is being seen as a big relief step for the customers, which has paved the way for loans to become cheaper.

Both new and old customers will get direct benefits, other banks can also make changes in the coming days.

The benefit of this reduction in interest rates will be available in two ways. First, customers who take new loans from the bank will now be offered lower interest rates. Second, the EMI burden of existing customers may reduce, although they will get the benefit only after their loan ‘reset date’ arrives. Economic experts believe that if inflation rate and global economic conditions remain under control, then in the coming months other government and private banks can also cut their interest rates to remain competitive.