Are your monthly EMIs eating into your savings? You’re not alone. Whether it’s a home loan, car loan, or personal loan, even a small drop in interest rates can bring much-needed breathing room. And here’s the good news two of India’s major banks just did exactly that.
If you’re feeling stretched thin by repayments or holding off on taking a loan because of high interest, this update could be the relief you’ve been waiting for.
What Just Happened: RBI Cuts Repo Rate, Banks Follow with Lower Loan Rates
When the Reserve Bank of India (RBI) slashes its repo rate, it often sets off a domino effect—and that’s exactly what we’re seeing now.
For the third time in a row, the RBI reduced the repo rate, this time by 50 basis points (bps), bringing it down to 5.75%. In response, two major banks Punjab National Bank (PNB) and HDFC Bank—have stepped up and passed the benefit to customers by cutting loan interest rates.
That means lower EMIs and more manageable repayments for you.
PNB’s New Lower Rates: A Big Relief for Borrowers
Public sector giant Punjab National Bank has reduced its Repo Linked Lending Rate (RLLR) by 50 bps, and the changes take effect starting June 9.
Here’s how it translates for you:
| Loan Type | Old Rate (Est.) | New Rate | Savings Impact |
|---|---|---|---|
| Home Loan | ~7.95% | 7.45% | Lower monthly EMIs |
| Vehicle Loan | ~8.30% | 7.80% | Reduced interest burden |
PNB also announced revised MCLR rates (Marginal Cost of Lending Rate):
- Overnight – 8.25%
- 1 month – 8.40%
- 3 months – 8.60%
- 6 months – 8.80%
- 1 year – 8.95%
- 3 years – 9.25%
These changes could mean real savings, especially if you’re considering a new loan or planning to refinance an existing one.
HDFC Bank Also Cuts Loan Rates: Here’s What’s New
HDFC Bank, India’s largest private lender, followed suit by slashing its MCLR:
| Term | Old Rate | New Rate |
|---|---|---|
| Overnight | 9.00% | 8.90% |
| 1 Month | 9.00% | 8.90% |
| 3 Months | 9.05% | 8.95% |
| 6 Months | 9.10% | 9.05% |
| 1–2 Years | 9.10% | 9.05–9.10% |
MCLR is the minimum rate banks can charge on loans, and it’s influenced by multiple factors like repo rate, operational costs, and deposits. The good news? With this move, HDFC home loans, personal loans, and car loans just got more affordable.
FAQs – You’re Not Alone in Wondering
1. Will my EMI reduce automatically with these rate cuts?
If your loan is linked to RLLR or MCLR, yes—it should. But it’s best to check with your bank.
2. What’s the difference between MCLR and repo-linked loans?
MCLR changes slowly and is reviewed monthly. Repo-linked loans adjust faster with RBI rate changes. Repo-linked loans usually offer more transparency and quicker benefits.
Why two banks has reduced the E M I, on reduction of interest rate by R B I, what about S B I rate cut? What action Govt/RBI taking on this issue.There’s no uniformity in E M I on loans.
Hi