If you’ve been feeling the pressure of high EMIs lately, here’s something that might finally make you breathe easier. Several major banks — including HDFC Bank, PNB, Bank of Baroda, Indian Overseas Bank, and Bank of India — have quietly cut their MCLR rates in 2025
And honestly, for anyone paying a home loan or personal loan, this is the kind of update you don’t want to miss.
Here’s the thing: a small cut in MCLR doesn’t look dramatic on paper, but for borrowers, it often means either your EMI comes down or your loan tenure gets shorter. Over time, that can save you thousands of rupees without you lifting a finger.
Let’s break down what’s actually happening — and what this could mean for your wallet.
Join WhatsApp
What MCLR Rate Cut 2025 Means for You
Think about it like this: MCLR is the benchmark rate banks use to price floating loans.
So when a bank reduces MCLR, your loan becomes slightly cheaper — automatically.
Most new loans today are linked to EBLR, but millions of people still have older loans based on MCLR. If you’re one of them, this update matters even more.
In September 2025, multiple banks revised their MCLR downward, giving relief to borrowers across home loans, car loans, and personal loans.
HDFC Bank: Small Cuts With Real Impact
HDFC didn’t overhaul rates across the board, but the cuts they made still matter.
- 6 months MCLR: 8.70% → 8.65%
- 1-year MCLR: 8.70% → 8.65%
- 2-year MCLR: 8.75% → 8.70%
The shorter tenures like overnight, 1 month, and 3 months remain unchanged.
But if your loan is linked to the 1-year or 6-month MCLR (most home loans are), you might feel the difference soon.
PNB: Broad Reductions Across Tenures
PNB made cuts at almost every slab:
- Overnight: 8.15% → 8.00%
- 1 month: 8.30% → 8.25%
- 3 months: 8.50% → 8.45%
- 6 months: 8.70% → 8.65%
- 1 year: 8.85% → 8.80%
- 3 years: 9.15% → 9.10%
For someone juggling a long tenure loan, this could translate into smoother EMIs within the next reset cycle.
Bank of Baroda: Meaningful Cuts for Short-Term Borrowers
BoB slashed its overnight and 3-month rates:
- Overnight: 7.95% → 7.85%
- 3 months: 8.35% → 8.20%
The rest remain unchanged, but these reductions can benefit those with short-term credit or working capital loans.
Indian Overseas Bank: Relief for Long-Term Borrowers
IOB’s cuts are small but useful:
- Overnight: 8.05% → 8.00%
- 1 year: 8.90% → 8.85%
- 2 years: 8.90% → 8.85%
- 3 years: 8.95% → 8.90%
In long loans like home loans, even a small reduction compounds over time.
Bank of India: Cuts Across Most Slabs
BOI trimmed its MCLR by 5–15 bps:
- 1 month: 8.40% → 8.30%
- 3 months: 8.55% → 8.45%
- 6 months: 8.80% → 8.70%
- 1 year: 8.90% → 8.85%
- 3 years: 9.15% → 9.00%
This gives borrowers a smoother repayment experience over the long run.
SBI & IDBI Customers: No Relief Yet
SBI and IDBI decided to keep their MCLR unchanged.
For now, their home and personal loan borrowers won’t see any EMI reduction — unless these banks roll out revisions later.
Quick Comparison of MCLR Cuts (September 2025)
| Bank | Key Tenure Cuts | Impact |
|---|---|---|
| HDFC Bank | 6m, 1y, 2y | Relief for home loan borrowers |
| PNB | Cuts across all major slabs | Broad EMI reduction potential |
| Bank of Baroda | Overnight, 3m | Helpful for short-term loans |
| IOB | 1y–3y cuts | Useful for long-term EMIs |
| Bank of India | Multiple slabs | Noticeable impact on floating loans |
| SBI / IDBI | No change | No immediate EMI benefit |
Should You Switch from MCLR to EBLR?
A lot of people wonder about this.
Here’s my honest take: EBLR-based loans usually react faster to RBI policy changes, so they can give you quicker benefits.
If your loan is still stuck on an older MCLR cycle, ask your bank about switching. It’s sometimes free, sometimes a small fee — but the long-term benefit can be worth it.
