Bank Loan EMI: HDFC Bank recently increased its marginal cost of funds-based lending rate (MCLR) by 10 basis points. The new rates, effective June 8, 2026, make EMIs more expensive than before.

After HDFC Bank, now Bob and Canara Bank have also increased the interest.

Bank Interest Rate: HDFC Bank, the country's largest private bank, recently increased its marginal cost of funds-based lending rate (MCLR) by 5-10 basis points. Consequently, the one-year MCLR (to which most retail loans are linked) has risen from 8.35% to 8.40%. Similarly, the maximum increase for two-year loans has been 10bps, now standing at 8.55%.

It's worth noting that despite the Reserve Bank of India recently keeping the repo rate steady at 5.25%, banks have increased their MCLR (Marginal Cost of Funds-Based Lending Rate) due to pressure on their funding costs. This will directly impact the monthly EMIs of home, car, and personal loan borrowers.  

These banks also increased interest rates.

Bank of Baroda - This state-owned bank has revised its interest rates and implemented new rate slabs. Under this, the interest on loans with five different tenures has been increased by 0.05%. Its 1-year MCLR has increased from 8.70% to 8.75%. The 6-month MCLR has increased from 8.45% to 8.50%. The 3-month MCLR has been increased to 8.20%, from 8.15% previously. Similarly, the 1-month and 1-day MCLR have been increased to 7.95% and 7.85%, respectively.

Canara Bank - Canara Bank also recently increased interest rates following its financial review. Its one-day MCLR has been increased from 7.90% to 7.95%. Its one-month MCLR has been increased from 7.95% to 8.00%, and its three-month MCLR has been increased from 8.20% to 8.25%. Its six-month rate has been increased from 8.55% to 8.60%.

Indian Bank – Indian Bank has increased its 1-year MCLR rate by 10 basis points to 8.55%, which was earlier 8.75%.

Bank of India – Bank of India has also increased its 1 year MCLR to 8.75%.

Impact on customers

If your existing home or car loan is based on an MCLR-based floating rate, your monthly EMI will increase or your loan term will be extended upon the loan reset date. This move by banks will now offer personal loans or home loans to new customers at higher interest rates than before.