Bank of Baroda has announced a reduction in interest rates on car loans and loans against property, effective immediately. This move follows the Reserve Bank of India’s recent 100 basis points cut in the policy repo rate. The bank’s floating interest rates for car loans have been lowered from 8.40% to 8.15% per annum, while mortgage loan rates have dropped from 9.85% to 9.15% per annum.
Sanjay Mudaliar, Executive Director of Bank of Baroda, highlighted that these new rates make car ownership more affordable and mortgage loans more competitive, allowing customers to unlock higher property value and raise additional funds with interest reductions ranging from 55 to 300 basis points, depending on their CIBIL score.
The bank also offers fixed-rate car loans starting at 8.65%, linked to its six-month MCLR. Following the RBI’s rate cut, several public sector banks like SBI, Union Bank of India, and Central Bank of India have similarly reduced auto loan rates, while private banks have been slower to follow.
According to Sachin Sachdeva of Icra, public banks maintain a pricing advantage due to lower funding costs. With housing loans already competitively priced, banks are now shifting focus to vehicle loans and other asset classes to boost retail credit growth amid a cautious lending environment.