Bank of Baroda (BoB) has announced a reduction in lending rates across key retail loan products ahead of the festive season, as per news reports.
Car Loan Rate Reduction
The bank has lowered interest rates on car loans by 25 basis points. The revised rate now stands at 8.15% per annum, down from 8.40%. This reduction is applicable to new car purchases and is effective immediately. Eligibility and final loan rates will continue to depend on the borrower’s credit profile.
Loan Against Property (LAP) Revised
Rates on BoB’s loan against property offering, the Baroda Mortgage Loan, have also been revised. The new rate is 9.15%, down by 60 basis points from the earlier 9.85%. Depending on their credit scores, customers could see rate benefits ranging from 55 basis points to as much as 300 basis points.
Fixed Rate Option for Car Loans
In addition to the floating rate, the bank has introduced a fixed rate option for car loans. Linked to the 6-month marginal cost of funds-based lending rate (MCLR), this option starts at 8.65%. It is targeted at borrowers seeking stable repayment terms.
Link to Monetary Policy
This move comes on the back of recent adjustments in the broader banking sector. Since February, the Reserve Bank of India’s Monetary Policy Committee has lowered the repo rate by 100 basis points. With the repo rate currently at 5.5%, banks now have scope to ease retail lending rates further.
Festive Season Boost
The timing of the revision is significant, aligning with the start of the festive season—a period typically marked by higher demand for vehicles, homes, and big-ticket purchases. By cutting rates on both car loans and mortgage loans, BoB aims to attract more borrowers during this high-consumption cycle.
Outlook
Bank of Baroda’s latest rate cuts highlight the bank’s strategy to boost credit demand ahead of the festive season while passing on the benefits of RBI’s rate easing to customers. The reduction in car loan and loan against property rates not only makes borrowing more affordable but also positions the bank competitively in a sector where lending rates are steadily declining. With these adjustments, BoB is expected to capture higher demand from retail customers during the upcoming festive period.
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