The Bank of Baroda cuts auto loan rates by 25 basis points through June 30

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The Bank of Baroda cut its lending rate by 25 basis points to 7.0 percent to buy new cars and sought to expand its retail loan portfolio.

The state lender’s new interest rate, which starts at seven percent for auto loans, would be tied to a borrower’s credit profile for a limited period until June 30, 2022. The bank also announced a reduction in processing fees to a flat rate of Rs 1,500 plus Gut and Services Tax (GST) for a limited period until June 30, 2022, BOB said in a statement today.

The bank in April cut the lending rate on home loans by 25 basis points to 6.5 percent through the end of June 2022. This rate applies to all loan amounts and is linked to a borrower’s credit profile

This rate cut contrasts with the lender’s decision to increase the marginal cost of funds based lending rate (MCLR) by five basis points for various maturities beginning April 12, 2022 to increase funding costs. One year MCLR would be 7.35 percent, versus 7.30 percent.

The previous interest rate for used car and two-wheeler loans remains unchanged.

“The pandemic and subsequent lockdown impacted the auto segment, but demand for auto loans has steadily increased as the economy has opened up and people are keen to travel in their own vehicles,” said HT Solanki, General Manager – Mortgages & Others Retail Facilities, Bank of Baroda.

The car loan book increased by 20.54 per cent year-on-year to Rs 23,384 crore at the end of December 2022. The total retail loan portfolio increased by 11.13 per cent to Rs 1,28,960 crore at the end of December 2021.

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