A number of public sector banks cut lending rates on car loans, as announced on Tuesday, following nudging from the Finance Ministry. On Tuesday, PNB and OBC had cut their lending rates. 
State Bank of India, Dena Bank, Corporation Bank, Union Bank, and Indian Bank joined its larger peers in cutting lending rates on a slew of products.
Dena Bank, a mid-sized lender, will give home loans up to Rs 1 crore at base rate i.e. 10.25 percent, and those above it at Car Loan Interest Rate of 10.50 percent. It is giving a combo loan for a car and consumer durables with a home loan. Car loans with home one will be given at 10.25 percent up to Rs 1 crore and at 10.50 percent above Rs 1 crore. The government lender is providing consumer durable loans along with housing credit at 11.75 percent. Pricing on car loans without the combo offer has been decreased by 1 percent to 11 percent.
State Bank of India (SBI) has decided to offer auto loans at 10.55 percent. Earlier the interest rates charged by SBI on a car loan were 10.75 percent. The bank has also cut the processing fees from 0.51% of the loan amount to a flat rate of Rs. 500. It also launched a Special Festival Loan for its salary package account holders, for a purchase of two-wheelers and consumer durables, where it is giving loans starting from 12.05%.
Mangalore-based public sector lender Corporation Bank has reduced interest rates on home and Vehicle Loans as part of its ‘grand festival bonanza’. The bank reduced the rate on consumer durables from 12.25 percent to 10.5 percent. Under vehicle loans, the Bank is offering a reduction of 1 percent in interest rates for four-wheelers – for personal use. The rate of interest for vehicle loans up to Rs 50 lakh is offered at 10.65% per year.
Union Bank of India has come up with a combo offer where the present Home Loan customers will be offered a two-wheeler loan and consumer loan at 12.50%. This special festive season offer will also be offered to the customers are employees of the bank’s borrower from the MSME segment or have a salary account with the bank.
Indian Bank has decided to offer a 10.20 % interest rate if the borrower applies for a housing loan along with the consumer durable loan or Vehicle loan or all three of them. If the consumer applies for a vehicle loan, the interest rates will be 10.70%, or only two-wheeler loan the rates will be 12.95%. The bank has also decided to give home loans at 10.20% irrespective of the loan amount. Earlier the interest rates for housing loans were 10.45% above 75 Lakhs and 10.20% for below Rs 75 lakhs.
Syndicate Bank, Manipal based public sector lender, has decreased the interest rates on home loans above Rs 75 lakh by 25 basis points. Under this scheme, the interest rates on all Home Loans will be 10.25% irrespective of the quantum of loan. These new rates are effective from 9 October 2013. The bank will offer a rate of interest on four-wheeler loans from 11% to 10.90%. Similarly, the rate of interest on two-wheeler loans has also been reduced by 50 basis points to 12.25% at the current base rate. The bank has also decreased the service charges by 50% on all home loans and vehicle loans during the period.
Vijaya Bank, a Bangalore-based public sector lender has cut the interest rates on vehicle loans and consumer durables. The rate of interest offered on four-wheeler loans has been brought down by 30 basis points to 10.75 percent per annum, and on two-wheeler loans, the interest rates have been reduced by 45 basis points.
The interest rate on consumer durables for a salaried class has been cut by 220 basis points from 14.70 percent per annum to 12.50 percent per annum. The bank has already reduced the interest rate on the home loan by 80 basis points. Presently, the rate of interest offered on a home loan is 10.25% p.a. up to 75 lakh and 10.50% for loans above 75 lakhs. The new interest rates will come into effect from October 11, 2013.
After public sector banks, it is now the turn of private-sector lenders to decrease interest rates. Kotak Mahindra Bank a private sector lender has also announced to cut rates on its retail loan products ahead of the festive season. The bank has reduced the home loan interest rates by 13-20 basis points and car loan rates by 25 bps.
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