As the festive season approaches, Bank of Baroda has announced a significant interest rate cut on select car loans and mortgage (loan against property) products. This move aims to make vehicle ownership and property-based borrowing more affordable, while also boosting credit growth during India’s peak spending season.
Details of the Rate Cut
Car Loans
Floating car loan rates have been reduced by 25 basis points (bps).
New car loan interest rates now start at 8.15%, compared to the earlier 8.40%.
A fixed-rate option is also available, linked to the six-month MCLR, starting at 8.65%.
Loan Against Property (Mortgage Loans)
Mortgage loan rates have been slashed by 60 bps.
New rates begin at 9.15%, down from 9.75%.
Why This Matters
1. Boost to Borrower Affordability
Lower interest rates directly reduce EMIs, giving borrowers financial relief. This is especially beneficial for families planning big purchases during the festive season.
2. Festive Season Strategy
The timing of this cut aligns with Navratri and Diwali, when consumer demand for cars, housing, and big-ticket spending is at its peak.
3. Competitive Edge in Banking
With private banks offering attractive festive season schemes, Bank of Baroda’s rate cut enhances its competitiveness among both new and existing borrowers.
4. Push to Credit Growth
Lower lending rates are expected to attract more borrowers, driving loan demand and supporting overall credit expansion in the economy.
What Borrowers Should Know
Immediate Implementation: The reduced rates are already effective.
Credit Score Matters: The actual loan rate depends on the borrower’s credit profile.
Compare Options: Borrowers can choose between floating and fixed rates depending on repayment comfort.
FAQs
Q1. What are the new starting interest rates?
Car loans: 8.15% (floating) | Mortgage loans: 9.15%.
Q2. By how much were the rates reduced?
Car loans cut by 25 bps, mortgage loans cut by 60 bps.
Q3. Is this a limited festive season offer?
While launched ahead of festivals, no specific end date has been announced.
Q4. How does this benefit borrowers?
Lower rates mean reduced EMIs or higher eligible loan amounts.
Q5. Can I switch to the new rates if I already have a loan?
Yes, but existing borrowers may need to check for conversion fees or refinancing options.
Conclusion
Bank of Baroda’s festive season rate cuts on car loans and mortgage loans provide an excellent opportunity for borrowers to access cheaper credit. Whether you’re looking to buy a new car or leverage property for funds, this rate cut makes borrowing more affordable and strengthens consumer confidence in the banking sector.
Published on : 29th August
Published by : SMITA
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