Pune: The Bank of Maharashtra has reduced the home and car loan rates, effective from Monday (August 14).
With the latest cuts, customers will pay an interest of 8.5% for home loans in place of 8.6%. Similarly, car loan rates have been reduced to 8.7% from 8.9%.
The interest rate charged by the bank on home loans is floating. It is linked to the repo rate fixed by the Reserve Bank of India (RBI).
Such loans are called repo-linked loan rates (RLLR). The RLLR is at 9.3%, according to the lender’s website. The move to cut interest rates comes after the central bank kept the repo rate unchanged at 6.5% three times in a row.
The interest rate of 8.6% on home loans is charged for those borrowers who have a Cibil score of 800 and above, which is at a discount to RLLR. The interest charged increases as the score goes down and the effective interest can be much higher than RLLR in case the score is very low.
Similarly, the bank offers car loans at sub-RLLR interest rates to borrowers with high Cibil score.
Separately, the processing fee on some retail loans such as education and gold would be waived off, a statement from the bank said. The bank has increased marginal cost of funds — based lending rates (MCLR) to 8.6% from 8.5%. Typically, MCLR rates, which move as per cost of deposits to a particular bank, are charged on non-retail loans.
The bank’s retail loans stood at Rs36,117 crore as of June 30, of which more than half are home loans. Overall, retail loans form 26% of its total loan book, while corporate lending is at 42%.
