Bank of Baroda cuts low interest rate

Mumbai January 10: After banning the high demonetized notes from the central govt, all the banks are reduced their interest effectively. Till now Sbi bank was giving lowest interest rate 8.50% but that trademark was beaten by the bank of Baroda as they are giving 8.35% interestingly.

State-owned lender Bank of Baroda said on Monday that it will offer home loans at an interest rate of 8.35%, the lowest in the industry.

"For customers with a credit score of 760 or above, we are offering home loans at this rate. For others, the rate can go up to 9.35%," said Baburaj N.R., chief manager, retail, Bank of Baroda.

The new rates will be applicable from 7 January.

The bank's one-year marginal cost-based lending rate (MCLR) was reduced to 8.35% last week, on which it charges a premium of 100 basis points (bps) for home loans usually.

In the case of existing home loan borrowers, Bank of Baroda will allow those who are still on the base rate mechanism of calculating interest rates to convert to an MCLR-based rate free of cost.

Similarly, the rate of interest on car loans and mortgage loans by the bank also starts at 8.85% and 10.35% respectively with reduction of MCLR rates with effect from 7 January.

Last week, after cutting its MCLR by a steep 90 bps, India's largest lender State Bank of India (SBI) said it will offer home loans up to Rs30 lakh at 8.5% for women borrowers and 8.55% for other borrowers. In the case of loans between Rs30-75 lakh, the bank said it will charge an interest rate of 8.55% from women borrowers and 8.6% from others.