Mumbai: Bank of India has decided to cut its home loan interest rates. The home loan rate stands reduced from 8.10 per cent per annum to 7.90 per cent per annum based on their credit score. The revised rates will come into effect from April 15, 2025.
In addition to home loans, Bank of India has also cut interest rates across select existing retail loan products, including vehicle loan, personal loan, loan against property, education loan and Star reverse mortgage loan. This was announced soon after RBI on April 9 cut the repo rate by 25 basis points to 6 percent. The latest repo rate cut was the second in a row after the last rate cut in February.
MCLR is the minimum rate of interest banks are allowed to give out loans to its customers. It is a benchmark interest rate and it dictates the lower limit of the interest rate for a loan. In 2019, the RBI introduced the external benchmark linked rate (EBLR) – which is linked to the repo rate – to further increase the pace of monetary policy transmission. Currently, all the retail loans are linked to EBLR. While any hike or cut in the repo rate gets immediately reflected in loans linked to EBLR, banks review interest rates under MCLR regime every month at a pre-announced date.
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Earlier leading public sector banks reduced their lending rates, bringing relief to both existing and new borrowers. Bank of India, Bank of Baroda and UCO Bank have announced the rate cut. This move is expected to make loans cheaper, encouraging more borrowing by individuals and businesses.
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