Public sector bank, Bank of India on Sunday (17 October 2021) announced the reduction of its home and vehicle loan interest rates. The home loan rate was cut by 35 basis points, while the vehicle loan interest rate was reduced by half a percentage point. With the announcement of this deduction, the interest rates of home loan will start from 6.50 percent, whereas earlier this interest rate was 6.85 percent. Vehicle loan interest rates earlier used to start from 7.35 percent but now its rates will start from 6.85 percent. The bank said that this special rate will be applicable from October 18, 2021 to December 31, 2021. The new interest rate will be applicable for customers applying for new loans and transfer of loans.
Processing fees for home and vehicle loans also abolished
Bank of India has also waived processing fees for home loans and vehicle loans. However, this exemption will be applicable till December 31, 2021. In recent times, almost all banks have cut home loan interest rates. Apart from the public sector, private sector banks have also reduced interest rates. Banks that have reduced home loan rates recently include State Bank of India (SBI), Punjab National Bank, ICICI Bank, Kotak Mahindra Bank, HSBC, Bank of Baroda, Canara Bank, Yes Bank.
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Banks are taking advantage of the growing demand in real estate
In view of the increasing demand in the real estate sector, banks have started cutting home loan rates. Since the home loan is secured, banks are giving more emphasis on it. It is also a long term loan. Therefore, banks keep getting interest on it for a long time. That’s why most of the banks are currently engaged in expanding their home loan portfolio. In view of the facilities provided by the government to the real estate sector, demand is expected to increase in this. Banks are trying to take advantage of this opportunity to further strengthen the home loan business.
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