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Union Bank cuts home, education loan rates

PSU lender says there will not be any processing fees on these loans

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Mumbai-based public sector lender of India has reduced rates on above Rs 30 lakh by 25 basis points and is now offering the home loans up to Rs 75 lakh at the base rate. However, the bank has kept its base rate unchanged at 10.5%.

In August, it had announced the reduction in interest rates on home loans up to Rs 30 lakh and was giving it a base rate. At present, it is offering loans up to Rs 75 lakh at the base rate. Loans above Rs 75 lakh and up to Rs 5 crore will be charged interest rate of 10.75%.

There will not be any processing fees on these loans, the bank said.

It also announced reduction in interest rates on education loans by 150-200 basis points on education loans. Its rate on interest on education loans now stands at 12.75% for the loans up to Rs 7.5 lakh and 12.5% for the loans above Rs 7.5 lakh.

It announced discount of 50 basis points for the female students over and above these rates making effective rate of interest for female students at 12.25% and 12% respectively for the loans up to Rs 75 lakh and loans above Rs 75 lakh.

However, the country’s largest lender State Bank of India’s home loan rates are lowest among the banks. SBI charges interest rate of 10% for the loans up to Rs 30 lakh and 10.15% for the loans above Rs 30 lakh.

SBI's lowest rates have seen its home loan disbursals tripling. SBI's 25% new home loan customers are from other banks, chairman Pratip Chaudhuri had said in the sidelines of Bancon in Pune last week.

SBI's interest rate on education loans above Rs 7.5 lakh is 11.75%. However, the loans below between Rs 4 lakh and Rs 7.5 lakh and are charged at 13% while loans below Rs 4 lakh are charged at 13.25%.

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