Canara Bank cuts lending rates, making loans cheaper for customers

Canara Bank has reduced its Repo Linked Lending Rate by 25 basis points; home loans start at 7.90% and vehicle loans 8.20%

Canara Bank has announced a reduction in its Repo Linked Lending Rate (RLLR) by 25 basis points. The new term is effective from April 12 and follows the Reserve Bank of India’s decision to reduce the repo rate from 6.25 per cent to 6 per cent.

 

What is RLLR

 

RLLR is the interest rate at which banks offer loans; it's directly linked to the repo rate set by the central bank. According to RBI notice in October 2019, banks must link their retail loans to external benchmark lending rates (E-BLR). As a result, most banks now use the repo rate as the main benchmark.

 

What does it mean

 

Canara Bank customers will now enjoy lower interest rates on loans, making it cheaper to borrow money for housing, vehicles, and other needs. The bank has revised its minimum interest rates for loans, with home loans now starting at 7.90 per cent per annum and vehicle loans from 8.20 per cent per annum.

 

The cut in RLLR will bring down monthly installments for existing borrowers and make loans more affordable for new customers. This step is expected to ease financial pressure on households and promote credit growth in the economy.

 

The state-owned bank said its decision aims to quickly pass on the benefits of the RBI’s monetary policy decision to customers. With this change, Canara Bank aims to support individuals and families in achieving their goals, whether it's buying a home or a car.

 

Market trend

 

Banks are changing their RLLR after the RBI policy cut, with Indian Bank being the latest to do so.

 

Indian Bank has also reduced its home loan interest rates from 8.15 per cent to 7.90 per cent and vehicle loan rates from 8.50 per cent to 8.25 per cent. This will help lower monthly payments, making loans more affordable. The bank is also offering discounts on processing fees and no charges for paperwork, making their loan offers even more attractive.