Union Bank of India cuts rates on select retail loans by up to 160 bps

Union Bank of India has reduced rates on select retail loans from December 18, cutting home loans by 30 bps, vehicle loans by 40 bps and personal loans by up to 160 bps

State-owned Union Bank of India has reduced interest rates on select retail products, including home loans, vehicle loans and personal loans, effective December 18, by up to 160 basis points.

 

How much have home, vehicle and personal loan rates been reduced? 

Home loan rates have been cut by 30 basis points and now start at 7.15 per cent, while vehicle loan rates have been reduced by 40 basis points to start at 7.50 per cent. Interest rates on personal loans have seen a sharper cut of 160 basis points, with rates now starting at 8.75 per cent.

 

What additional concessions is the bank offering? 

 

In addition to the base rate reductions, the bank is offering an additional concession of 0.10 per cent per annum on eligible green finance home loans and vehicle loans.

 

Why has the bank reduced rates now? 

The downward revision follows the decision of the Reserve Bank of India’s six-member Monetary Policy Committee (MPC) to cut the repo rate by 25 basis points to 5.25 per cent at its latest meeting on December 5. This was the fourth rate cut in 2025, taking the cumulative reduction in the policy rate to 125 basis points for the year.

 

What has Union Bank said about the rate revision? 

“With this revision, Union Bank of India aims to support homebuyers, vehicle purchasers and personal loan customers by lowering borrowing costs while continuing to maintain prudent lending standards. The revised rates are applicable from December 18, and are subject to customer eligibility, credit profile and other applicable terms and conditions,” the bank said. It added that it is among the first banks in the sector to respond to recent monetary easing, lowering interest rates across home loans, vehicle loans and personal loans to enhance affordability for retail borrowers.

 

Previously, State Bank of India (SBI), the country’s largest lender, cut its marginal cost of funds-based lending rate (MCLR) by five basis points across tenors and the peak deposit rate by 15 bps. SBI’s Amrit Vrishti, which offered 6.6 per cent for 444 days, has been revised downward to 6.45 per cent. Additionally, SBI has cut the interest rate on deposits in the tenor of two years to less than three years to 6.40 per cent from 6.45 per cent, while leaving other deposit tenors unchanged.

 

Separately, SBI’s MCLR now ranges from 7.85 per cent to 8.80 per cent. The lender has also cut the external benchmark-linked rate (EBLR) by 25 bps to 7.90 per cent from 8.15 per cent.