SBI cuts home loan rate to industry's best at 8.30%

Largest public lender State Bank of India (SBI) on Thursday lowered home loan rate by 0.05% to 8.30%, the lowest in the industry.

It has also reduced the auto loan by a similar percentage point to 8.70%.

The reduction in the retail loan rate by SBI is expected to prompt other lenders to go for a similar move.

"With this reduction, SBI's offering in the home loan is the lowest in the market. The new rates will be effective November 1," SBI said in a statement.

The reduction follows a cut in the marginal cost of funds based lending rate (MCLR) two days ago, which came after a gap of 10 months. The bank had last cut the rate on January 1.

On the rate reduction, P K Gupta, SBI MD retail banking, said, "With this reduction in rates, we are offering lowest rates for most of our product offering in retail loans. Lower rates along with wide distribution network and use of digital technology to enhance customer experience is a perfect package for any retail loan customer."

Salaried customers

The effective interest rate for all eligible salaried customers will be 8.30% per annum for loans up to Rs 30 lakh.

Rates have been reduced by 5 basis points (0.05%) in all other loan brackets.

"Over and above of 8.30% rate, an eligible home loan customer can also avail of an interest subsidy of Rs 2.67 lakh under the Pradhan Mantri Awas Yojana scheme," the statement said.

For a car loan customer, interest ranges from 8.70% to 9.20% compared to the earlier 8.75-9.25%. The exact rate depends on the amount of loan and the credit score of the individual, it said.