Punjab National Bank (PNB) has announced a reduction of up to 25 basis points in the interest rates for retail loans, including home and auto loans.
This change, which aims to make loans more affordable, will apply to several products such as home loans, car loans, education loans, and personal loans.
The bank’s decision comes after the Reserve Bank of India (RBI) cut the repo rate by 25 basis points on February 7, 2025, following a five-year gap.
This rate cut has been passed on to customers by several government banks, including the State Bank of India (SBI) and Bank of Baroda.
New Interest Rates and Benefits
PNB has reduced the interest rate on home loans to 8.15%, with waived processing fees and documentation charges available until March 31, 2025.
The home loan scheme starts with an EMI of Rs 744 per lakh. For auto loans, the interest rate has been set at 8.50%, with EMIs starting from Rs 1,240 per lakh.
Additionally, PNB is offering a 0.05% rebate on auto loans to encourage Sustainable Mobility. The bank has also lowered the minimum interest rate on Education Loans to 7.85%.
For personal loans, PNB is offering up to Rs 20 lakh via a digital platform, eliminating the need to visit branches or submit documents.
The interest rate on personal loans starts from 11.25%. These new rates have been effective from February 10, 2025.
What is RLLR?
RLLR (Repo Linked Lending Rate) is the interest rate at which banks lend to their customers, directly linked to the RBI’s repo rate.
For home loans, customers usually choose a floating rate that is linked to the RLLR.
When the RBI changes the repo rate, it causes the RLLR to change as well, resulting in adjustments to the customer’s interest rate.
As a result, after the recent reduction in RLLR, banks are offering customers the option to either reduce their EMI or shorten the loan tenure.
