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ICICI Bank and HDFC Bank have slashed the interest rates on home and auto loans by 50 basis points. The reduction in rates on home and auto loans will apply to new as well as existing customers.
Other big lending houses are slowly following suit to attract people into taking loans. A cut by 25 basis points reduces the loan EMI by Rs 15 for every lakh and a cut by 50 basis points reduces the EMI by Rs 30.
The reduction could be in the wake of the anticipation of further cuts by State Bank of India. OP Bhatt, chairman of SBI, said there was room to cut the rate by further 25 basis points.
Chanda Kochhar, CEO of ICICI Bank, said there has been a change in sentiments in retail segment. People are coming forward to buy homes. Hence, more people are availing home loans. There has been some improvement recently, though not to the level of last year. Taking the present rate cut into consideration, rates for home loans up to Rs 30 lakh from ICICI and HDFC will be 9.25%. HDFC loans would be cheaper than ICICI loans for higher amounts.
Earlier, ICICI Bank had different slabs; rates for loans up to Rs 20 lakh, Rs 20-30 lakh, Rs 30 lakh & above were 9.75%, 10%, and 11.5%, respectively. The first two slabs have been merged now. For loans amounting to more than Rs 30 lakh, the rate would be between 10% and 11%, according to the profile of the customer.
