Mumbai: Union Bank of India on Thursday said it has slashed interest rates on vehicle loans in the range of 1.55-2.55 percent and brought them to a flat 10.95 percent on zero to seven-year tenor with immediate effect.
The public sector lender's move follows a similar decision by other state-run banks such as the State Bank of India (SBI) and Indian Overseas Bank (IOB), among others.
Earlier, the rates offered by the Union Bank were 12.5 percent for 0-3 years and 13.5 percent for 3-5 years, a release said here.
The bank has also extended its 'The Independence to Republic Day Festive Offer' on vehicle loans by waiving processing fees during this period.
"The reduction in interest rates and the festival offer will boost the bank's retail portfolio," Chairman and Managing Director of Union Bank D Sarkar said.
Earlier, Union Bank had reduced home loan rates to 10.5 percent besides waiving 0.5 percent processing fee on loan amount.
SBI recently reduced home loan rates to 10.25 percent from 10.5 percent for loans up to Rs 30 lakh and 10.4 percent for loans between Rs 30 lakh and Rs 75 lakh.
Similarly, the country's largest lender has reduced car loan rates to 10.75 percent from 11.25 percent earlier.
While IOB has reduced home loan rate to 10.5 percent along with 0.5 percent reduction in auto loan rates, the Central Bank of India has announced cut in interest on home loans by 25-50 basis point for the amount in Rs 30-35 lakh range with effective from September 1.