Banks offer interest rate cuts and cashback to retail borrowers this festive season


The slump in corporate demand for loans have resulted in banks offering various discounts for its retail borrowers. The festive season offers from banks include interest rate cuts, cashback, and waiver of processing fees for customers of car loans, home loans, and personal loans.

This festive season, banks are offering interest rate cuts, cashback, and waiver of processing fees on home loans for retail borrowers.

As per the data from the Reserve Bank of India (RBI), the growth in retail loans stood at 15% in July, when compared to 18.8% the previous year. Within that, the growth in housing loan is also seen to have reduced from 17.2% to 10.5%.

Andhra Bank, Bank of Baroda (BoB), and State Bank of India (SBI) had reduced their base rates a week before the RBI monetary policy announcement. These banks have also extended a host of benefits to their existing customers.

SBI has positioned 7,500 specialised agents to market its home loan products through field merchandising. This is in addition to hundreds of individuals employed at the bank branches for the same. SBI has also come up with the ‘Hamara Ghar’ scheme that provides a fixed interest rate of 8.35% on home loans (up to Rs.30 lakh) for the first 2 years.

SBI is hopeful of getting increased applications for its loan products during the festive season in light of the reduced interest rates and processing fee waiver. The bank is also offering top-up loans that have similar rates as home loans with no processing fee.

Axis Bank has reduced its interest rate on affordable housing loans with a brand new product named ‘Shubh Aarambh’ home loans. The programme enables borrowers to avail an EMI waiver when they apply for home loans up to Rs.30 lakh. Customers who regularly repay the loans with also get a waiver of 12 EMIs.

ICICI Bank has introduced a new home loan product that offers a 1% cashback to borrowers on every EMI. This is applicable for a loan tenure between 15 and 30 years. The bank has seen that the buying momentum accelerates during the festive season, and offers like this will help the prospective home buyer to a great extent.

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