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State-run Punjab National Bank (PNB) on Thursday announced a reduction in interest rates on retail loans, including home and auto loans, by up to 25 basis points. PNB said in a statement that the new revised rates will apply to many products including home loans, car loans, education loans, and personal loans. This will provide loans to customers at cheaper rates. On February 7, RBI cut the repo rate by 25 basis points to 6.25 percent after five years. Since then, many public sector banks including SBI and Bank of Baroda have transferred the benefit of repo-linked lending rate (RLLR) to the customers.

PNB's new interest rates

PNB has reduced the home loan interest rate to 8.15 percent. It has waived processing fees and documentation charges till March 31, 2025.

PNB's Traditional Home Loan scheme starts at an 8.15 percent annual interest rate, with EMI per lakh being Rs 744.

The auto loan interest rate for new and old vehicles (Used & New Cars) will be 8.50 percent. EMI will start from Rs 1,240 per lakh.

PNB gives an additional rebate of 0.05 percent to promote sustainable mobility.

Reduction in education and personal loans

Punjab National Bank has reduced the minimum interest rate of education loans to 7.85 percent.

Customers can take personal loans up to a maximum of Rs 20 lakh through digital media.

For this, there will be no need to visit any branch or submit documents. The new interest rate will start from 11.25 percent.

PNB said that the new rates have become effective from February 10, 2025. Earlier, earlier this month, State Bank of India (SBI) had also reduced retail loans by 25 basis points in line with RBI's repo rate cut.

What is RLLR?

RLLR i.e. Repo Linked Lending Rate is the rate at which banks lend to customers. It is directly linked to RBI's repo rate. For customers who opt for RLLR-linked home loan, their interest rate decreases or increases according to the change in RBI's repo rate. In home loans, most customers choose floating rate, which is linked to RLLR. After the cut in RLLR, banks give customers the option of reducing EMI or reducing the loan period.

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