28 Aug 2025 : Bank of Baroda (BoB), one of India’s leading public sector lenders, today announced significant reductions in interest rates for car loans and mortgage (loan against property) products, effective immediately.
In a bid to offer timely support amid the festive season and stimulate credit demand, the bank has lowered floating car loan interest rates from 8.40% p.a. to 8.15% p.a.—a meaningful 25 basis points reduction. These rates are applied to new vehicle purchases and vary based on the borrower’s credit profile. In addition to the floating rate, BoB continues to offer a fixed-rate car loan option tied to its 6-month Marginal Cost of Funds-based Lending Rate (MCLR), starting at 8.65% p.a.
Simultaneously, the bank has trimmed the rate on its Baroda Mortgage Loan (Loan Against Property) from 9.85% p.a. down to 9.15% p.a., underscoring its strategy to unlock property value for customers at lower credit costs. As articulated by Sanjay Mudaliar, Executive Director of Bank of Baroda, this rate cut ranges between 55 to 300 basis points, depending on the borrower’s CIBIL score.
These reductions come atop earlier rate cuts that followed a 100 basis points policy repo rate cut by the Reserve Bank of India, reflecting the bank’s commitment to passing on monetary benefits to its customers
These moves align with a broader trend across Indian banks to make borrowing more affordable. Recent data shows that major lenders—including SBI, HDFC Bank, PNB, and BoB—have lowered their Marginal Cost of Funds-based Lending Rates (MCLR) across several tenures, enabling reduced Equated Monthly Installments (EMIs) or shortened loan tenures for borrowers with home, auto, or personal loans .
The consistent reduction in lending rates, even when the RBI maintained its benchmark rates during the August Monetary Policy Committee meeting, demonstrates the banks’ proactive approach to supporting borrowers amid evolving economic conditions
What This Means for Borrowers:
- Car Loan Borrowers: With the floating rate now at 8.15%, car buyers can avail of significantly lower interest costs, particularly if they qualify on their credit profile.
- Loan Against Property Borrowers: Homeowners can access additional funds at reduced costs, potentially improving liquidity or servicing other personal or business needs.
- Home/Other Loan Borrowers: The broader decline in MCLR rates across banks is expected to bring relief to existing borrowers through lower EMIs or reduced tenure.
Summary
Bank of Baroda has slashed car loan interest rates to 8.15% and mortgage loan rates to 9.15%, aiming to boost credit accessibility during the festive season, as part of its rate-transmission efforts.