Ever since the Monetary Policy Committee of RBI has cut the repo rate. Since then, government and private banks have started cutting their interest rates. Now a name has also been included in this list. Government sector Union Bank of India announced reduction in interest rates on select retail loan products. The bank said in the statement that in view of the recent policy rate cut by the Reserve Bank of India, it has reduced the interest rates on home loan, car loan and personal loan. This will provide a lot of relief to those taking retail loans. The new rates have become effective from December 18, 2025. Let us also tell you how much interest has been reduced by Union Bank.
How much cheaper did car and personal loan become?
Under the revised interest rate, home loan interest rates have been reduced by 0.3 percent. Now it will start from Rs 7.15 per cent per annum, whereas earlier it was 7.45 per cent per annum. At the same time, the interest rates on vehicle loans have been reduced by 0.4 percent and now they will start from 7.50 percent per annum, whereas earlier it was 7.90 percent per annum. At the same time, the interest rate on personal loans has been reduced by 1.6 percent and now it will start from 8.75 percent per annum, whereas earlier it was 10.35 percent per annum. Apart from this, Union Bank of India is offering an additional discount of 0.10 percent per annum on eligible Green Finance Housing Loan and Vehicle Loan.
Why has the bank reduced the interest rates now?
This cut has been made after the six-member Monetary Policy Committee (MPC) of the Reserve Bank of India in its latest meeting held on December 5 decided to reduce the repo rate by 25 basis points to 5.25 percent. This was the fourth interest rate cut in 2025, taking the total cut in the policy rate this year to 125 basis points.
What has Union Bank said?
The bank said that with this amendment, Union Bank of India aims to support home buyers, vehicle buyers and personal loan customers by reducing borrowing costs while maintaining prudent lending standards. The revised rates are effective from December 18 and are subject to the customer’s eligibility, credit profile and other applicable terms and conditions. The bank further said that it is one of the first banks in the sector to respond to the recent monetary easing by reducing interest rates on home loans, car loans and personal loans to enhance affordability for retail borrowers.
SBI also made cuts
Earlier, the country’s largest lender, State Bank of India (SBI) had cut the marginal cost of funds-based lending rate (MCLR) by five basis points and the maximum deposit rate by 15 basis points for all tenors. SBI’s Amrit Vrishti scheme, which offered 6.6 per cent interest rate for 444 days, has been revised to 6.45 per cent. Additionally, SBI has reduced the interest rate on deposits for tenure less than two years to three years from 6.45 percent to 6.40 percent, while there is no change in other deposit tenures.