Loan will be cheaper
If you are thinking of taking a home loan to buy a house, then this news can prove to be very beneficial for you, because in the December monetary policy meeting, RBI cut the interest rates. The Reserve Bank (RBI) on Friday announced a reduction in repo rate by 25 basis points. After this, four big banks of the country have also reduced the interest rates on their loans.
After the repo rate decreases, almost all banks make their loans cheaper. Currently, the four banks which have announced to reduce interest rates include Bank of Baroda, Indian Bank, Bank of India and Karur Vysya Bank. These banks have also implemented new rates.
Interest rates have reduced so much
If we talk about how much reduction has been made by which of these banks, then like RBI, Bank of Baroda has announced a reduction of 0.25 basis points, after which the interest rate has come down from 8.15 percent to 7.90 percent. Along with this, Indian Bank, Bank of India and Karur Vysya Bank have also reduced the interest rates by the same amount. The new rates have come into effect from 6 December 2025.
| bank name | old interest rate | new interest rate | Reduction (%) | effective date |
| Bank of Baroda (BoB) | 8.15% | 7.90% | 0.25% | 6 December 2025 |
| Indian Bank | 8.20% | 7.95% | 0.25% | 6 December 2025 |
| Bank of India | 8.35% (estimated) | 8.10% | 0.25% | 5 December 2025 |
| Karur Vysya Bank (KVB) | 8.80% | 8.55% | 0.25% | 6 December 2025 |
What is repo rate?
Repo rate is the interest rate at which RBI lends money to the banks of the country. When this rate is low, banks get money cheaply and they also start giving loans at lower interest rates. For this reason, common people get the direct benefit of reduction in repo rate and it becomes cheaper for them to take home loan.
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