As the festive season kicks in, Bank of Baroda has rolled out an offer that could make borrowing a whole lot more appealing. In a market where every percentage point matters, this move stands out and it could be a game changer for anyone eyeing a new car or leveraging their property.
So, what exactly has Bank of Baroda done and how can it help you save money this festive season? Let’s break it down.
Key Changes in Loan Products
1. Floating Car Loans – Now Starting at 8.15%
Bank of Baroda has reduced the floating interest rate on new car loans from 8.40% to 8.15% per annum. This change benefits customers looking to finance a vehicle with greater affordability. However, keep in mind, your exact rate depends on your credit profile. A strong CIBIL score could fetch you the best available deal.
2. Mortgage Loans (Loan Against Property) – Now at 9.15%
For individuals looking to leverage their property for cash, Bank of Baroda’s Loan Against Property (LAP) interest rate has been cut from 9.85% to 9.15% per annum. This opens up a more cost-effective option for business expansion, education or managing personal expenses.
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Why This Matters: The Bigger Strategy
Competitive Edge in a Rising Rate Environment
At a time when many major banks are either holding or increasing interest rates to preserve their margins, Bank of Baroda’s decision to cut rates is a bold move to stand out in a competitive lending market. This positions BoB as one of the most attractive options for borrowers seeking affordable financing, especially in secured loan segments where customers shop around for the best deals.
Driving Credit Growth Through Secured Lending
By focusing on secured loans like car loans and mortgages, the bank is targeting lower-risk lending. This rate cut isn’t just a seasonal discount; it’s a calculated push to stimulate credit growth. For the bank, lower default risk and steady asset-backed returns make this a smart business play. For borrowers, it means easier access to funds at better rates.
Personalized Lending: Credit Score-Based Benefits
Bank of Baroda is also rewarding responsible financial behaviour. The better your credit score, the more you could benefit. Depending on your CIBIL score, the actual rate cut could range between 0.55% and 3%, giving individuals with a clean credit history a real advantage.
Translation? A higher score doesn’t just help with approval; it could drastically lower your borrowing costs.
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RBI’s Neutral Stance – Banks Taking the Lead
While the Reserve Bank of India (RBI) has maintained a steady policy rate for several months, it has also signaled that banks have room to make independent lending decisions. BoB’s proactive rate adjustment reflects a trend where banks are optimizing their own strategies, rather than waiting for central policy shifts.
What this shows: In a flat repo rate environment, banks like BoB are using flexibility and timing to sharpen their market edge and win over rate-sensitive borrowers.
What Should Borrowers Do?
- Compare Offers Across Banks
While Bank of Baroda’s new rates are among the most competitive in the market, it’s always smart to shop around and compare. Look at offers from other major banks and check for any hidden charges like processing fees, prepayment penalties or insurance tie-ins that might affect the overall cost.
- Know Your Credit Score – It Can Save You Money
Before applying, pull up your CIBIL score. A score above 750 significantly improves your chances of qualifying for the lowest possible rate. If your score is lower, consider waiting a bit, improving it and applying later to avoid higher EMIs.
- Look Beyond Just the Interest Rate
Many borrowers focus only on the interest rate, but other factors matter too:
- Loan tenure affects how much total interest you pay.
- Processing charges and documentation fees can add to your upfront costs.
- Foreclosure flexibility can be a game changer if you plan to repay early.
Takeaway: Read the fine print, ask questions and get a full picture before signing on the dotted line.
Conclusion
At a time when many are feeling the pinch of rising costs and stagnant interest rates, Bank of Baroda’s 0.25% rate cut is a breath of fresh air for borrowers. Whether you’re planning to buy a new car or leverage your property for additional funds, this move could help you save more and borrow smarter.
More than just a festive season promo, this is part of BoB’s larger strategy to personalize lending and make credit more accessible to individuals with strong financial discipline. For customers, that means not just lower EMIs but also greater financial freedom.
If you’ve been on the fence about taking a loan, this could be the window you were waiting for.
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