Mumbai, Jan. 11 (PTI): State Bank of India (SBI) has announced a reduction in interest rates on housing, education and car loans by 0.25 per cent.

“The revised housing loan floating rate for a tenure of up to five years would be 7.5 per cent (earlier 7.75 per cent),” a senior SBI official said today.

The new floating rate will be 8 per cent (8.25 per cent) on loans for 5-15 years and 8.25 per cent (8.50 per cent) for 15-20 years.

The fixed interest rate would be higher by 0.25 per cent compared with the floating rates, he added.

Union Bank of India had last week hiked the interest rates for home loans by 0.5 per cent across all maturities for both fixed and floating options.

In case of car loans, the customers can avail of loans up to three years at floating rate of 9.25 per cent (9.5 per cent) and for three to seven years at 9.75 per cent (10 per cent).

State Bank had last reduced interest rates on housing and car loans with effect from October 1.

The bank official said that education loans of up to Rs 4 lakh and above Rs 4 lakh would be charged an interest rate of 10.5 per cent (10.75 per cent) and 11.5 per cent (11.75 per cent) respectively.

The country’s largest bank has already announced its benchmark prime-lending rate (BPLR) at 10.25 per cent, which is 25 basis points lower than its earlier prime-lending rate at 10.5 per cent.

This is in response to the Reserve Bank of India suggesting banks to determine such a rate by taking into account their actual cost of funds, operating expenses and a minimum margin to cover regulatory requirement of provisioning, capital charge and profit margin.

The benchmark PLR will be known as State Bank Advance Rate (SBAR) and all loans currently linked to PLR, SBI Medium Term Lending Rate (SBMTLR), and State Bank Long Term Advance Rate (SBSTAR) will be linked to SBAR with effect from January 1.