Top News

Canara Bank has given a big relief to its customers by reducing its Repo Linked Lending Rate (RLLR) from 8.75% to 8.25%. This new rate has come into effect from June 12, 2025. This move comes after the recent repo rate cut of 50 basis points by the Reserve Bank of India (RBI), after which the repo rate has now become 5.5%. Canara Bank has given the full benefit of this cut of RBI to its customers, due to which all the loan products of the bank have now become cheaper than before.

This decision has significantly reduced the interest rates of home loans and vehicle loans. The interest rate of home loans has now come down from 7.90% to 7.40%, while the rate of vehicle loans has come down from 8.20% to 7.70%. Its direct effect will be that the EMI of both new and old borrowers will now be reduced. That is, now fulfilling the dream of buying a house or a car has become easier and more affordable than ever before.

Effect of RBI's repo rate cut

Ever since RBI cut the repo rate by 50 basis points, there has been a race among banks and financial institutions to reduce interest rates. Canara Bank has also taken advantage of this opportunity and cut not only RLLR but also the Marginal Cost of Funds Based Lending Rate (MCLR) by 20 basis points. This reduction will be applicable for all periods, which will also benefit old loan takers, whose loans are linked to MCLR.

The repo rate is the rate at which RBI gives loans to banks. When the repo rate is low, banks are also able to give loans to their customers at a cheaper rate. Canara Bank's RLLR is directly linked to the repo rate, so the effect of RBI's policy change reaches the customers immediately. This not only maintains transparency but also provides immediate relief to the borrowers.

Home loans have become cheaper.
If you are planning to buy a house, then this is a golden opportunity for you. Canara Bank's home loan interest rate now starts from just 7.40%. Earlier this rate was 7.90%. That is, if you have taken a home loan of 50 lakhs, then there will be a significant saving in your EMI. For example, the monthly EMI for a loan of 50 lakhs for 20 years at an interest rate of 7.90% was around Rs 49,500. Now at the new rate of 7.40%, this EMI can be reduced to around Rs 47,800. That is a saving of about Rs 1,700 every month. This is just an example, your savings can be even more according to the loan amount and period.

The dream of buying a car has also become easier.
Talking about vehicle loans, Canara Bank has also reduced the interest rate here from 8.20% to 7.70%. If you are thinking of buying a new car or bike, then now the burden of EMI will be less than before. Suppose, you have taken a car loan of Rs 7 lakh for 5 years. Earlier at the rate of 8.20%, your EMI would have been around Rs 14,800. Now at the new rate of 7.70%, this EMI can be reduced to around Rs 14,500. That is, a saving of Rs 300 every month.. This small saving can lighten your budget in the long run.

Relief to old loan holders too
If you have already taken a loan from Canara Bank and it is linked to MCLR, then you will also get the benefit of this reduction. The bank has reduced MCLR by 20 basis points, which will be applicable for all periods. That is, whether your loan is for 1 year or 5 years, your interest rate will decrease and the burden of EMI will be lightened. If your loan is old and you feel that you should take advantage of the new rates, then you can also check the option of refinancing.

Why was this decision taken?

This step of Canara Bank is not just to give relief to the customers, but there is a big purpose behind it. After the RBI's repo rate cut, the banks aim to increase the demand in the credit market. That is, more and more people take loans so that money circulates in the economy. Canara Bank says that this reduction is part of their strategy, under which they want to promote economic development. With cheap loans, not only will people buy houses and cars, but businessmen will also get encouragement for investment.

Apart from this, Canara Bank's focus is also on financial inclusion. That is, connecting more and more people to the banking system and providing them with cheap credit. This step can prove to be very beneficial, especially for the middle class and small business people.

The automobile and housing sectors will get a boost
The biggest impact of this reduction by Canara Bank will be seen in the automobile and housing sector. Due to cheap loans, people will now be able to buy vehicles and houses more easily. This will not only increase consumer demand, but will also increase employment opportunities in these sectors. The real estate and automobile industries are already in recovery mode, and such steps can further accelerate their pace.

Disclaimer: This content has been sourced and edited from Amar Ujala. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.