Home and auto loan customers will have to shell out more with several public sector banks including the State Bank, Punjab National Bank and Bank of India (BoI) deciding to end the concessional or limited period loan regime, popularly called teaser rates.
The public sector banks, which are offering low interest rates for the initial period of the loan to attract new customers, have decided not to extend the validity of their schemes beyond March.
In certain cases, the schemes would be discontinued during the course of this month itself. The country’s largest lender State Bank chairman OP Bhatt had said recently that special home and auto loan schemes would continue only till the end of March.
The SBI has been trying to attract more customers by offering home and auto loans as low as 8 per cent with a limited period offer. As part of the special scheme under ‘My home campaign,’ the SBI has been offering home loans (up to Rs 5 lakh) at 8 per cent interest rate during the first five years of a 10-year loan.
For loans above Rs 5 lakh and up to Rs 50 lakh, the interest rate has been fixed at 8 per cent during the first year and 8.5 per cent during second and third years.
Bank of India executive director M Narendra said, “our scheme is valid till February. We may not continue the scheme post-February.”
The scheme, he added, was launched for a limited period and the product has served the purpose.