PNB launches special scheme for Home Loan at 8.5%

State-owned Punjab National Bank has announced a festival bonanza offering home loan at 8.5 per cent, a teaser rate to attract new customer.

The concessional rate of 8.5 per cent has been fixed for three years for housing loans up to Rs. 50 lakh. As per the existing rate-card, loans up to Rs. 30 lakh attract a lowest rate of 9.25 per cent with a repayment period of 5 years while loans above Rs. 30 lakh is available at 10 per cent for similar maturity.

"Under the offer, housing loans up to Rs. 50 lakh will be available at discounted rate of interest of 8.50 per cent under fixed interest rate option (fixed for three years) across all repayment tenors," PNB said in a statement.

At the same time, new car loan borrower under fixed option will get a rebate of 0.5 per cent. The festival offer will be valid from August 20 to December 31, 2010. PNB is probably the first bank to announce loans at concessional rate to cash in on festive fervor.

Interestingly rebate comes weeks after after PNB raised its Benchmark Prime Lending Rate (BPLR) for its existing customers.

BPLR of the bank was raised 75 basis points to 11.75 per cent with effect from August 1. Home loan borrower will get full waiver of upfront processing fee and documentation charges, it said.

Besides, margin stands reduced to 15 per cent from 25 per cent for housing loans upto Rs. 20 lakh, it said. Country's largest lender State Bank of India is offering concessional home loan interest rates at 8 per cent for the first year.

The bank decided to extend its popular home loan and car loan schemes and leave their terms unchanged, following the transition to base rate system from July 1. The rates are valid till September 30.