Public sector, Bank of Baroda (BoB) has entered into an agreement with the auto makers Mahindra & Mahindra and Tata Motors for extending car loans to the buyers of respective automakers.

As per the Memorandum of Understanding (MoU) signed with M&M, BoB would be a preferred financer for the entire range of the vehicles provided by the automaker. The bank has inked the pact for utility vehicles, pick ups, three-wheelers and passenger cars, said the auto maker in a statement.

M&M Senior Vice-President (Sales and Customer Care - Automotive Sector) Arun Malhotra said, "We are extremely pleased to partner with Bank of Baroda as it will provide our customers with additional retail finance options. Low interest rates and low processing fees are some of the benefits of opting for Bank of Baroda as a preferred financier."

BoB will extend loans up to 85% on the road price of the vehicle for a period of 5-7 years at an interest rate of 10.5% per annum.

At the same time the bank will also finance a range of passenger vehicles from Tata Motors. Car loans to the prospective buyers of Tata Motors will also be extended up to 85% of the invoice price at a competitive rate of 10.5% for tenure ranging up to 7 years.

The retail financing facility will be available at over 2800 branches of the bank and loans for Tata's vehicle can also be availed at 470 sales touch points of Tata Motors.