Public sector lender, Vijaya Bank, has announced a cut in interest rates on select retail loans by up to 80 basis points. It means that customers will receive a relief in loan rates by up to 0.8 percent. In addition to this, the bank has also done away with its processing fee for select retail loans.

The bank is providing this relief to customers as part of the festive season offering. The festive season scheme will be provided to customers from October 1, 2012 to January 31, 2013.

The loans for which interest rates have been reduced and the processing fee has been eliminated are home loans and car loans.

The interest rates on home loans have been reduced by 0.8 percent. The new interest rate for housing loans of up to Rs. 30 lakh for 10 years tenure is 10.50 percent. Earlier, it was 10.75 percent. Prepayment and processing charges have been eliminated on these loans.

On the other hand, interest rates on auto loans have been slashed by up to 0.30 percent. Vehicle loans with a repayment period of 7 years will now have be available at the rate of 11 percent.

The bank has kept its base rate at 10.45 percent. Base rate is the minimum rate of interest below which banks can not lend.