Chennai: Better late than never, Indian Overseas Bank (IOB) has also announced a reduction in floating rate home loans. From Thursday home loans from IOB will be available at a rate 50 basis points or .5 percent lower than the earlier rates. This also looks like a festive offer and IOB is also trying to catch up with all the major banks.

Last few months saw a reduction in home loan rates in India by banking majors like SBI, ICICI, HDFC, IDBI, BOB, BOI, Canara Bank etc. An attempt to bring the illusive customer back into home loan segment, this reduction coincided with the festive season, when people like to spend a lot on their necessities.

This IOB's rate cut will benefit the new customers only and existing home loan customers will still have to pay at current rates. IOB has spiced up this offer with two things, first if the new home loan customer pays a margin money of 25 percent or more he can get an additional cut of 0.5 percent on his floating interest rate, secondly a discount on processing fee of 50 percent is also available with this offer.

IOB provides home loans to Self -employed, salaried individuals with a regular income, groups of individuals and members of Co-operative Societies up to a maximum of Rs. 2,000,000. 25 percent of the cost of the home loan has to be submitted as the margin money and the maximum tenure of the home loan is 20 years.