New Delhi/Mumbai — December 24, 2025: India’s year-end lending cycle is delivering a one-two punch of consumer relief and market momentum. Union Bank of India has lowered interest rates across key retail loan products—home, vehicle and personal loans—while Vikran Engineering has landed a marquee solar EPC order in Maharashtra that is already reverberating through the stock market. [1]
The two updates are tied together by the same macro backdrop: a softer rate environment after the Reserve Bank of India (RBI) cut the repo rate to 5.25% on December 5, 2025, extending a broader easing cycle that banks are now passing on—selectively and competitively—to borrowers. [2]
Union Bank of India cuts retail loan interest rates: what changed and when
Union Bank of India’s latest repricing targets the loans that matter most to households—home loans, auto loans and personal loans—with reductions that range from 30 basis points (bps) to as much as 160 bps. The revised pricing is effective from December 18, 2025, and is subject to borrower eligibility and credit profile. [3]
The headline cuts (starting rates)
- Home loans: reduced by 30 bps, now starting at 7.15% p.a. [4]
- Vehicle loans: reduced by 40 bps, now starting at 7.50% p.a. [5]
- Personal loans: reduced by up to 160 bps, now starting at 8.75% p.a. [6]
Union Bank has also added a targeted climate-linked incentive: an additional 0.10% per annum concession on eligible green finance home loans and vehicle loans, reinforcing a push toward sustainable borrowing products even as overall rates fall. [7]
How the bank is transmitting the cut
Separately, a PTI-syndicated update noted that the reduction in final lending rates on the external benchmark linked rate (EBLR) was achieved through a tweak in spreads—a key detail for borrowers trying to understand why rates can move even when the benchmark is unchanged. [8]
Why Union Bank is cutting rates now: RBI easing and competitive pressure
Union Bank’s timing is not happening in isolation. The move follows the RBI Monetary Policy Committee’s 25 bps repo cut to 5.25% on December 5, described in multiple reports as the fourth rate cut of 2025, taking the cumulative reduction for the year to 125 bps. [9]
Banks typically respond to policy easing in two waves:
- Fast transmission products (often EBLR-linked), where rates can move quicker.
- Competitive repricing, where lenders try to win high-quality borrowers—especially in home loans—by advertising attractive “starting at” rates.
Union Bank itself has framed the reduction as a way to lower borrowing costs for homebuyers, vehicle purchasers and personal loan customers, while maintaining prudent lending standards—language that usually signals the best rates are reserved for stronger credit profiles and lower-risk cases. [10]
What it could mean for your EMI: illustrative savings on home, auto and personal loans
A reduction in the interest rate can lower EMIs (monthly instalments) or shorten the tenure—depending on the loan’s reset mechanics and the lender’s policy. To make the impact tangible, here are illustrative EMI comparisons using the standard amortisation formula and the “before/after” rates widely reported for Union Bank’s retail products.
Important: These are examples for understanding magnitude. Actual EMIs vary by sanction terms, reset dates, spreads, processing fees, credit score and product variant.
Example 1: Home loan (₹50 lakh, 20 years)
- Rate before: 7.45% p.a.
- Rate after: 7.15% p.a. [11]
- Approx EMI before: ₹40,127/month
- Approx EMI after: ₹39,216/month
- Approx monthly savings: ~₹910
- Approx savings over 20 years: ~₹2.18 lakh (₹910 × 240 months)
Example 2: Vehicle loan (₹10 lakh, 5 years)
- Rate before: 7.90% p.a.
- Rate after: 7.50% p.a. [12]
- Approx EMI before: ₹20,229/month
- Approx EMI after: ₹20,038/month
- Approx monthly savings: ~₹191
- Approx savings over 5 years: ~₹11,460
Example 3: Personal loan (₹5 lakh, 5 years)
- Rate before: 10.35% p.a.
- Rate after: 8.75% p.a. [13]
- Approx EMI before: ₹10,710/month
- Approx EMI after: ₹10,319/month
- Approx monthly savings: ~₹391
- Approx savings over 5 years: ~₹23,460
The personal loan cut is the standout on paper: a reduction of up to 160 bps is large for unsecured credit, where lenders price heavily for risk. But “starting at” rates usually apply to borrowers with strong income profiles, low leverage and excellent repayment history. [14]
How borrowers can actually benefit: 5 practical checkpoints
If you’re considering a new loan—or already have one—here’s how to translate headlines into real savings:
- Check your benchmark: If your loan is EBLR-linked, changes can reflect faster; if MCLR-linked, the pass-through can be slower and sometimes smaller.
- Confirm the reset date: Even when rates are revised effective a certain date, your account may update on its next scheduled reset.
- Ask about the “green finance” concession: If you’re buying an EV or financing an eligible “green” home, that extra 0.10% reduction could matter over long tenures. [15]
- Negotiate spreads, not just the headline rate: PTI reporting highlights that spread tweaks are a lever banks use—so pricing can depend on your profile and relationship with the bank. [16]
- Run the full cost comparison: Processing fees, insurance bundling, and any part-prepayment rules can change the “real” savings more than a 10–20 bps difference.
Vikran Engineering wins ₹2,035.26 crore solar EPC order in Maharashtra
While borrowers focus on lower EMIs, equity investors are watching a different kind of number: ₹2,035.26 crore—the value of a solar EPC work order won by Vikran Engineering for projects totalling 600 MW AC across multiple sites in Maharashtra. [17]
According to Vikran Engineering’s disclosed press release filing, the order was received from Onix Renewables Limited, described as a special purpose vehicle (SPV), and was accepted on December 23, 2025. The execution is on a turnkey EPC basis, covering end-to-end work including design, engineering, procurement, supply, erection, testing and commissioning—along with supply of key components such as solar PV modules and inverters. The company expects a 12-month completion timeline. [18]
In a statement included in the filing, CMD Rakesh Markhedkar described the order as a milestone that strengthens the company’s renewable EPC momentum and positions it for growth as India scales clean energy infrastructure. [19]
Vikran Engineering stock reaction on December 24: why the market is paying attention
On December 24, 2025, Vikran Engineering’s shares rallied sharply after the order announcement, with reports citing gains of around 11%–15% in morning trade. [20]
Two details are driving the intensity of investor focus:
1) The order value is “large relative to the company”
Moneycontrol noted that the order’s consideration is ₹2,035.26 crore excluding GST, and that this figure is close to the company’s market capitalisation at the prior close (it also reported ₹2,216.40 crore when including GST and other taxes). [21]
2) A credit rating upgrade adds a second catalyst
In the same December 24 coverage, Moneycontrol reported that Infomerics upgraded Vikran Engineering’s credit ratings across multiple facilities—an update that can matter for EPC firms because order execution and working-capital cycles are closely tied to financing availability and cost. [22]
The bigger picture: cheaper credit meets faster clean-energy buildout
Put together, today’s developments underline two powerful 2025 themes:
- Rate transmission is accelerating for select retail products as lenders compete for high-quality borrowers in an easing cycle. [23]
- Renewable infrastructure remains an order-book engine for EPC players, with large multi-location solar projects continuing to attract capital and trigger sharp stock moves when wins are disclosed. [24]
For consumers, the key is to convert rate headlines into account-level benefits—by understanding benchmarks, spreads and eligibility. For investors, the focus shifts to execution: whether companies can deliver on aggressive timelines, manage costs, and convert large wins into sustainable profitability.
Quick FAQs
What is Union Bank of India’s new home loan interest rate?
Union Bank’s home loans are reported as starting at 7.15% p.a., after a 30 bps reduction, effective December 18, 2025 (subject to eligibility). [25]
How much did Union Bank cut personal loan rates?
Reported reductions are up to 160 bps, with personal loan rates starting at 8.75% p.a. [26]
Is there any extra discount for green loans?
Yes—an additional 0.10% per annum concession is reported for eligible green finance home loans and vehicle loans. [27]
What order did Vikran Engineering win?
A ₹2,035.26 crore turnkey EPC order from Onix Renewables for 600 MW AC solar projects across Maharashtra, targeted for completion in 12 months. [28]
References
1. www.business-standard.com, 2. www.reuters.com, 3. www.business-standard.com, 4. www.business-standard.com, 5. www.business-standard.com, 6. www.business-standard.com, 7. www.business-standard.com, 8. money.rediff.com, 9. www.reuters.com, 10. www.business-standard.com, 11. www.goodreturns.in, 12. www.goodreturns.in, 13. www.goodreturns.in, 14. www.business-standard.com, 15. www.business-standard.com, 16. money.rediff.com, 17. bsmedia.business-standard.com, 18. bsmedia.business-standard.com, 19. bsmedia.business-standard.com, 20. www.business-standard.com, 21. www.moneycontrol.com, 22. www.moneycontrol.com, 23. www.business-standard.com, 24. bsmedia.business-standard.com, 25. www.business-standard.com, 26. www.business-standard.com, 27. www.business-standard.com, 28. bsmedia.business-standard.com
