In a major relief to auto-loan seekers, the country's second largest private sector lender, HDFC Bank, has decided to slash interest rates on personal and commercial vehicles by up to 150 basis points.

In addition, the bank will also cut interest rates on corporate loans and wholesale credit, a move that will benefit small and medium enterprises and large companies.

Car and commercial vehicle loans will become cheaper by 125 basis points, while interest on two-wheeler loans will be reduced by 150 basis points, HDFC Bank Head (retail assets and credit cards) Pralay Mondal told PTI.

The auto sector has been under the tight grip of slowdown for the past two months. In December, the overall domestic auto sales declined 18.2 per cent as commercial vehicles and two-wheeler sales crashed heavily.

The bank, which is the largest financier of retail loan, currently offers car loan at 13.5-14 per cent, commercial vehicle loans at 14.5-15 per cent, while credit for two wheelers attracts interest rate at 24-24.5 per cent.

Looking forward to see if this will actually boost up the sale of cars which has declined drastically in the past few months.