SBI Home Loans-Cheapest Home loans in India
While there are several best home loan schemes in India, State Bank of India (SBI) home loans have been attracting several individuals who want to buy their dream home. SBI is the largest bank in India. We keep seeing SBI home loan advertisement on news paper and websites which says low EMI. In this article, I would list down about SBI Home Loans, various products in SBI Home Loans, positives and negatives of SBI Home Loans
Also read: Fixed Rate Vs Floating Rate Home Loans – Which is better option
Various products under SBI Home Loans
There are several home loan products offered by SBI. Each of them have unique features and designed for specific group of individuals.
- SBI Maxgain
- SBI Yuva Home Loan
- NRI Home Loans
- SBI Realty
- SBI PAL (Pre-approved Loan)
- SBI Tribal Plus
- SBI Gram Niwas
- SBI Sahyog Niwas
Positive points – SBI Home Loans
Cheapest home loans: SBI Home loans are cheapest home loans in India. The interest rates are 9.95% for loans up to Rs 30 Lakhs and 10.1% beyond Rs 30 Lakhs. The competitors like HDFC charges-10.15%, LICHFL and ICICI charges 10.25% interest rates. There are other banks and financial institutions which charges highest interest rates above 10.25% on home loans.
Low processing fees: Most banks charge 0.5% of loan value or Rs 10,000 as processing charges for home loans. However SBI charges 0.25% as processing charges for loan up to Rs 25 Lakhs (or Rs 1,000 which ever ie less) and Rs 6,500 for loans between Rs 25 Lakhs to Rs 75 Lakhs and Rs 10,000 for loans above Rs 75 Lakhs. Say if you are taking loan of Rs 50 Lakhs, others charge up to Rs 25,000, whereas SBI charges Rs 6,500 only.
Maximum loan to value: Majority of the banks would provide loans to value up to 80%. However SBI offers loan to value up to 90% of the property value. If you are making huge investment, 5% to 10% of property value makes a big difference.
Negative points – SBI Home Loans
Slow processing: I keep getting emails and messages that SBI does slow processing of home loans. The process, generally takes 3 to 4 weeks time. However what I heard from the readers is it is taking more than 4 weeks time. Alternative solution for such problem is to go for pre-approved home loans from SBI to reduce the processing time.
Good amount of documentation : This could be same for major banks, but it is more in PSU banks. I heard documentation process takes time. If you want to get maximum loan, you should include your spouse income or children income to get maximum loan. You should be able to prove with necessary documentation which is a lengthy process.
There are other features like No Pre-payment penalty etc. which are being offered by all banks, hence I am not showing them as unique features.
You may also like: Should you prefer pre-approved Home Loans
Conclusion : While there are a few drawbacks, I feel one should consider going for SBI Home Loans. Since you are making big investment for home, though it involves some effort, it is worth investing such time which comes with cheaper rates where you save lot of money.
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SBI Home Loans-Cheapest Home loans in India
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dear sureshji,i want your valuable suggestion on the home loan issue. I have taken a loan of rs 10 lakhs from icici bank one year email@example.com %(floating).now rate is10.75% since sept.i have now whthdrawl rs1.5lakhs from my mf savings as mktr are higher. Now pl suggest whether i can part pay the loan amt & approach to sbi for swich over the loan?i am BE MECH&working in a private firm. I can save nearly 20k per month. Pl suggest me best option.
Vinit, Partial home loan payments should be done every year to reduce your home loan burden. It is good to pay of that money with what you are planning to do. Regd 20K per month savings, invest in diversified or large cap funds like ICICI Pru focussed blue chip fund or Birla SL Frontline funds.
Get hold of SBI Home Loan Agent, he can speed up approval process for you.
He won't charge you. SBI would pay him for procuring business.
Go for SBI Max Gain Home Loan.
Thanks for your feedback Sanjay. Good to hear about that.
I am availing SBI home loan, the product name it displays is ‘SBI EASY HL MY HOME CAMPA’. This is a teasure rate home loan taken back in 2008. The interest rate that time was 8% for the first year and I think it was 8.25 in 2nd and 3rd year of the loan. Actually I paid all the loan amount in 3 years.
Since it is an OD account I can reuse repaid money. This is what bank had told me (Correct me if I am wrong). I am out of India and it Is not possible to close the account from here. Since I have not closed down the account monthly EMI is still continuing into the loan account and all extra EMI amount after repaying the loan is sitting as a 'Book Balance'.
When I see the online statement for this loan account the rate of interest which is shown as 11.7% which is quite high than the current market rate. I am not really affected as I have fully paid the loan amount before it reached to this interest rate. In case, if I would like to use money from loan account, does 11.7% interest rate be applicable for the repayment?
Is it advisable to close this account and look for fresh home loan, if required?
Ajay, I hear what you say. Interest rate of 11.7% is very high. But you need to really check with SBI on this whether your understanding is right or is something wrong. Please call SBI to find this out. If the info is correct, you need to better take fresh loan from the same bank which they will allow.
What I know is; SBI Maxgain is a HL account type that offers the OD facility. I am not sure about 'SBI EASY HL MY HOME CAMPA’. But if the one you mentioned also provides the OD facility, then if you pull out your surplus, you have to pay the interest based on the current interest rate (which is 11.7 as you mentioned in your case)
if your HL type is something similar to Maxgain, when you login to sbionline portal, it should show the surplus amount as "Available Balance". (not the "Book Balance", which is the net outstanding). As Suresh mentioned, 11.7 ROI is too high. FYI, currently there is a onetime switch offer is available from SBI to convert your current ROI to the prevailing rate (which is 9.95% for <30l and 10.1?> 30L) with a onetime conversion fee of .56% of outstanding.
if I would like to use the surplus money from your loan account, I think it is better to switch to the prevailing rate before you pull out your money, else you will end up paying more interest. I have done this conversion few weeks back and all these were done over email and phone (I work and live in a different city from where I have the HL). Please contact your RACPC or HL Branch as soon as possible to get this moving.
Thanks for sharing the article. Currently I have home loan with Corporation Bank which is currently charging 11.25%. I have tried to shift my loan to SBI. I have visited nearest SBI branch, but every time the SBI Branch manager discouraging to take the loan from SBI saying it would take 3 – 4 months of time, the concerned staff is not available etc.. Also the branch will open at around 10:30 AM everyday which is very difficult for me to contact the branch on week days. Do you have any idea how to get the speedy process from SBI or any agent is available to do the work done from SBI. One more advantage with SBI is, it will offer uniform interest rates to all existing and new customers.
Hi Ravi, While I hear your points, but you are approaching only one SBI branch? I hope there might be many such branches in your location. Please consult any other SBI branch. It is not that you need to have a bank account where you want to apply for home loan. You can apply anywhere.
Above 30 lacs, rate of interest is 10.10%. Please correct it.
Thanks Amit. I have just corrected.