State Bank of India (SBI) on Friday announced a concession on home loan rates and waived processing fees as it sought to cash in on the revival in the real estate sector.
The country’s largest lender announced an interest concession of up to 30 basis points on home loans and a 100 per cent waiver on processing fees.
The rate relief will be given to a certain category of borrowers — those with high credit scores and borrowing large sums along with the location of construction of the property.
Individuals with a high Cibil score can look forward to such a relief. These relaxations will be available till March this year.
At present, the bank’s external benchmark rate (EBR) against which retail loans are priced stands at 6.65 per cent.
SBI offers 7 per cent rate on loans up to Rs 30 lakh; 7.25 per cent for loans above Rs 30 lakh to Rs 75 lakh; and 7.35 per cent for loans above Rs 35 lakh.
SBI on Friday said it would now offer an interest rate of 6.80 per cent for loans up to Rs 30 lakh and 6.95 per cent for loans above Rs 30 lakh.
However, the rates are not much less than offered by its competitors, particularly for loans up to Rs 30 lakh.
HDFC offers 6.90 per cent to women borrowers and 6.95 per cent to other borrowers.
In ICICI Bank, interest rates up to Rs 35 lakh for salaried borrowers vary from 6.95 per cent to 7.95 per cent.
The Union Bank of India, offers an interest rate of 6.80 per cent to women borrowers and 6.85 per cent to others. For loans above Rs 30 lakh, its interest rates start from 6.90 per cent which are lower than that given by SBI.
The move comes at a time the real estate segment is expecting a revival and state governments have taken steps to boost demand.
For instance, Maharashtra has cut the stamp duty on property registration. Following this, the registration of residential properties in Mumbai rose more than two-fold in December, according to Knight Frank India.
“SBI believes it is important to offer better rates to customers displaying good repayment history as SBI home loan rates are linked to Cibil score. Interest concessions up to 30 basis points is also available in eight metro cities for loans up to Rs 5 crore,” the bank disclosed in a statement.
SBI customers can also apply through its YONO app and get additional interest concession of five basis points. Women borrowers will also get a concession of five basis points.
“We are pleased to improve our concessions to prospective home loan customers upto March’21. With SBI’s lowest interest on home loans, we believe this move will facilitate and encourage home buyers to take the home buying decision with confidence. With the nation all geared up to move ahead post pandemic, SBI would continue to support the home buyers and the real estate sector. Further, our eligible existing home loan borrowers can also avail a paperless pre-approved top-up home loan through the YONO app in just a few clicks. We wish the New Year brings in happiness to our customers with new offerings’’, CS Setty, MD (Retail & Digital Banking), SBI said.
RBI’s latest data has shown that personal loans registered a growth of 10 per cent in November 2020. This was higher than the non-food credit growth at 6 per cent.
