Joy! Buying house just got cheaper; SBI removes this charge from home loan
Indias largest public sector bank, State Bank of India offers home loans at highly attractive rates to its customers. However, SBI customers need to pay a few additional charges apart from interest rates.
Buying home is a dream of many, distant though it may seem in reality. Home loan is the most viable option available for salaried class to turn this dream into reality. India's largest public sector bank, State Bank of India offers home loans at highly attractive rates to its customers. However, SBI customers need to pay a few additional charges apart from interest rates. This includes processing fee, technical and legal charges and prepayment charges. This increases the overall cost of the loan and puts additional burden on homebuyers.
Now, in what comes as a good news for buyers, SBI has decided to remove the processing fee. This means that homebuyers will not have to pay the fee during the loan process. The offer will be applicable till February 28, 2019. As of now, the State Bank of India charges a processing fee of 0.25% of the loan amount, minimum Rs 1000/-, up to Rs 25 lacs; Rs. 6500 for an amount above Rs 25 lakhs to Rs 75 lakhs and maximum of Rs 10,000 for the amount greater than Rs. 75 lakhs.
What are the other charges levied by SBI on home loans?
Even though there will be no processing fee, the customers need to keep in mind that they will still have to pay other additional charges:
Technical and Legal Charges - The lender charges technical and legal charges which are explained to the customer during the loan process.
Prepayment Charges - If the customers decide to prepay their loan, they need to pay foreclosure charges. Currently. SBI is charges NIL prepayment charges which means no extra payment.
What factors decided SBI home loan interest rates?
The bank looks at three factors to decided home loan rates:
Loan amount: The more the loan amount, the lesser the interest rate
Salary: Higher the salary lower would be the interest rate
Type of loan: The concessional rate of the home loan is offered for certain borrowers. Say, women borrowers enjoy a lower rate of interest compared to others, under different schemes. This way the interest rate could be higher or lower.
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