State Bank of India (SBI) is an Indian multinational, public center banking and financial services company. It is a government owned corporation with its headquarters in Mumbai, Maharashtra. As of 2016-17, it had assets of 30.72 trillion and more than 14,000 branches, including 191 foreign offices spread across 36 countries, making it the largest banking and financial services company in India by assets. The company is ranked 232nd on the Fortune global 500 list of the world’s biggest corporations as of 2016.
State Bank of India is a banking behemoth and has 20% market share in deposits and loans among Indian commercial banks.
In this article we discuss about its interest rate, processing fee, charges, features, benefits and services.
Why do borrowers prefer SBI Home Loan, quite a lot?
State Bank of India is India’s largest PSU bank or Govt Bank. In India, somehow human psychology is that Govt banks are more trustworthy and if something goes wrong then the Government will tend to rescue the bank. The trust factor is the most crucial factor why borrowers prefer SBI Home Loan. Large queues in SBI branches are proof of the fact that it is the most trusted bank.
SBI home loans offer the lowest Interest Rate: – One can take it for granted that SBI Home Loan Interest Rate will always be the lowest among all the banks. One of the reasons is a scale of operation, or, economies of scale. Secondly, SBI has access to cheap funds as the CASA ratio is one of the best among all the banks.
Its interest rate is 8.65% to 8.70%.
Lastly, SBI is the largest home loan provider in terms of Home Loan Book value. In fact, SBI is the market leader in defining the direction of the Mortgage industry. If SBI Home Loan interest rates are cut, then all other home loan providers will have to follow suit. The best example is REPO Rate cut by Reserve Bank of India.
Hidden Charges: – It is a general perception among borrowers, that SBI Home Loan is most transparent among all.
In short, there are no hidden charges.
One of the reasons for this positive perception is the trust factor.
Processing fees is subjective and can be negotiated.
Legal Verification: – A SBI Home Loan is approved only after strict and thorough due diligence. The selfish motive of a bank is to keep NPA’s under control. If the project is approved by SBI then the loan taker can be assured that, the possibility of any legal issue in the project is minimum.
SBI MaxGain Home Loan: – MaxGain is a popular home saver loan product from SBI. SBI Maxgain is a home loan that is sanctioned as an overdraft with a limit that is equal to the approved loan amount. Your home acts as the underlying security for the overdraft account. This product has the same interest rate as the other home loans from SBI upto Rs. 1 crore. A premium of 0.25% is applied for home loans above Rs. 1 crore. There is no extra charge for use of overdraft facility. The current account comes with cheque book and net banking facility.
In other banks, the interest rate for similar Home Loan product is slightly higher than regular Home Loan Interest Rate.
Large Branch Network: – SBI has 18,354 branches in India. In the financial year 2012–13, its revenue was 2.005 trillion, out of which domestic operations contributed to 95.35% of revenue. Similarly, domestic operations contributed to 88.37% of total profits for the same financial year.
Under Pradhan Mantri Jan Yojana the of financial inclusion launched by Government in August 2014, SBI held 11,300 camps and opened over 3 million accounts by September, which included 2.1 million accounts in rural areas and 0.88 million accounts in urban areas.
As of 2014–15, the bank had 191 overseas offices spread over 36 countries having the largest presence in foreign markets among Indian banks. Click here to read about Top – up home loan in India.
Personal relation: – Almost every household has an account in State Bank of India in small cities/towns. The branch manager or bank employee of a bank knows all of the customers personally. Reason being they join their service in same branch/city and retire in the same city as a Branch Manager. Borrowers avail SBI Home Loan purely based on the personal relation with the Bank Manager or employee of an SBI branch.
It has been rated the most preferred home loan provider.
SBI Home Loans come to you on the solid foundation of trust and transparency built in the tradition of SBI.
1) Flexible repayment with tenure up to 30 years.
2) You to choose your loan amount and repayment schedule.
3) You can apply and get instant approval.
4) There is no processing fee.
5) No guarantor required
SBI offers various products, and all of these product offerings can be categorised as under:
- Home loans– which include options for new homes, resale (or pre-owned) homes, as well as construction of a house.
- Loan for Earnest Money Deposit– which is to help individuals finance their requirements towards earnest money to book residential plots/ built-up hoing uses, properties being sold by government housing agencies an urban development authorities and housing boards. Further, this loan can be repaid through the proceeds of the housing loan availed of from SBI.
- Takeover of home loans– which is a balance transfer facility to shift your existing home loan from scheduled commercial banks, or private and foreign banks and even housing finance companies (registered with the National Housing Bank) to SBI.
- Tribal Plus Scheme– which is a special housing finance scheme for the hill/ tribal areas of North East India and areas around Chandigarh, Bhopal, Lucknow, Patna and Bhubaneswar.
- Her Ghar– loans exclusively for women home owners, offered at a concessional interest rate
- FlexiPay Home Loan Scheme– which is targeted at young working professionals to ease the financial burden by offering attractive repayment options.
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