SBI announces cheaper home loans

After the Reserve Bank of India prescribed new system to improve transmission of monetary policy that is Instead of one benchmark rate, banks would indicate at least five benchmark rates varying according to tenures called Marginal Cost of funds based Lending Rates (MCLR), home loans  from the country’s largest lender, State Bank of India are set to be cheaper by 10 basis points.

Under the Marginal Cost of Funds based lending Rate (MCLR) regime, banks would quote rate starting with a rate for overnight tenor, one month, three month, six months and one year buckets. Banks can give more rates if they wish.

SBI’s benchmark rate would range between 8.85% (for overnight) to 9.35% (for three years).

Presently, SBI offers home loan at 9.55% (base rate of 9.3% plus 25 basis point premium for home loan). Under revised guidelines, it could be with MCLR for one year – 9.2% plus 25 basis point premium makes it 9.45 basis points for home loans sanctioned from April one. “Their would be savings of Rs 600 in Equated Monthly Installment (EMI) on one year loan,” said Anshula Kant, the Chief financial Officer & Deputy Managing Director, SBI.

Home Loans for Women

Are you a working woman desirous of owning your dream home? Then you have reasons enough to cheer! In India, women are privileged in terms of the schemes and concessions given to them as borrowers of a loan. Especially in home loans, women enjoy greater benefits as compared to their male counterparts.

The financial sector in India as a whole provides special consideration to women seeking home loans as they are generally perceived to be more sincere in paying their dues and less likely to default. Women are offered home loans at cheaper rate of interest by several banks.

One of the most decisive factors while buying a home loan is the rate of interest. Even a small variation makes a huge impact on the EMI (Equated Monthly Installment) that you pay to the lender. Since a home loan is a large chunk of money, allowances on the interest rate helps one save big in the complete term of the loan period. However, it is important here to know that the woman can enjoy benefits of lower rate of interest only if she becomes the primary applicant or the co-applicant in the borrowing. Again, no bank or financial institution will lend to a woman or a man if the credit track record and documentation is not satisfactory.

Some major banks that offer preferential rate of interest to woman borrowers are State Bank of India and ICICI Bank. While SBI offers Her Ghar loan at 9.85 per cent, HDFC has Woman Power home loan at the same interest rate & lends at 9.90 percent for purchase of a plot. The Terms and conditions are similar for both the banks that require women to be the sole or joint owner and first applicant of the property. Any woman who is a resident of India or non-resident Indian can apply for this loan.

ICICI Bank has two options for woman home loan seekers. First, Floating interest rate, 9.85 percent for loans up to Rs75 lakh. And second, for loans up to Rs30 lakh, fixed rate of 9.85 per cent is charged for 10 years and from the 11th year I-Base + 0.10 per cent. For loans between Rs30 lakh and Rs75 lakh, fixed rate of 9.95 per cent for 10 years and I-Base + 0.20 per cent from 11th year.

Although these schemes and offers are not widely publicized by banks or NBFCs, they are usually enthusiastic about lending to women borrowers. In addition, some states in India also provide some relief to woman owners of properties in stamp duty and registration fees.