Home Loan is the loan taken from any financial Institution for buying a house. in this article, we are going to look at different topic related to SBI Home Loan.
Since the value of the property goes on increasing, owning a house is a very good idea both from an owner’s point of view as well as from an investors point of view. SBI presents a convenient way to fulfill your dreams with Home Loan.
Usually, the home loan is a big amount taken for a longer period upon which interest is levied. An important tool like Home Loan EMI calculator is there to help you evaluate and plan your budget beforehand.
SBI Home loan interest rate starts from 8.35%, which is one of the best rates available in the market. The rates vary depending upon certain criteria, like occupation, the quantum of income, nature of the loan, etc.
|Loan Amount||SBI Home Loan Floating||Rate for Female Borrower|
|Up to Rs. 30 Lakh||8.40%||8.35%|
|Rs. 30 Lakh – 75 Lakh||8.55%||8.50%|
|Above Rs. 75 Lakh||8.65%||8.60%|
You definitely want to ensure that your lender provides auto-adjusted benefits on interest rates that extends into the future. That’s the reason why you need a credible lending institution with a dedicated and experienced workforce who will guide you through the entire process.
Features of SBI Home Loan
- SBI Home Loans are available for both salaried and self employed.
- Special rates for women customers.
- Home Loans granted to age group between 18 to 70 years.
- Security: Generally Mortgage of property you are planning to purchase, renovate or construct.
- Loan to Value Ratio is 90%.
- Tenure of loan is between 5 to 30 years.
- Interest rates range from 8.50% to 8.70%.
- EMI of Rs. 769 per lakh
So, are you ready for buying a house?
If the answer is YES, you must be having a lot of questions in your mind like:
- Where will I arrange the money from?
- Am I eligible for the loan?
- How much down payment do I have to do?
- How much EMI will I need to pay every month?
- How can I compare the EMI of different banks on my own?
- Where will I arrange the down payment amount and EMI amount from?
Let’s understand this with a simple example:
Let’s assume, you want to buy a house two years from now. You went to SBI bank and inquired about a home loan. The cost of the house is 50 lakhs and you want to take a loan for 2 years. The bank is offering the loan at 8.35%.
Now, you have many options, since there are a number of banks and you want to calculate and check what is the best fit for you. Now, on your own you can use the EMI calculator to check and compare with which bank to go to.
The second obvious question would be the source from where you will arrange the initial down payment?
The simplest option you have is to approach any relative or friend. But if you want to arrange it on your own then you must really think smart and be calculative in your decision. A great option is to begin with ClearTax Save!
So you have options like Savings account, RD (Recurring Deposit), SIP (Systematic Investment Plan) and many other ways to save enough for the initial down payment.
Let’s find out the best way to save your money, for down payment and for other expenses too:
|Property Value||Rs. 50 lakhs|
|Time||2 yrs. (24 months)|
|Down payment||20% of Property value = 10 lakhs|
Now, consider the different methods of saving Rs. 10 lakhs at SBI from now for these 2 years:
|Type of Investment||Interest Rate||Maturity Amount after 2 Years|
|Savings Account||3.50%||Rs. 10,37,270 (Gains=Rs. 37,270)|
|Recurring Deposit||6.40%||Rs. 10,69,457 (Gains =Rs. 69,457)|
|SIP||14-18%||Rs. 12,10,940 (Gains = Rs. 2,10,940)|
Hence from the above table SIP is the most beneficial saving’s scheme; as SIP, will enable you to invest regularly keeping in mind your goal of owning your dream home in the shortest possible time.
Home Loan EMI Calculator, how does it work?
A Home Loan EMI Calculator is a handy tool that calculates the monthly amount payable to the lender (Bank) every month. To calculate the EMI applicable on your loan amount, you need to use the sliders above to adjust the values of the Principal amount (P), Time duration (N), and Rate of interest (R).
Follow these steps to calculate your EMI Amount.
- Use the slider for Selecting Loan Amount
- Select the Loan tenure in Months using the slider
- Move the slider and select the Interest Rate
- Recalculate your EMI anytime by changing the input sliders
- EMI will be calculated instantly when you move the sliders.
Parameters to decide Interest Rates
Broadly speaking, there are criteria on which interest rates depend and vary. The amount you are going to take, your occupation, your salary, all these factors determine your interest rates.
- Loan amount: Loan amount will decide the interest rate you are going to pay. The more the loan amount, the lesser the interest rate
- Your Salary: Salary amount will also be one of the deciding factors for the interest rate you are going to pay to the bank. Higher the salary lower would be the interest rate
- Type of loan opted for: 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.
It is generally advantageous to take a housing loan as it would enable you to get tax exemptions. However, you must consult your CA/ income tax advisor to know the benefits/disadvantages in your specific case.
To become eligible for SBI home loan the eligibility standard must be matched. That becomes an important deciding factor for your loan amount. Instances like:
- Salaried, Self- Employed Professional or a Businessman
- Number of dependents
- Co-Applicants Income
- Assets, Liabilities, Stability, and Continuity of Occupation of the borrower
- Savings History
Further, the loan eligibility will also be dependent on the value of property selected by you.
The deciding factor of the loan amount that would be granted to you will be the close assessment of the value of the property, the capacity to repay the loan amount and many others to determine the potential borrowers. So, an eligibility calculator can be used for the same.
Some of the key eligibility factors are listed below:
|Interest Rate||8.35 % – 8.60%|
|Age||18 – 70 years|
|Minimum Income||Rs. 25,000|
|Job Stability in case of Salaried (in years)||2 years|
|Minimum Credit Score||650 and above|
|Loan Amount||Rs. 15 Lakh to Rs. 10 Cr|
|Loan to Value Ratio||Up to 90%|
|FOIR (Fixed Obligations to Income Ratio)||Up to 0.65|
In addition to the mentioned interest rates, home loan also carries the processing fee, foreclosure charges, actual charges towards valuation fee, advocate’s fee for property search, title investigation report, stamp duty and other charges that are applicable. Let’s discuss some charges in detail:
Foreclosure Charges – Sooner, the better. So if you want to repay your entire loan amount before the closure period, you must pay the foreclosure charges. But with SBI, you can enjoy the benefit of NIL prepayment charges. Which means NO EXTRA CHARGES!
Processing Fee – SBI 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 lacs to Rs. 75 lacs and maximum of Rs. 10,000 for the amount greater than Rs. 75 lacs.
Other Charges – In addition to the above-mentioned charges, the bank also mentions technical and legal charges, which are explained to the customer during the loan process.
Process of Applying
SBI offers an outstanding network in providing Home Loan to people across the country. They have special branches to cater the loan requirements of customers.
|For Salaried employee||For Self-Employed|
|Filled-up loan application form||Filled-up loan application form|
|2 Passport size Photographs||2 Passport size Photographs|
|ITR of last 2 years||Identity Proof – Passport/ Driving License/ Voter ID/ PAN|
|Identity Proof – Passport/ Driving License/ Voter ID/ PAN||Residential Address Proof – Lease and License/ Registered Rent Agreement/ Utility Bill (up to 3 months old), and Passport|
|Residential Address Proof – Lease and License/ Registered Rent Agreement/ Utility Bill (up to 3 months old), and Passport|
|Income Documents – 6 months’ payslips, 2 years’ Form 16s, s bank statement showing salary credit from 6 months ago and EMI debits if any|
SBI Tax Benefits:
The income tax laws in India provide certain benefits for taxpayers who avail a home loan. Such taxpayers are eligible for a deduction of the interest paid on such house property to the extent of Rs 2 lakhs in case of a self-occupied house in that particular Assessment Year (AY) while they can claim the entire interest paid during the AY as a deduction without any limit, if they have given the property on rent.
Further, the principal component of such loan repayment can be claimed as a deduction from the total income under Section 80C, up to a maximum of Rs 1.5 lakhs.
Other Banks offering Home Loans