SBI slashes processing fee for the Home loans

January 24, 2012   ·   0 Comments

Country’s largest lender State Bank of India has halved the home loan processing fee, a move which could be followed by other public sector lenders in the coming days. The new fee structure is applicable starting January 11.

Slab Earlier Processing Fee Changed Processing Fee
<30 Lac 0.25% of Loan amount 0.25% of Loan amount
30-75 Lacs 10,000 Rs 6,500 Rs.
>75 Lacs 20,000 10,000 Rs.

The reason for slashing fee is to promote home loan products of the bank. Banks could offer some incentive to promote home loan product above Rs 30 lakh as there has been some moderation in this segment. It could be in the form of lowering of fee or some concession in rates if interest rates don’t come down by the end of the current fiscal

How it fairs against the Competitors:

Bank Processing Fee
ICICI Bank, AXIS Bank 0.5% of Loan amount
Bank of Baroda 0.4% till max. limit of 50,000
Bank of India 20,000 for loan b/w 25-75 Lac

In other retail loans, particularly auto loans, some banks are offering concession in rate as well as waiving of processing charges to garner higher share.

Last year, housing finance regulator National Housing Bank had directed all housing finance companies to desist from imposing a pre-payment penalty on home loan borrowers. Subsequently, many banks announced abolition of such charges.  SBI, Bank of Baroda, Bank of India, Punjab National Bank are some banks which scrapped pre-payment charges.

Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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