SBI targets the existing borrowers and the new borrowers with the low interest rates on home loans

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The home loan war has begun with the banking giant SBI reducing the home loan interest rates for the new borrowers as well as the existing borrowers of the rival home loan providers. This public sector bank has already started campaigning to the new home loan borrowers about the reduced home loan rates. The bank has this time decided to target the home loan borrowers with their rival banks too. Their campaigning in this segment would be directed for the customer segment achieved from home loan transfer from the rival bank to SBI.

The bank has taken this quite seriously by increasing the home loan tenure to 30 years. The loans up to Rs. 75 lacs would be offered at the interest rate of 10.15%. The base rate for the floating rate loan is 10% that decides the floating rate. The loan is offered without any pre-payment charges or foreclosure charges. The balance transfer fee is reduced to Rs. 1000. This interest rate is 0.1% higher than the one offered by home loan major HDFC.

These home loan rate amendments are offered in order to promote switching of customers amongst the home loan providers. This scheme is quite beneficial to the customers of the rival banks but the existing customers of SBI are already paying higher rate of interest and that can be a nightmare for SBI as well. The banks has already amended the home loan interest rates for the loan amounts up to Rs. 75 lacs but the loans ranging above Rs. 75 lacs will have the interest rate decided on the basis of the borrower’s credit profile. The current rate of interest for the home loans is charged at 10.3% for the loans up to 75 lacs.

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