SBI vs. PNB vs. BoB vs. Kotak Mahindra: Banks Cut Home Loan Rates During The Festive Season.

Home Loan Interest Rates

Home Loan Interest Rates

During the first and second waves of the covid-19 pandemic, the demand for homes decreased a lot. A lot of Indians were kicked out of their jobs. Those engaged in business had to shut down their business activities because of stick lock down rules. As a result, the income of many Indians dried up. But, now India’s market is recovering from the damages caused by the covid Pandemic. People have started returning to work and leading everyday lives. Business activities are also increasing. Many individuals have begun looking for finances to buy their dream homes. That is why different Indian banks are making things easier for home buyers. There is good news for you if you intend to buy a home with the help of home loans.

With the commencement of festive seasons in India, different banks have started to reduce the interest rates applied on home loans. It will make housing more affordable for a large number of Indians. State Bank of India, Punjab National Bank, Bank of Baroda, and Kotak Mahindra Bank have announced their offers on home loans. Let’s have a look at those offers one by one. Then, we will discuss the benefits of such a significant move made by banks.

State Bank of India

The state bank of India leads from the front when it comes to offering home loans. As per a statement issued by Umesh Kumar, SBI Chief General Manager (CGM), SBI will provide home loans to eligible individuals in two categories. The first phase started on September 1 and lasted till October 31. The second phase is in progress from November 1 to December 31. In this period, customers can take home loans with an interest rate of 6.70%. Before this, borrowers taking loans (above 70 lakhs) from SBI had to pay approx 7.15% interest on the borrowed money.

Moreover, the bank has discarded processing fees and occupation-related interest premiums. So, it is clear that SBI has abolished the difference between a salaried or non-salaried individual. Therefore, all borrowers can apply for loan online or offline and get opportunities to borrow home loans on equal terms.

Punjab National Bank (PNB)

Like the State Bank of India, Punjab National Bank also reduced interest rates on home loans. Suppose you take a home loan above Rs 70 lakhs. You will have to pay 6.60% interest fees on the borrowed money for fifty lakhs. The bank reduced its interest rates by 0.50%. PNB announced that it is waiving service charges/processing fees on home and other loans under ‘Festival Bonanza Offer.’

Bank of Baroda (BoB)

Bank of Baroda announced it offers a waiver of 0.25% in the current applicable rates on home loans. As a result, the interest rate applied on Bank of Baroda home loans is 6.75%. In addition, the bank also eliminated loan processing fees, which offer great respite to borrowers.

Kotak Mahindra Bank

Kotak Mahindra Bank is India’s leading private sector bank. It announced that it would make a 0.15% point cut in its lending rate. So, applicants can get Kotak Mahindra Bank home loans with an interest rate of 6.50%. This offer was in force only during the festive season. It was active till November 8. This offer was applicable on new home loans and balance transfers.

Also Read : A Comprehensive Checklist for First-time Applicants of Personal Loans

Boost Your Knowledge: How To Choose The Best Home Loans?

Buying a home is an essential and lifelong investment. So, choosing the right loan is one of the vital decisions that you need to make. When it comes to finding the best home loans, you should do a lot of research work, calculate your repayments and compare different offers from various angles. There are numerous home loan options in the Indian market. Therefore, it would be best if you did the following to get the best home loan that suits your needs.

Define Your Priorities First

Priorities

Different people have different expectations when it comes to buying a new home. In India, most people buy their dream homes when the number of family members increases. On the other hand, many individuals need to move to other states or cities for a wide range of purposes. Instead of paying heavy rent every month, they love to buy affordable homes available at a moderate price tag. There are different types of homes available on sale- 1BHK, 2BHK, and 3 BHK. Construction companies design separate dwellings to meet people’s expectations. Before looking for a home loan, determine what type of home you need for yourself or your family members. It will help you to look for an ideal home within your budget.

Arrange Sufficient Money For Down Payments

Buying a home in India is a vast undertaking. It requires a considerable investment if your dream is to buy a well-furnished house with all facilities. Keep in mind that you need to make the down payment to purchase a dream home in India. Usually, down fees are likely to range between 2.25% to 20% of the total purchasing price of the house. The down payment criteria may change from one bank to another, seller, and loan package you choose. Have a close look at home sellers’ offers and inquire about the minimum down payment requirement.

You will have a general idea about how much money you need to arrange for down payments. If you are a salaried person and there are lots of dependents in your family, it isn’t easy to put a considerable sum as a down payment in a short time. Therefore, you plan to buy a home several years before and start saving money. Reduce your unnecessary expenses as far as you can and increase income sources. The best way to save money is to open a bank account and start depositing down payment money in it. Keep it a secret and have a time frame. By then you will have sufficient money.

Pay Attention To Your Credit Score.

Pay Attention to your credit score

All loan borrowers want to take a loan with the lowest possible interest rate. It is safe to say that interest rates applied on the borrowed money influence people’s decision to take a loan. Your credit score plays an essential role in applying for home loans and looking for funds with lower interest fees.If your credit score is good, the bank or any other financial organization considers your profile as a trustworthy borrower. A good credit score indicates that the borrower has repaid all loans quickly and is financially stable. The bank trusts your beginning capability and quickly approves your application for the loan. Things become pretty challenging when you have a poor credit score.

A poor credit score means that the borrower has defaulted on the loan repayment, and there is a great reason to issue a new loan to such a person. Before applying for a home loan, you need to do everything possible to keep your credit score in good condition. You need to maintain a minimum credit score of 750 or more to get approved for home loans in India. Maintaining a good credit score is not an easy job at all. You need to lead a disciplined financial life every day and reduce unnecessary expenses as much as possible. Pay all your bills on time and repay all existing loans as per the agreement. All these activities are reflected in your credit score.

A Stable Employment With Regular Monthly Income

Banks look at your employment condition and monthly income very carefully when you apply for home loans. If you hold employment with a recognized company or business organization and receive a monthly salary in your bank account, the bank may consider your profile seriously. In addition, employees of central and state governments are considered financially stable. Therefore, they receive preferential treatment from banks while applying for home loans.

Arrange All Your Documents In Proper Order

Documentation is an essential condition when you apply for home loans. The bank may demand different documents and their original copies to verify your profile and process your request for the loan. If any record is incomplete or missing at the time of the loan application process, it delays the loan processing and approval up to a great extent. Therefore, you need to arrange all documents related to your place of birth, identity, residence, employment, monthly salary, savings, credit score, bank account, etc. In addition, the availability of all documents helps professionals process your loan application fast and announce their decision.

Use Loan EMI Calculator

Loan EMI Calculator

The affordability of loans is significant. All borrowers need to know how much they can borrow and repay comfortably. Taking a loan that is beyond your capacity always leads to disaster. That is why you must use a loan EMI calculator to get a clear picture of the EMI amount, interest fees, down payments, etc. To get more information about the loan product, consult the bank officer. He will provide you with all information about the home loan you want to take. Then, based on the information and recommendations made by independent experts, you can make prudent decisions.

Compare Different Offers Carefully

In India, almost all leading banks give home loans to many needy individuals. So the market is full of options when you look for affordable sources of funds to finance the purchasing of a home. Indeed, all offers of home loans are not suitable for your needs. So it makes sense to compare different offers and review them carefully. See the loan amount, repayment tenure, interest fees, terms and conditions of various proposals and choose what is best for you.

A Clear Understanding of Foreclosure Norms

When a person stops paying a home loan and doesn’t respond to the bank’s messages, his home is most likely to be foreclosed as per the law. Before taking a home loan from a particular bank, you need to know its foreclosure terms and conditions. Recently, RBI has ended foreclosure fees. A clean understanding of foreclosure norms helps protect your interest in the best possible way.

Also Read : A Comprehensive Guide To Micro-Insurance Policies For Everyone!

Don’t Make Any Mistakes In The Loan Application.

It would not be wrong to say that financial literacy is less in India. Many people apply for loans, but only a few can get the desired loan product. One of the main reasons behind this is that they make many mistakes while applying for the loan. As a borrower, you must know the exact procedure of loan application and formalities that need to be completed. If you happen to be an ordinary person, seek help from an expert while applying for the personal loan and completing the required formalities. Correct application submission is the first step to getting the desired home loan.

Cooperate With The Banker

After receiving your application for a home loan, a team of bank executives comes into action. They start reviewing your application with all possible angles and call you for further consultation. Borrowers need to reply to the calls of bank executives and follow their instructions without making any unnecessary delay. Close cooperation with the banker expedites the processing of the personal loan or home loan. You will get the banker’s decision in a few days after completing all formalities successfully.

Conclusion

A large number of Indians dream of buying a well-furnished house. Not all of them are affluent enough to make their dream come true with their earnings themselves. Many people take home loans to purchase a home. Different banks in India offer home loans with additional terms and conditions and interest fees. Recently, some banks had deducted the interest fees of home loans. It is excellent news for those who need to buy a home without making unnecessary delays. Do some market research, seek recommendations from experts, and choose the best home loan as per your requirement. It will help you cover different expenses related to purchasing a home. A dream home gives you peace of mind and provides shelter to all your family members & coming generations.