In a move that may force other banks to reduce interest rates on home loans, the State Bank of India cut its floating rate to 8% on all new loans. Saturday’s cut applies to all loans, irrespective of the amount borrowed.
Interest rates currently range between 8.5% and 11%, depending on the size of the loan. The new scheme will be on offer from Monday till April 30. Those who take loans in this 12-week period are assured of an unchanging interest rate for a whole year.
The SBI’s decision means that new borrowers benefit with EMIs on home loans of Rs 30 lakh or more set to drop sharply. The EMI on a Rs 30-lakh loan for 20 years will fall by 15%. That on a Rs 50-lakh loan will fall by 18%. Those with loans of more than Rs 75 lakh will benefit the most because of a three percentage points drop in interest rates. So much for the good news. The bad news is that most existing borrowers will not benefit. But the cut will benefit those who have borrowed under the special scheme announcedin December by the Indian Banks’ Association. Under that scheme, the interest rate on home loans up to Rs 5 lakh was fixed at 8.5% and at 9.25% for those who had borrowed between Rs 5 lakh and Rs 20 lakh.
THIS NEWS DEFINITELY HELP THOSE WHO ARE LOOKING FOR HOME LOANS THIS YEAR
In a move that may force other banks to reduce interest rates on home loans, the State Bank of India cut its floating rate to 8% on all new loans. Saturday’s cut applies to all loans, irrespective of the amount borrowed.
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