SBI Home Loans-Cheapest Home loans in India

SBI Home Loans-Cheapest Home loans in IndiaSBI Home Loans-Cheapest Home loans in India

While there are several best home loan schemes in India, State Bank of India (SBI) home loans have been attracting several individuals who want to buy their dream home. SBI is the largest bank in India. We keep seeing SBI home loan advertisement on news paper and websites which says low EMI. In this article, I would list down about SBI Home Loans, various products in SBI Home Loans, positives and negatives of SBI Home Loans


Also read: Fixed Rate Vs Floating Rate Home Loans – Which is better option

Various products under SBI Home Loans

There are several home loan products offered by SBI. Each of them have unique features and designed for specific group of individuals.

  1. SBI Maxgain
  2. SBI Yuva Home Loan
  3. NRI Home Loans
  4. SBI Realty
  5. SBI PAL (Pre-approved Loan)
  6. SBI Tribal Plus
  7. SBI Gram Niwas
  8. SBI Sahyog Niwas

Positive points – SBI Home Loans

Cheapest home loans: SBI Home loans are cheapest home loans in India. The interest rates are 9.95% for loans up to Rs 30 Lakhs and 10.1% beyond Rs 30 Lakhs. The competitors like HDFC charges-10.15%, LICHFL and ICICI charges 10.25% interest rates. There are other banks and financial institutions which charges highest interest rates above 10.25% on home loans.

Low processing fees: Most banks charge 0.5% of loan value or Rs 10,000 as processing charges for home loans. However SBI charges 0.25% as processing charges for loan up to Rs 25 Lakhs (or Rs 1,000 which ever ie less) and Rs 6,500 for loans between Rs 25 Lakhs to Rs 75 Lakhs and Rs 10,000 for loans above Rs 75 Lakhs. Say if you are taking loan of Rs 50 Lakhs, others charge up to Rs 25,000, whereas SBI charges Rs 6,500 only.

Maximum loan to value: Majority of the banks would provide loans to value up to 80%. However SBI offers loan to value up to 90% of the property value. If you are making huge investment, 5% to 10% of property value makes a big difference.

Negative points – SBI Home Loans

Slow processing: I keep getting emails and messages that SBI does slow processing of home loans. The process, generally takes 3 to 4 weeks time. However what I heard from the readers is it is taking more than 4 weeks time. Alternative solution for such problem is to go for pre-approved home loans from SBI to reduce the processing time.

Good amount of documentation: This could be same for major banks, but it is more in PSU banks. I heard documentation process takes time. If you want to get maximum loan, you should include your spouse income or children income to get maximum loan. You should be able to prove with necessary documentation which is a lengthy process.

There are other features like No Pre-payment penalty etc. which are being offered by all banks, hence I am not showing them as unique features.

You may also like: Should you prefer pre-approved Home Loans

Conclusion: While there are a few drawbacks, I feel one should consider going for SBI Home Loans. Since you are making big investment for home, though it involves some effort, it is worth investing such time which comes with cheaper rates where you save lot of money.

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SBI Home Loans-Cheapest Home loans in India


  • Prems

    As per SBI Realty loan do I need to complete the construction with in two year or commencement of construction should be in two year.I taken realty loan from SBI on Aug 2013 and now I started the construction .But completion will take another 6 or 7 months.In this case it is allowed to run with existing interest rate for realty loan or they will increase the rate.

  • libu

    Hi Suresh,


    Any idea what rate is SBI currently offering for home loans above 30 lakhs ?


    Best regards



  • Karthik

    Hi Suresh,
    I have a query – on what balance is the monthly interest computed?
    For eg: if, on the 1st of the month, total outstanding = 8,50,000/- and my EMI (say 25,000) is paid on 10th of the month, the interest debited on the 31st of the month – will it be calculated –
    > on the balance at the beginning of the month (i.e. 8,50,000) or
    > on the balance at the end of the month (i.e. 8,50,000 – 25,000 = 8,25,000) or
    > on day-wise balance, i.e. 8,50,000 for the 1st 10 days and 8,25,000 for the remaining 20 days?

    Could you let me know?

    • Hi Karthik, For some reason I was holding this message for more than 1 week. As per my knowledge the computations would be based on the date on which your EMI is deducted. I heard that interest is computed on daily basis. Any unadjusted amount would be paid back to you after last EMI is paid by you.

      • Karthik

        Thanks Suresh. I tried calculating but none of the 3 formulae mentioned above seemed to fit, that's why I asked. Was wondering if it would have been better off to schedule EMI payments towards the end of the month (since the amt lying in your SB can fetch interest for you) if it was the 2nd case.

  • kazim

    Suresh Garu,

    Since Last 1 year i am working in Bahrain. I want to take home loan for my house. Ground floor already completed. I want to complete the first floor. For that i want to take the home loan from any bank on less intrest and EMI. I need approx. 6 lakhs. Can you please suggest me which bank is better and process to get the home loan for NRI's.



    • Kazim, For NRI’s banks would provide home loans at 0.25% to 0.5% higher interest rates due to risks involved. Like I said earlier SBI, LICHFL and HDFC Banks are good for home loans. You may get 55% of net monthly income as maximum eligible EMI. Please contact them and let me know in case you have any further queries on this.

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