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Home Loan? SBI home Loan or HDFC home loan

Tuesday, February 15th, 2011

Home Loan? SBI home Loan or HDFC home loan

The decision to buy a home or build a house is one of the biggest financial decisions that an individual takes. A personal home or a house gives an Individual a sense of identity. Today Government and other financial institutions including banks are encouraging people to buy houses with flexible and easy pay home loan with low home loan interest.

Yes, flexible and easy pay home loan with low interest is the assurance given to every person opting for a home loan by probably every bank offering home loan. Home loan has three essential elements the principal amount, the home loan interest and the repayment term. The Home loan interest is very important in determining the uptake of this Home loan by the masses. Due to usual human tendency, cheap home loan is preferred rather than the expensive alternative. However the Home Loan rates are, not the only factor an individual should consider, but there are several other factors an individual should consider before finalizing his decision for a home loan.

However since rates are of paramount importance for any loan including home loans lets elaborate more on it giving examples of two banks offering home loans called the SBI home loans and HDFC home loans.

SBI Home Loans come to you on the solid foundation of trust and transparency built in the tradition of State Bank of India. SBI Home Loan – For Loan amount upto Rs. 30 Lacs…. (w.e.f. 01.July.2009)

SBI Home Loan or Home loan rate during the first year (i.e. till first anniversary date from the date of first disbursement) is fixed at 8% p.a. SBI Home Loan or Home Loan rate during next two years is fixed at 8.5% p. a. SBI Home Loan or Home Loan rate after three years may be Fixed or Floating as per the borrower’s choice made at the time of sanction. If floating home loan rate option is chosen, then the home loan rates will be 2.75% below SBAR (State Bank Advance Rate). If fixed home loan rate option is chosen, then the home loan rateswill be 1.25% below SBAR prevailing on the third anniversary date from the date of first disbursement of SBI home loan and shall have a reset frequency of 5 years from the third anniversary date of the SBI home loan. Fixed interest shall be subject to force-majeure clause. For SBI home Loan amount above 30 lacs SBI Home Loan rates is fixed at 8% p.a. and 9% p.a. for first and second years of taking the SBI Home Loan, respectively and for third year if floating home loan rates option is chosen, then the home loan rate will be 1.75% below SBAR . If fixed home loan rate option is chosen, then the home loan rate will be 0.75% below SBAR.

HDFC Home Loans

HDFC’s objective, from the beginning, has been to enhance residential housing stock and promote home ownership by way of HDFC Home loans.

HDFC home loans or floating home loan rates for new customers are

9.75 per cent for HDFC home loans up to Rs 30 lakhs. 10.75 per cent for HDFC home loans more than 30 lakhs.

Thus the efforts are to keep decreasing the interest ratesto a point where it can encourage people to take more and more home loans. With increasing competition among banks, interest rates would be a deciding factor as to which bank can offer the least interest rates and which would be higher on interest rates but will try to gain customers through prompt incentives by waiving of the charges for processing and documentation, for home loans.