SBI increases lending rates

The State Bank of India (SBI), India’s largest PSU bank, on Thursday, raised lending rates from 7.95 percent to 8.15 percent. SBI increases lending rates for the first time since April 2016. SBI is the first one to implement the MCLR based calculation for loan interest rates when MCLR is introduced an year ago.

There is no change in RBI policies since two quarters. But, it is observed that SBI increases lending rates. Liquidity tightening, rise in bond yield, credit demand pick up and other profitability issues are pushing the banks to up the interest rates

Just a day after SBI increases interest rates on fixed deposits, SBI increases lending rates. SBI term deposits for 7 to 45 days will earn an annual interest rate of 5.75 per cent, up from 5.25 per cent earlier. For one year deposits, SBI customers will now earn 6.40 per cent from 6.25 per cent earlier, while those deposits maturing between two years and 10 years will earn 6.50 per cent, compared with 6 per cent earlier. For senior citizens, the revised interest rates are 7 per cent on their deposits, up from earlier 6.50 per cent.

Another state-run bank PNB also raised its lending rate, effective March 1, 2018. PNB raised its one-year MCLR rate to 8.30 per cent from 8.15 per cent.

SBI increases lending rates
SBI increases lending rates – EMIs to go up

Many banks have been increasing their deposit and lending rates since the last quarter. While lending rates have been jacked up on an average of 5-10 bps by private sector lenders like HDFC Bank, Axis Bank, Kotak Mahindra Bank and Yes Bank since January, almost all the state-run lenders have been increasing their bulk deposit rates in the range of 15 bps to 125 bps.

SBI’s new marginal cost of funds-based lending rates with effect from March 1, 2018, as shared by the bank on its website –

Tenor Existing MCLR (In %) Revised MCLR (In %)
Overnight 7.7 7.8
One month 7.8 7.8
Three months 7.85 7.85
Six months 7.9 8
One year 7.95 8.15
Two years 8.05 8.25
Three years 8.1 8.35

What loanyantra does for you while SBI increases lending rates – 

Get the loan from best of banks. Know every bank’s lending rates and choose your favourite one. Be the first one to know about every lender in the banking sector. Our dedicated Customer Relationship Manager will help you through every step while you choose home loan for your dream home.

Home Loan Prepayment

I am a 26-year-old man, working in an MNC in Chennai. Last year I decided to buy a home for myself. Buying a home was my biggest dream and thanks to the lofty home loan policies that banks and HFCs are offering these days. I managed to buy a 2 BHK. Well, I succeeded in managing to bag loan from one of the government banks and got it at a reasonable interest rate.

Now, I am a satisfied person and secured that few years down the line, I will own my house. But one thing that always boggled my mind was if I wish to prepay my loan then what is the nitty-gritty associated with it. Since I work in private sector, I don’t have much time to run around the bank to fulfill the formalities and the paperwork.

Then, one of my friends suggested to go through LoanYantra, an online loan management company. Well, my association with LoanYantra proved to be a successful one and they gave great tips which definitely cleared the air that surrounded the idea of home loan prepayment. For many to avoid the hassle of running behind the banks, here I am sharing my knowledge of Home Loan Prepayment.

What is Home Loan Prepayment?

Home Loan Prepayment is paying an additional amount to the outstanding principal of the loan amount while you are in the Home Loan tenure. This additional amount is over and above the regular EMIs. This helps in reducing the principal outstanding which in return helps in reducing your EMIs and/or your home loan tenure.

It might sound easy but there is a slight catch. Banks typically levy a prepayment charge of about 2 – 3% of the outstanding loan amount. This amount is charged if you are repaying above a certain amount or you are switching your bank. Although most of the banks don’t charge extra. Thus, it’s advisable that you enquire while you apply for your home loan about the prepayment charges as well.

What You Should Know About Home Loan Prepayment 

Home Loan Prepayment can be a bit tricky as some lenders include extra fees.  In case of home loan, banks borrow funds based on the commitment for long period, these funds have to be re-assigned through credit channels for which bank has to pay additional cost. Thus, banks discourage the process of prepayment by leving an extra charge on the outstanding loan amount.

To Prepay the Home Loan, it is advisable for the concerned person to attend. If not possible,the authorized person needs to carry a letter which says that the respective person is authorized by the lender to repay the loan.

Note : RBI and the NHB have abolished penalty on home loan prepayment (home loans with flexible interest rate). So banks usually do not levy extra fess. But conditions apply.

Home Loan Prepayment Vs Tenure and EMI.

Home Loan Prepayment reduces the outstanding principal amount. So, this inturn reduces your EMI or tenure. It is always wise to calculate and choose.

Loanyantra’s Tip : It is better to reduce the tenure and keep the EMI constant. When you have an increment in the salary, you can increase the EMI which will reduce the tenure even further.

Do’s ad Don’t’s of Home Loan Prepayment:

  • Carry your ID proof (Aadhar is the most preferred one).
  • Carry your chequebook in case you need extra.
  • Also remember to mention your name, account number, home loan account number behind the cheque when you issue.
  • Collect all your previous cheques if you wish to change your EMI.
  • A proof of source of funds for your Home Loan Prepayment.
  • Make sure that you update your CIBIL database after home loan prepayment as it helps in reducing the outstanding balance and also helps in improving your credit score.
Home Loan Prepayment charges of some of the popular banks and HFCs
Banks and HFCs associated with Loan Yantra Home Loan Prepayment Charges
IDBI Not more than one prepayment in a month
DHFL 3% + Service Tax
Indiabulls ZERO
Axis Floating Rate Loan: Nil

Fixed Rate Loan: 2% of outstanding principal/amount prepaid


Words of Wisdom –

LoanYantra is committed to making a difference in the approach towards availing home loan and paying it back. We are known fro absolute customer satisfaction and we work on it continuously. Stay connected with us on and get a planned calender, timely alerts and valuable suggestions on Prepayment of your Home Loan.

Axis bank home loan interest rates

Axis bank offers one of the best attractive home loan interest rates in India. Axis bank home loan interest rates make way for those customers looking for a qualitative service and low interest rate., a pioneer in online home loan management system, helps you avail loan from the attractive products and attractive Axis bank home loan interest rates. Trust and relax as takes care of every detail from the time you look for a home loan option till you complete your loan.

Infact, helps you close the loan at the earliest possible or helps you reduce the EMI when you are in financial crisis. makes people aware of the home loan updates and fills the gap between the customer and the loan lending institute.

Know more about Axis bank home loan interest rates.

Features of Axis bank home loan

  • Avail Attractive Interest Rates
Make your housing loans affordable and easier on your pocket every month
  • Choose Your Home Loan Interest Rate Type
Fixed and floating rate options available as per your preference
  • Application Process :
thumbnail_app process
  • Transfer Loan Balance with Ease

Transfer your home loan to Axis bank without any hassles.

  • Get Service at your Doorstep

Avail or repay the home loan from the comfort of your home or office

  • Pay no prepayment charges

No prepayment charges for paying off loans before the due date (only for loans availed at floating rate of interest).

  • Be assured of transparent, quick processing

Premium banking customers can contact their Relationship Manager for details of special benefits.

  • Repay your loan over a longer tenure.

Repay your home loan in smaller EMIs, over a longer tenure, depending on the situation of your finances.

Axis Bank Home Loan Eligibility 
  • Salaried individuals eligible for home loan :

Individuals in permanent service in the Government or reputed companies fall under the home loan eligibility criteria.
Applicants should be above 21 years of age at the time of loan commencement and up to the age of 60 or superannuation, whichever is earlier at the time of loan maturity.You can check the amount you need to pay as EMI with the home loan EMI Calculator.

  • Professionals eligible for home loan :

Professionals (i.e., doctors, engineers, dentists, architects, chartered accountants, cost accountants, company secretary, management consultants only) can apply.
Applicants above 21 years of age at the time of loan commencement and up to 65 years or less at the time of loan maturity meet our housing loan criteria

  • Self-employed individuals eligible for home loan :

Any individual filing income tax returns can apply
Applicants should be above 21 years of age at the time of loan commencement and up to 65 years or less at the time of loan maturity.

Know your eligibility by using

Borrowing Limits for Axis bank home loan

Minimum – Rs. 3 lakhs
For loan upto Rs. 30 lakhs – 10%
For loan above Rs. 30 lakhs to upto Rs. 75 lakhs – 20%
For loan above Rs. 75 lakhs – 25%

axis bank home loan interest rates and Axis bank home loan
Documents Needed for Axis bank home loan :
Documents Needed Salaried Self Employed
Proof of identity Valid passport/Voter’s ID/Valid Driving license with photo graph /Pan card /Aadhar card
Proof of Income Latest 3 months salary slip / certificate for fixed salary/Latest Form 16
Last 6 months bank statement/Passbook of the salary account
IT- returns for the last 2 years along with computation of income certified by CA
Last 6 months Bank statement for operative account both personal and business.
Proof of Residence Latest Electricity Bill/utility bill/ piped gas bill/ telephone bill (Not more than 2 months old)/ Passport/Aadhar card/ Voter ID/ Driving  License.
Axis Bank Home Loan Interest Rates 

For Salaried individuals :

Sr. No Type Loan amount (Rs.) MCLR + Mark Up Effective Rate Of Interest
1 Floating Rate Loan amount upto Rs 30 lacs MCLR + 0.20% 8.35% p.a.
Loan amount upto Rs 75 lacs MCLR + 0.50% 8.65% p.a.
Loan amount above Rs 75 lacs MCLR + 0.55% 8.70% p.a.
Top Up for existing customers Upto 30%- Same rate at which the home loan is running
30%-100%- LAP rate shall be applicable

For Self-employed Individuals :

Sr. No Type Loan amount (Rs.) MCLR + Mark Up Effective Rate Of Interest
1 Floating Rate Loan amount upto Rs 30 lacs MCLR + 0.25% 8.40% p.a.
Loan amount upto Rs 75 lacs MCLR + 0.55% 8.70% p.a.
Loan amount above Rs 75 lacs MCLR + 0.60% 8.75% p.a.
Top Up for existing customers Upto 30%- Same rate at which the home loan is running
30%-100%- LAP rate shall be applicable
Marginal Cost Based Lending Rate (MCLR) – 8.15%
MCLR Reset frequency for Home Loans – Half Yearly
Base Rate – 9.00%
Customers who have availed disbursement or received a sanction prior to March 31, 2016 will continue to operate on base rate. Existing customers can get in touch with our customer care, if they wish to switch to MCLR.

Other Charges : 

Description of charges Amount (Rs.)
Processing Fee Charges Up to 1% of the Loan amount subject to minimum of Rs.10,000/-
Penal Interest Rate @24 % per annum, 2% per month
Switching Fees (Base Rate/BPLR to MCLR)#
  • When effective rate is to be kept the same – No fees
  • When effective rate is to be revised – 0.5% on outstanding principal with minimum of Rs 10000/-
Switching Fees (Floating Rate to Fixed Rate)# 1% on the outstanding principal with a minimum of 10,000/-
Switching Fees (Fixed Rate to Floating Rate)# 2% on the outstanding principal amount
Switching Fees (Higher Floating Rate to Lower Floating Rate )# Switching Fees (Higher Floating Rate to Lower Floating Rate )#
Switching Fees (Higher Floating Rate to Lower Floating Rate )# 0.5% on outstanding principal with minimum of `10,000/-The lower rate will be equal to the applicable carded interest rate only
Repayment Instruction/Cheque Return charges 500/- Per Instance
Cheque/Instrument Swap Charges 500/- Per Instance
Duplicate Statement Issuance Charges 250/- Per Instance
Duplicate Amortization Schedule Issuance Charges 250/- Per Instance
Duplicate Interest Certificate (Provisional/Actual) Issuance Charges 250/- Per Instance
Issuance Charges of Credit Report 50/- Per Instance
Issuance Charges for Photocopy of title documents 250/- Per document set
Charges on customer initiated requests for copies of documents 250/- Per document set
Prepayment Charges including part prepayment for floating rate loan NIL
Prepayment Charges for fixed rate loan 2% of the principal outstanding
Equitable Mortgage Creation Charges As applicable in the As applicable in the state
CERSAI charges Rs 50/- For Loans up to 5 Lakhs
Rs 100/- For Loans above 5 Lakhs

# For Partly Disbursed cases, charges would be calculated on total outstanding principal + undisbursed portion of sanctioned amount.

** Goods and Services tax (GST) will be charged extra as per the applicable rates, on all the charges and fees (wherever GST is applicable).

Balance Transfer Option with Axis Bank :

Do not miss a chance to lower your loan repayments when you have smarter options to choose from. Move your Home Loan outstanding balances to Axis Bank, pay lower monthly installments and enjoy the savings for the other things in life that really matter to you and your family.

  • Income Based Balance Transfer Loans
  • The eligibility of the Balance Transfer will be based on the seasoning and track-record of existing loan only
  • Avail upto 100% top up at home loan rates.

Know how much you can save by calculating in

What does when you opt Axis bank home loan :

Always avail home loan at lower interest rates. We help you pay less and pay fast. Get along with us to manage your home loan till you finish the home loan.

If you want your home loan from Axis bank, we help you to be and that too for a lesser interest rate.

We are just a missed call away 040-71011991

The moment we receive your missed call, our relationship manager will call you and will explain you about all the details, every minute one too. We will get you along a smooth ride to get you into your favourite bank at a lower interest rate.

That’s not the end..we take care of your home loan till your loan closure. You can always get back to us when you want to balance transfer or if any queries related to your home loan and the interest rates. We will constantly alert you about the market trends and the interest rates.

The choice is yours and we can serve you better than any other.


Interest Rate Subsidy on Housing Loans

Interest Rate Subsidy on Home Loans – Know More

The year 2016 ended with the honorable Prime Minister Narendra Modi’s much awaited speech. The speech gave hopes to the poor, women and senior citizens. The housing policy schemes by the P.M., made easy for the poor to have a home of their own. The new policy of home loan interest rates subsidy to the needed, raised hopes in availing a home with the help of home loan. That too for really lower interest rates.

So, here are more details about Pradhan Mantri Awas Yojana and Credit Linked Subsidy Scheme.

Pradhan Mantri Awas Yojana (PMAY)  

  1. This scheme is valid in urban India (towns, cities, metros) for urban poor of income below 6,00,000/ year and age between 21 years to 58 years.
  2. Women play vital role in this scheme. A family comprising of husband, wife and unmarried children. Beneficiary should not own a pucca house either in their name or in the name of any member of their family in any part of India to receive central assistance under the Mission Meeting income criteria defined under the scheme
  3. Credit Linked Subsidy is available for housing loans availed for new construction and addition of rooms, kitchen, toilet etc., to existing dwelling as incremental housing.  The carpet area* of house should be constructed or enhanced under this scheme should be upto 30 sq.meters for EWS(Economically Weaker Section) category and upto 60 square meters for LIG(Lower Income Group) category.
  4. For identification as EWS/LIG beneficiary under the scheme, an individual loan applicant should submit self-attested certificate/affidavit as proof of income.


Credit Linked Subsidy Scheme(CLSS).

Any citizen of India can enroll for CLSS under the following conditions. The beneficiary, at his/her discretion, can build a house of larger area but interest subvention would be limited to first Rs. 6 lakh only.

This new policy of Credit Linked Subsidy Scheme (CLSS) is applicable for the Lower Income Group (LIG) of household income less than Rs.3,00,000 and the Economically Weaker Section (EWS) of household income less than Rs.6,00,000, not only for limited square feet.

So, now let us go into details of how the CLSS scheme works.

Any eligible applicant who choose a carpet area within  60 sq.m(645 sqft) of a flat/house then the applicant gets an home loan interest rate upto INR 12,00,000/- availed from the bank.

And if any eligible applicant is applying for 2 bhk of 975 sqft super built up area which has 644sq.ft of carpet area* (the real area you can use, source –, then the flat costs Rs. 40,00,000. Now, the applicant can enjoy interest rate subsidy on housing loan for Rs. 12,00,000.

The possible ROI as per Honorable PM speech is 5.5%. The non subsidized interest rate follows the existing market interest rate, which is currently 8.5%.

Example for CLSS Indetail. 

If any qualified applicant having gross salary of Rs.50,000/- per month and age is 30 years, the person is eligible for 37.88 lakh for maximum tenure of 28 years tenure and 30 lakh for 15 years tenure(know more and calculate your eligibility ).

So, the applicant, out of Rs. 40,00,000 has to pay down payment of 20% of the market value, which is Rs. 8,00,000. For the rest of Rs. 32,00,000/-, the applicant can go for a home loan. Under Pradhan Mantri Awas Yojana (PMAY)  Credit Linked subsidy scheme(CLSS) Rs. 12,00,000 will be subsidy interest and other Rs. 20,00,000 (Rs. 32 lakhs – Rs. 12 lakhs ) go as a non subsidy which has existing market rate of interest.

Carpet Area*: Area enclosed within the walls, the actual area to lay the carpet. This area does not include the thickness of the inner walls.

NOTE : Under the Mission, beneficiaries can take advantage under one component only.

Housing and Urban Development Corporation(HUDCO)  and National Housing Bank(NHB) have been identified as Central Nodal Agencies (CNAs) to channelize this subsidy to the lending institutions and for monitoring the progress of this component. Ministry may notify other institutions as CNA in future.

How to Enroll and Apply for Credit Linked Subsidized Scheme (CLSS).

Banks have a separate application for this kind of loan. Follow the official link to  download the application.

If an applicant can qualify under Pradhan Mantri Awas Yojana (PMAY) for Credit Linked subsidy scheme(CLSS), the applicant can apply through partnered banks and get assured lower interest till you close the loan.




Can I avail a loan against another property if I already have a home loan from a bank?

Yes you can avail Loan Against Property for other loan provided you meet the eligibility requirement.

If you are falling short of eligibility, how do you increase it ?

  1. In case, if your spouse is working to increase the eligibility you can add the spouse as a co-applicant to increase the eligibility.
  2. In case if you have rented your other house, then you can show rental income and increase your eligibility.
  3. In case if you have a small loan where in you are paying high amount as EMI, then try to close it to increase the Eligibility.
  4. In case if your tenure of existing home loan is less than maximum tenure you are eligible, then increase the existing home loan tenure to get more loan.
  5. Last but not least, incase if you are paying higher interest rate then the market rate, first thing to do is to correct the EMI to existing rate and reduce the EMI. This would also increase your loan eligibility.

Your eligibility requirement would depend on following things

To get a loan will depends on following factors

  1. Your Salary or Your Business turnover + other incomes
  2. Your age
  3. Your Existing Loans
  4. Your Credit Score.
  5. Last but not the least the Property you are buying & Own contribution to pay 20% of the property

Your Salary : You should be earning enough to pay the EMI + at least 40% of earning for your living expenses.

Your Age : Based on your age, maximum Loan tenure will be decided. Before you retire i.e 58 years you should be clearing the loan.

Existing Loans : If you have any exiting Loans, you will be paying EMI so you overall eligibility would come down for the next loan.

Credit Score : Banks/NBFC would look at your credit report and based on how you have paid will decide to go if they want to give you loan

Property : When you are asking for Rs 80 lac loan, it would mean at least the property should be Rs 1 crore. Technically the price of the property should support it and you have to pay 20% from your self funding and 80% you can take loan. It should not be like for Rs 10 Lac property you are paying Rs 1 Crore.

All banks will not approve all the properties.

Plan your loan well, so that you will close faster and home will be fully yours.

If you are looking for Home Loans and want right home loan fit for you and to plan it well to close fast then apply on LoanYantra | Get Home Loan Online .

If you already have existing home loans then to plan it well and close faster, then manage the loan on Loanyantra for free Home Loan Management Company India: LOANYANTRA

What will happen if the rate of interest on home loans decreases?

It would based on what you have fill while applying your loan.

They are two possibilities, when rate of interest on home loan decreased.

  • Option 1: Fluctuating EMI
    • Here your EMI will be reduced.
  • Option 2. Fluctuating Tenure
    • Here your Tenure will be reduced.

Let me explain which one is advantage of the both .

First, when you have applied for a loan with the floating rate of Interest, you have to opt what is the change you like to have from above two options.

By default most of the banks the Option 2 is by default, i.e tenure would decrease if the rate comes down and tenure would increase if rate goes up.

Which one is better ?

If you have opted for Option 1, that EMI should change then your tenure gets fixed and when rate comes down your EMI will reduce and when rate goes high your EMI would increase. So if you are contributing maximum of your salary towards EMI then be cautious about it. It can hurt other financials.

When the rates are downward trend the keeping the EMI constant would reduce your tenure drastically. For example, for a Rs 50 lac loan for 20-year tenure if the rate drops by 0.50% then your tenure would reduce by 30-months that is (2-years 6 Months) almost saving Rs 15 lac. But if the rate are upward trend then keeping your EMI constant then your tenure is going to go up same as above by 30-more months of EMI. Which would mean Rs 15 lac more.

So, its always good to manage your loan and keep changing EMI according to your financials. In interest rate downward times decreasing Tenure is good and in interest rate upward trend increasing EMI is good.

If you plan your loan well, you will be able to close it faster and home will be fully yours.

If you already have existing home loans then to plan it well and close faster, then manage the loan on Loanyantra for free Home Loan Management Company India: LOANYANTRA

If you are looking for Home Loans and want right home loan fit for you and to plan it well to close fast then apply on LoanYantra | Get Home Loan Online

Will it be a wise decision to take a max eligible home loan?

Decision would be based on multiple factors to be consider before you make a decision.

If you are young say if you are only 28 years and present CTC is good. Consider following factors.

  1. Other financial liabilities that you have.
  2. If you are not married then there it would add value by possessing a bigger house also beware of the costs which will be there for your marriage.
  3. If your work is going to have a good increments at least by 10% annually and you are planning your professional life for moving to next stage.
  4. Property you are buying is for Living or for renting it out.
  5. Work on the tax benefits you would get because of opting for loan.

My suggestion would be go with the Maximum and try to pay as much as you can before other costs come up in life. Like the marriage, kids, there education.

Always have following,

  1. Term insurance atleast 5–10 times your present salary.
  2. 10–20% as the emergency funds of your present salary. By means of Fixed deposits or equal safer and faster withdrawal.
  3. Start a health insurance for at least 3–5 lac apart from what your company is providing.

All the above if you start early at the age of 28 would be cheaper.

Then opt for maximum home loan.

If you plan your loan well, you will be able to close it faster and home will be fully yours.

If you are looking for Home Loans and want right home loan fit for you and to plan it well to close fast then apply on LoanYantra | Get Home Loan Online .

If you already have existing home loans then to plan it well and close faster, then manage the loan on Loanyantra for free Home Loan Management Company India: LOANYANTRA

Which bank gives instant approval for home loans?

Most of the bank will give you instant sanction of Home Loan based on your Eligibility. This doesn’t mean you will compulsory that you will get a home loan for that property.

Home Loan Sanction means you are eligible for certain amount of Loan. During the sanction whey would check following things

  1. Your Salary
  2. Your age
  3. Your Existing EMI
  4. Your Credit score
  5. Your KYC

If all are in place, then banks you issue a Sanction letter. Then you can go with legality Check and technicality check of the property you have selected. If everything is clear then you would get a loan. In case any of it fails then you have sanction letter and you have 3–12 months validity based on bank. You can search for one more property and continue with the loan.

Banks also have a Pre-approved loan concept. Where in banks would issue a sanction letter and later you have certain time to finalize the property.

Advantage of Pre-Approval Loans is

  1. You get to know your Loan eligibility
  2. You reduce one step of loan before you finalize the property

Disadvantages of Pre-approval loans is :

  1. You have to pay the processing fee.
  2. It has 3–12 months validity so you have to finalize the property with in that span or else you need to submit all the documents again. Trust me selecting the first home is not so easy and not so fast unless you are lucky.
  3. Most of the case you might have to submit the KYC documents again.

I would recommend you check your eligibility on home loan comparison portals like LoanYantra | Get Home Loan Online and then you select the property. Instead of going for pre-approvals.

If you plan your loan well, you will be able to close it faster and home will be fully yours.

If you are looking for Home Loans and want right home loan fit for you and to plan it well to close fast then apply on LoanYantra | Get Home Loan Online .

If you already have existing home loans then to plan it well and close faster, then manage the loan on Loanyantra for free Home Loan Management Company India: LOANYANTRA

When Can You Go For A Home Loan Transfer

Home Loans have become the most popular tool to achieve one’s dream of buying a home. With so many banks and HFCs offering tailored home loan solutions, people are now more inclined towards home buying. Banks and HFCs have home loan eligibility calculator that will help you assess how much loan banks will give you and what will be your EMI. 

Home Loan Transfer 

Balance transfer, home loan refinancing are interchangeably used with Home Loan Transfer. It helps the borrower to avoid higher interest rates by transferring to another lender which offers lower interest rates. Borrowers usually prefer this option to reduce the burden of interest rate and EMI. The good news is that all the banks and many HFCs in India offer the facility of home loan transfer.

Do You Know!

Although Home Loan Transfer appears to be a lucrative scheme yet one needs to try cost-benefit analysis before opting for a balance transfer.

Firstly, to avail the option of Home Loan Transfer, you need to be in the good books of the bank, make sure that you pay your EMIs regularly.

Secondly, balance transfer decision depends on the difference between interest rate offered by the two banks (one from where you have taken the loan and second from the bank where you wish to transfer your home loan).

Last but not the least, the outstanding amount of the home loan and the tenure left is also an important factor to consider before going for a Home Loan Transfer. Because, it is not a good deal if unpaid loan amount and tenure both are low. Though there are no prepayment charges levied, but while transferring the loan, calculate for the processing fees. It is calculated on the outstanding loan amount, usually, the maximum is Rs. 8,000.

Calculate Before You Go For A Home Loan Transfer

Always calculate. For example, if 50 lac is outstanding loan amount and calculate-homeloan-transfer_loanyantra-comyour bank charges interest rate of 12 % then you have to pay a total of Rs 58, 01,513 as interest and you choose home loan transfer option to another bank offering interest rate of 11.5% for a time period of 15 years then the interest that you have to pay comes to be 55, 13,708 which means you save 2.87 lac.

This is a substantial amount and even if your bank levies a processing fee for home loan transfer, your saving is on a higher side. So,you can go ahead with balance transfer option.  

An important note which banks consider before lending is your credit score. Always check your credit score before applying for a balance transfer. It is important that your credit health score is good and you have all your bills cleared. 

Banks usually charge 0.5% of the loan amount or flat fees of Rs. 5000-10,000 as processing fee for home loan transfer.

How does home loan balance transfer help you?

Advantages of balance transfer includes the following :

  • It lowers the monthly installment
  • You can save on your interest and use for an important reason.
  • Makes your home loan more affordable
  • Banks and HFCs also offer customized solution that will match your requirement
Home Loan Transfer Process
  • Submit a request form to your current bank. The application also asks for the name of the new bank where you will be transferring the loan.
  • After this, the bank will look into your application and will issue an NOC (No Objection Certificate) that mentions outstanding loan amount.
  • This NOC is then submitted to the new lender and the new bank will study your credit history.
  • CIBIL score should be 700 points to get a loan. Once bank approves your application, all the property documents and other documents like ID proof, ITR etc. are transferred to the new bank.
  • Voila!!! You now have your home loan at a better interest rate and you are ready to smile even bigger now.

Our Role: LoanYantra is an unbiased platform where we offer you the best options pertaining to a home loan. Our home loan transfer service will help you find the right financial institution which will lessen your burden of home loan repayment. Moreover, we have up-to-the-minute information related to lenders and interest rate changes in particular.

Not only availing home loan transfer through loanyantra will make the process easier, but also we will keep a track of your interest rate till you close the loan and help you reduce it whenever possible which helps in saving on the home loan.

Talk to us and let us know your requirement about home loan transfer to serve you better.

State Bank of India cuts the processing fee till 31-March-2017

SBI Home Loans no processing fee for New Home Loans and for Balance Transfer till 31st March 2017.

State Bank of India to boost the volumes of Home Loan business for the last quarter of the 2017 financial year, SBI had launched a special campaign for Home Loans. Under the Home Loan campaign, Processing Fees on all Home Loan proposals(both takeover and new) sanctioned and partially/fully disbursed upto 31-Mar-2017 will be filly waived. The waiver of the processing fee will also be made available to proposals sourced upto 31st March 2017, provided the loans are partially/fully disbursed latest by 30th April 2017.

However , the processing Fee at the applicable rate will be recovered upfront in respect of all Pre-Approved Loans(PAL) and the same will be refunded to the customers by way of credit to the loan account in respect of all PAL proposals source during the campaign period upto 31-Mar-2017 and partly/fully disbursed on or before 30th April 2017

SBI Home Loan
SBI Home Loan

With the decrease in the MCLR for 1-year to 8.00% was itself a big boost to the Home Loan customers. But increase of the margins from 0.10% to 0.60% has added heavy burden to the home loan seekers. Most of the customers are still seeing the fall in the Home Loan rates from 9.10% to 8.60% which is like a mirage which is a short term profit and long term loss compare to the customer who had taken loan in Dec-2016.

Let me explain in detail,  Before I tell you, why customer who had taken home loan in Dec-2016 is better rate then present. I would like to explain, how the interest rate is set. Interest rate consist of 2 components.


Interest Rate = 1-Year MCLR  Rate + Margin Rate

Recent announcement was :  1-year MCLR Rate : 8.00 %

Margin Rate  was : 0.60 %

So effectively the Interest rate was set to  8.60 %  = 8.00 % + 0.60 %

What is 1-year MCLR ?

When we avail a loan with 1-year MCLR,  it’s 1-year Fixed loan. Which means any changes in  MCLR during that 12 months, your home loan will not be affected. For example if you availed home loan in Dec-2016 your interest rate change will be only in Dec-2017. So any change , decrease of MCLR or increase of MCLR, your home loan rate will not change during this 12 months. In Dec-2017 your home loan rate will get updated based on the 1-year MCLR during Dec-2017. Again next change will be next year Dec-2018 and this would continue till closure.

What is the Margin Rate ?

Margin Rate is what Banks take as the operational costs. It gets fixed when you have taken.  For example if you had availed home loan in Dec-2017 your home loan should have been 9.00% (8.90 + 0.10) your margin should be only 0.10 %. So your Interest rate would be 1-year MCLR + 0.10% for ever.

Now let’s compare your home loan with the new rates

Year 1-Year MCLR Customer who had taken in Dec-2016 time frame. Customer who had taken in Jan-2017 time frame.
Dec-2016 8.90 % 9.00 % (8.90+0.10)
Jan-2017 8.00 % 8.60 % (8.00+0.60)
Jan-2018 If 7.50 % in Dec & Jan 7.60 %(7.50 + 0.10) 8.30 %(7.70 +0.60)
Jan-2019 If 8.60 % in Dec & Jan 8.70% (8.60 + 0.20) 9.05% (8.60 + 0.45)
Sep-2019 If 9.25 % in Sep & Jan 9.35 %(9.25 + 0.10) 9.85%(9.25 + 0.60)

It would continue till the closure of the loan.  What we are seeing right now is, Short term profit and long term loss. People who convert to new rate without the long calculation they would start to pay every year 0.50% more than December rate.

1-year-MCLR had decreased drastically only due to demonetisation. Hopefully we need not stand in long Queues every year. Mostly its once in lifetime event.

Instead of banks making profits due to demonetisation drive they should have passed on the benefits to the end customers.

Hope to see cut in the Margins in coming days. Happy home Loans.

This complex calculations and to understand what is long term profit & short term loss versus short term profit with long term loss is better to be left to the professionals. is best at this. We will wait for the margins to come down, then we would recommend the right change that would ensure you save the most on your home loans…

Happy Home Loaning…