Mumbai:
State Bank of India, the country''s biggest lender, has reduced interest rates
on new loans for homes, automobiles and farm equipment beginning October 8, as
a festival season offer. SBI
also announced the launch of `SBI Reverse Mortgage Loan,'' a product which will
allow senior citizens to avail funds by mortgaging their residential property.
All branches of SBI would offer the product from 12 October the bank said in a
statement. Beginning
October 8, home loan rates for all new loans will go down by 0.50-1.0 percentage
point, while loans for cars and two-wheelers have been reduced by 1.00 percentage
point, SBI said. The
proposed rates are applicable for all new loans sanctioned on or after October
8 and are valid up to December 31, the statement added. SBI
home loans are now cheaper by 0.50-1 percentage point, depending on loan maturities
and amount of loan. The bank also gives discount if the salary account is with
the SBI and further discount if a higher margin is available. New
loans for cars and two-wheelers would come cheaper by around 1.00 percentage point
at 11-12 per cent, depending on the loan amount, maturity and type. SBI
personal loans are also now cheaper by 0.5-1.00 percentage point. Additionally,
the bank is also offering 50 per cent concession in processing charges on all
the personal segment loans. Senior
citizens above the age of 60 years who own and occupy a house can avail of reverse
mortgage loans, released in monthly or quarterly installments or as a lump sum
payment at the beginning, against the security of the house. The
loan will be given jointly if the spouse is alive, provided he or she is above
58 years of age, the bank said. During
their lifetime, the borrower does not have to pay the loan and will continue to
stay in the mortgaged house. Thereafter, either the legal heirs could repay the
loan and redeem the property or the bank will sell the property and liquidate
the loan, with the surplus, if any being passed on to the legal heirs. The
loan carries a fixed interest rate of 10.75 per cent per annum subject to reset
at the end of every five years along with revaluation of security and re-adjustment
of loan installments, if necessary. For
a loan of Rs1 lakh, the monthly payment to the borrower on a 10-year loan is Rs468
and on a 15-year loan it would be Rs225. Similarly
for a loan of Rs1 lakh, the quarterly payment to the borrower on a 10-year loan
is Rs1,423 and on a 15-year loan it would be Rs687, the bank said.
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