SBI and ICICI Banks

A precise cut of 0.15 % in the rate for Home Loan up to Rs. 75 Lakhs is announced by SBI while ICICI has declared waive off on the loans owned by the people withdrawing salaries and holding account with it. For SBI, it’s the lowest level of interest rate the Bank ever offered in past six years. Certainly, an excellent offering by the bank.

As per the revised rate, the home loans will now be available at 9.15 per cent and that for women the same will be available at 9.10 per cent rate of interest from SBI. An individual can save Rs. 542 per month on the interest rate for up to Rs. 50 Lakh which makes up to Rs. 2 Lakh during the entire loan tenure of 30 years. The same person can save up to Rs.6 Lakh at the end of the tenure on same EMIs of Rs. 542 per month if investing in a recurring deposit.

The offering of private sector bank is little different from the SBI in a way that it has launched ‘ICICI Bank Home Overdraft’ for the ICICI account holders. Through this, ICICI offers Rs. 5 lakh to Rs. 1 Crore credit against properties owned by them which, in turn, delivers dual advantages – term loan and overdraft facility.

The term loan is for quick availability of funds for the urgent and immediate requirement, whereas overdraft facility is to have the access to the loaned amount whenever required, at any point of time for personal as well as other purpose. This allows utilising the amount for education, treatment, home or shop renovation, marriage and other such needs.

Overdraft facility provides the loan amount in bracket of Rs. 5 Lakhs to Rs. 1 Crore which can be used both as term loan and overdraft. To the minimum, 10 per cent of total loaned amount can be used as term loan, while 90 percent of the total loaned amount, to the maximum, can be used as overdraft. Interest rate on term loan will be as per the EMIs and for the overdraft amount, the same will be calculated upon the funds used and for the period it was used.

However, the recent decision on demonetisation of Rs. 500 and Rs. 1000 currency notes might also affect the home loan criteria and banks may reduce their rates further.