SBI Home Loan Processing Fees

State Bank of India’s housing finance competitive in the market and it come with various fees and charges, one such is the SBI home loan processing fee.

Types of SBI Home Loans and Their Processing Fees:

FAQs

1. What is the difference between a floating rate and a fixed rate of interest?

   In the floating interest case, the interest rate can increase or decrease due to market fluctuations, while in the fixed interest rate case, the interest rate remains the same is not affected by market conditions.

2. How is the home loan interest rate computed?

   Housing loan interest rates are computed by banks on daily/monthly/yearly reducing balance method. SBI calculates housing loan interest rate based on the daily reducing balance method. Details of the types of interest rate calculation are listed below:

   • Daily Reducing Method: In this type of calculation, the principal amount reduces from the day you pay the Equated Monthly Installment (EMI).
   • Monthly Reducing Method: Here, the principal amount reduces every month as you pay the EMI.
   • Annual Reducing Method: In this case, the principal amount reduces at the year-end and you continue to pay interest on the principal amount which you have already paid to the bank.
3. What are the SBI home loan prepayment charges?

   State Bank of India does not charge prepayment penalty on any of its housing loans to its customers.

4. What is a Pre-EMI on home loans?

   A pre-EMI is the interest amount you’ll have to pay on the loan amount being disbursed during the progress of the construction of your home. After the possession of the flat/house, the actual EMI payment commences.

5. Does SBI offer concessional home loan interest rates for women?

   SBI has a special scheme known as ‘HER’ Ghar designed exclusively for women applicants, under which there’s a concessional interest rate of 0.05% per year subject to the below two criteria:

   • Women should be one of the co-applicants or the sole applicant for housing finance.
   • Also, women should be a co-owner or sole owner of the property for which the loan is being availed.
6. What are the different types of documents required to apply for a home loan?

   Below are the documents required to be submitted:

   • Identity Proof: Aadhar Card, Voter ID, Driving License, PAN
   • Income Proof: For salaried individuals, the bank requires the latest 3 months' salary slips which reflects all deductions along with Form 16 for the last three years. As for non-salaried individuals, you’re required to submit IT returns for the last 2 years and the calculations of income for the past 2 years which should be certified by a Chartered Accountant.
7. What are the other charges that could be imposed when availing a home loan?

   There are other charges apart from the processing fee and interest rate. These are:

   • Pre-Payment Penalty: When you repay the outstanding loan amount ahead of the scheduled tenure, a penalty could be charged by banks. Currently, SBI does not charge prepayment charges on its housing finance schemes.
   • Miscellaneous Charges: Other miscellaneous charges include a legal fee for search time clearance and valuer’s charges towards the valuation of the property which is being financed by the bank.
8. What is the down payment required for a home loan?

   Banks and lenders usually fund 75% to 85% (maximum of 90%) of the total value of the property being purchased, while the remaining amount is paid by the borrower upfront. This upfront payment is known as a down payment.

9. What are the tax benefits of home loans?

   Under Section 80C of the Income Tax Act, you can claim tax deductions on the interest amount and the principal paid on the loan. While you can claim a maximum deduction of up to Rs.1.5 lakh on the principal amount being paid, it's up to Rs.2 lakh for the interest amount being paid. Additionally, you can claim a tax deduction for the stamp duty and registration charges which can be claimed only on the year the property is being registered.