The leading public sector bank and the largest home loan provider in the country, State Bank of India (SBI) has announced reducing processing charges on its home loans. Presently the bank charges 0.25% as a processing fees up to a maximum of Rs. 6,500 for loans upto Rs. 75 lakh and Rs. 10,000 above it. According to new rates, the bank would charge Rs. 1,000 flat irrespective of the loan amount.
Bank is also considering reducing the conversion fees, which is charged when an existing customer switches loan has also seen a reduction. Presently bank charges 1% of the outstanding amount if a borrower switches from a higher rate loan to the lower rate loan. For example if a customer borrowed Rs. 25 lakh and has paid Rs. 15 lakh and wants to switch, he/she will have to pay 1% of the remaining (Rs. 10 lakh) thaht is Rs. 10,000 as conversion fee.
The above schemes are only for a festive season, starting from September 1 2012 to September 30 2012. Earlier this month, the bank had reduced interest rates on home loans and auto loans.
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