If you think of buying property in india home loans is a must. EMIs for home loans are spread over a 5 year to 15 year period and it reduces the financial burden on you. You can avail home loans from public sector banks like State Bank of India and Bank of India or from private sector banks like HDFC and ICICI. Private sector banks may have a higher rate of interest and processing charges but you get impeccable and prompt services. Public sector banks are not reputed for fast processing and it may take anything from a month to six months for the loan to go through. Of all public sector banks, sbi home loans are the most popular and SBI is an award winner in this respect.

SBI home loans come in different flavours. In brief these are explained below:

  • SBI Maxgain: This is a home loan disbursed as an overdraft, for a minimum of Rs. 5 lakhs with the added convenience of permitting operation of the home loan account like a savings or current account. It claims to minimize interest cost.
  • SBI Realty: This loan category allows you to buy a plot of land in order to build your house. You can avail up to Rs. 10 crores with a repayment schedule spread across 15 years and a loanee is requried to begin construction within 2 years of disbursal of the loan.
  • SBI Home Equity: In this sceheme the bank grants personal loan to home loan customers keeping their house as a security, subject to a good repayment record for at least one year. You need to maintain a savings account with SBI and the minimum loan is Rs. 50000 and maximum is Rs. 2 crores subject to interest rate of 1.25% above the base rate which is 10%.
  • NRI Home Loans: Non-resident Indians and PIOs can apply if they have a steady income and if they have stayed out of India for over 2 years and a minimum of Rs. 3 lakhs.
  • SBI Tribal Plus: This loan is targeted at tribals in hilly areas to let them buy or construct a new flat or an existing house or to carry out renovation. A maximum amount of Rs. 10 lakhs with a repayment schedule of 15 years is available against third party guarantee.
  • Gram Niwas: This loan category helps the poorest sections of society in rural areas get loans to build new houses or repair existing ones or for the purchase of a plot to build a house.
  • Sahyog Niwas: Again this is a rural home lone for self help groups for construction, renovation, purchase of a  plot or extensions.
  • SBI Green Home Loan: If you can prove your house is energy efficient and is “green”, you could get a rebate of 0.25% on the interest rate and 0% processing charges.

All is well on paper and in advertisements. But how does it work out if you approach public sector banks like SBI, especially for a smaller amount like Rs. 10 lakhs? Some applicants in this category were made to run from pillar to post and eventually went to other banks.

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