Home loan interest rates: While the interest rates of the lender bank are certainly important, one can clinch a lower rate in that band if one has a healthy credit score (CIBIL) of 750 and above.
One must not rush for taking a home loan from the nearest bank but should scout for the cheapest rate in the market. (Picture Credit: depositphotos)
Till the 1980s, it was common for a person to build a house, or buy a flat, when he/she was past 50 or close to or after retirement. The reason: one used to save money throughout his/her career and used it to buy a flat/plot of land to build a house.
The advent of home loans changed all that. With the reduction of interest rates in the current century, more and more young people began to buy a flat in their thirties, helping expand the market fast. Let’s see what 4 major banks – SBI (State Bank of India), PNB (Punjab National Bank), HDFC Bank and ICICI Bank – are offering now.
State Bank of India (SBI)
The interest rate on home loans in India’s biggest bank ranges from 8.50% to 9.65%. SBI charges 8.6% to 9.55% on Tribal Plus home loan, which is a loan especially designed for hilly and tribal areas. If you take a top-up home loan, the interest rate will range between 8.8% to 11.30%. The interest that the bank will charge will depend on a few factors, the foremost of which is the credit score of the individual.
Punjab National Bank (PNB)
The second largest PSU bank in India, Punjab National Bank (PNB) charges rates that vary between a low of 9.40% and 11.10%. One has to keep in mind that the interest rate charged depends on the credit score of the applicant, the amount of loan applied for and the tenure of repayment. If the credit score of the applicant is below 600 (CIBIL), 556 (CRIF), 668 (Experian) and 610 (Equifax), the application is likely to be rejected outright.
HDFC Bank home loans
The largest private sector lender in India, HDFC Bank, follows a formula of Policy Repo Rate + 2.90% to 3.45%, which works out to a rate between 9.40% and 9.95% on home loans. Credit score and repayment of any other loan by the applicant are important parameters for HDFC Bank.
ICICI Bank home loans
ICICI Bank charges a minimum of 8.5% interest on home loans up to Rs 5 crore. However, the exact rate will depend on quite a few factors such as credit score, tenure of repayment and amount bring borrowed.
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