Kotak Mahindra Bank and State Bank of India (SBI) have created a better offer in the department of home loans in an attempt to grab as many customers as they can. They have reduced interest rates up to 10 basis points (100 bps = 1 percentage point).
SBI has introduced home loans of up to Rs 75 lakh for 6.7% to women salaried borrowers which the cheapest rate offered yet. The company also relinquish processing fees on home loan applications. Kotak, on the other hand, announced home loans at the rate beginning from 6.55% for new purchases and balance transfers. This too is a record low rate.
Home loans direct the credit growth of banks as the lenders are expecting a jump in the previous month. Few of the schemes offered by state authorities such as relaxation on stamp duty, end in March. Although Kotak Bank has a lesser rate than SBI, it has a smaller distribution mark as against the country’s largest bank and is a smaller player in home loans.
SBI deputy MD (retail business) Saloni Narayan stated, “The earlier best rate was 6.8%, and now it is 6.7%. Earlier, there were three slabs, including one for loans up to Rs 30 lakh. Now we have one rate for loans up to Rs 75 lakh and another for larger loans.”
“A person with a credit score of 775 will get home loans at 6.8%. If they source the loan through Yono, there is a further 5bps discount. If the borrower is a woman, the rate will be a further 5bps lower at 6.7%,” she said. These rates are relevant to salaried borrowers and for non-salaried borrowers, there is a premium.
SBI announced its offer on the day it crossed the record of Rs 1-lakh-crore disbursement of home loans in FY21. The total home loan portfolio was Rs 5 lakh crore as of 31st January 2021. “We should end the year at Rs 5.12 lakh crore. Year on year we have grown 10%, and the number of loans disbursed month on month have increased with up to 1,300 proposals a day being processed,” Narayan continued.
The bank plans to increase the disbursement of home loans by decreasing the present turnaround time of five days where there is a builder tie-up, and also lessen the 12-day timeline for when there is no such tie-up.
“We are rolling out a retail loan management system next month and improving the strength of loan-sourcing teams,” said Narayan. She added that the bank was moving towards the omnichannel way to give out home loans by allowing customers the option to seek loans through missed calls, through branches, online or through representatives.