SBI Home Loan Processing Fee: SBI likely to charge processing fees on home loans, top-up plans

SBI Home Loan Processing Fee: India's largest lender State Bank of India (SBI) is likely to charge processing fees for home loans borrowers, top-up plans and corporate and builder loans. This development comes as the bank is facing a sharp dip in its interest income after the RBI lowered the repo rates.

According to TOI report, SBI, in an internal circular, has informed that the full waiver of the consolidated processing fee, which was to last through the festive period till December, has been withdrawn.

"The full waiver of consolidated processing fee" offered during the festival period for loan proposals sourced up to December 31, 2019 is withdrawn. "Waiver will continue for proposals sourced up to October 15, 2019," SBI said.

On July 1, 2019, SBI linked its lending rate to the benchmark repo rate. Before this, SBI was offering the lowest rate in the market. After the decision to link, the rates came down sharply, a source told TOI.

The processing fee would be nearby to 0.4 per cent, which on an average for individual borrowers would work out anywhere between Rs 10,000 and Rs 30,000 (minimum-maximum). For builders, a flat charge of Rs 5,000 has been reintroduced, a source told the paper.

SBI had launched software for automatically pegging home loans on July 1, 2019, to the dynamic moving rate that rolled back on August 1, 2019. On October 1, it rolled out another software which pegged loans to the RBI’s benchmark rate.

Other charges such as prepayment charges and Central Registry of Securitisation Asset Reconstruction and Security Interest registration fee are also likely to be increased later.

ALSO READ: SBI lowers rates on non-repo-linked loans by 10 bps

ALSO READ: SBI to adopt repo rate as external benchmark for all floating rate loans from Oct 1