March 24, 2014 2:36 pm
I am existing SBI home loan customer with my Home Loan email@example.com% but the for new customers SBI is offering 10.1%. Is there any chance where existing customer can avail these new rates?
Dear Pankaj, please keep it +150 as of now. In future take corrective action, if EMI increases too much.
I have got my interest rate reduced from 10.5 to 10.15% today.
Today I got to know that EMI is different than Scheduled Instruction (SI). EMI is less than SI as it might vary depending upon interest rate set by RBI/SBI. So bank make SI more than EMI so that in future if there is any interest rate increase it can be accommodated within same SI.
I was told to change my Scheduled Instruction (SI), so I have made it Rs 150 more than the current EMI. Is it enough? Shall I make it more?
Dear Pankaj, please go ahead.
I have contacted RACPC pune & asked them to reduce my interest rate from 10.5% to current 10.15%.
I am saving around Rs 1500/month in EMI. In tenure of 25 years I will be able to save arnd Rs 4L. Though I hv to pay a 1 time fee of Rs arnd Rs 30K.
Dear Namdeo, please contact your loan serving branch. As your loan amount is more than 30L Rs. the ROI for you ‘ll not be 10.15%.
Thanks for your inputs.
I have taken this SBI Home loan in last dec only…is there any kind of lockin period? If no, then this means I can get the rates converted to current rates of 10.1%?
I have tk loan of Rs 5490000 & current interest rate is 10.5%. Drawing power is 54,64,483. I have yet to get my possesion.
If I pay 056% i.e. 30K, i would be able to save arnd 4.5L on the whole.
Dear Nsabhayankar, your understanding is correct. The spread ‘ll decrease after paying the conversion fee.
Please correct me if I am wrong but the rate of interest (ROI) is applied as some percentage spread over the base rate. By paying a conversion fee, you get this spread from the base rate reduced.
So, even if there is no guarantee that the base rate will not change, the spread has reduced and you pay a lesser interest than with the original spread. This is true irrespective of whether and how the base rate changes.
Suppose, earlier you were charged interest at (base rate + 3)%. You pay the fee and the spread of 3% comes down to 1%. So, the new ROI is (base rate + 1)%. This effectively reduces your actual ROI by 2% compared with the earlier rate irrespective of change in the base rate.
(The numbers of 1% and 3% are just for illustration.)
is there some lock-in with this new interest rate of 10.1% ? what is the guarantee your interest will not be revised back to original one within few months of paying the conversion fees?
They might also have locked you down with SBI by forcing bundled insurance products making your decision to shift bank harder. Normal industry practice that all regulators are intentionally ignoring
Dear Pankaj, Yes. Please contact your loan serving branch and by paying a conversion fee of 0.56% on your outstanding drawing power, you can get the new ROI.
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