Home Loans

Purpose for which home loan can be availed: The loan will  be sanctioned for the purpose of purchase / construction / extension / repairs/renovation of new/second-hand residential house/flat/plot of land and furnishings (hereinafter referred to as the ‘project’).

Premium of Home Loan Insurance cover (Optional) : The premium for the optional Home Loan Life Insurance cover (if availed) will be added to the loan amount.

Loan to Value Ratio (LTV):

For loan amount upto Rs.20 Lacs, maximum permissible LTV ratio is 90% of the assessed value of the property. For loan amount greater than Rs.20 Lacs and upto Rs.75 Lacs, maximum permissible LTV ratio is 80%. A maximum permissible LTV ratio of 75% is applicable on a loan amount above Rs.75 Lacs.

Rate of Interest:

Floating Rate of Interest: –

Interest on the loan will be charged at prevailing floating rate of interest on a daily reducing balance at monthly rests. The rate of interest is subject to revision from time to time due to (i) changes in Base Rate or (ii) revision even without change in Base Rate the Bank has the option to reduce or increase the EMI or extend the repayment period or both consequent upon revision in interest rate.

Fixed Rate of Interest:- 

Interest on the loan will be charged at the prevailing fixed rate of interest on daily reducing balance at monthly rests, subject to interest rate reset at the end of every two years on the basis of fixed interest
rates  prevailing  then, the bank may  at  its  discretion  stipulate  the  periodicity  of computation of interest. Further, the bank may at its sole discretion alter the rate of interest suitably and prospectively in the event of major volatility in interest rates during the period of the agreement. Thenceforth the rate of interest varied as aforesaid shall be applicable to the Loan. the bank shall be the sole judge to determine whether such condition exists or not. If the Borrower is not agreeable to the revised interest rate so fixed, the Borrower can request the bank, within 15 days of receipt of the notice intimating
change in interest rates from the bank, to terminate the loan and the Borrower shall repay the Loan and any other amount due to the bank in full and final settlement in accordance with the provisions of the Agreement relating to pre-closure.

Calculation of interest:-

Interest on the amount of the loan will be applied at the prevailing rate per annum on daily reducing balance with monthly rests.

Intimation of change in Interest Rate:-

The borrower shall be deemed to have notice of changes in the rate of interest whenever there are changes in Base Rate or increase in interest rates where there is no change in Base Rate are either displayed on the Notice Board of the Branch or published in news papers or made through entries of the interest rate charged in the passbook/statement of account furnished to the borrower and the borrower is liable to pay such revised rate of interest.

Penal interest:-

In the event of a default in payment or any irregularity in the account, the Bank reserves the right to levy a higher rate of interest as it deems fit. Enhanced rate of interest @2% p.a on the irregular amount for
the period of irregularity, over and above the applicable rate will be charged if the Equated Monthly Installment (EMI) remains unpaid for a period of 30 days from the due date, for any reason, including a bounced cheque.

Bounced cheque/ECS or SI dishonours:-

A penalty of Rs 250/- will be charged for every bounced cheque/ECS or SI dishonours. The rate may vary from time to time.

Repayment:

The loan is to be repaid in Equated Monthly Installments over the tenure of the loan. The repayment installment commences from a date specified in the sanction letter.  The liability to the bank will be extinguished only when the outstanding in the loan account becomes Nil, on payment of residual amount, if any.

Loan Tenor:

Maximum 30 years (or) up to the age of 70 years (the age by which the loan should be fully repaid) of the borrower, whichever is early.

Pre-closure Charges:-

Loans on Fixed and Floating rate of interest:

No pre-payment/ Pre-closure penalty will be levied on Home Loans irrespective of the period for which the account has run or source of funds.

Security:

Primary:-

The loan will be secured by Equitable / Registered mortgage / extension of mortgage of the land and building/flat for which the loan is to be sanctioned.

Collateral:-

Liquid securities of adequate value in the form of Life Insurance policies, Government Promissory Notes, shares/ debentures, gold ornaments or such other tangible security as may be deemed appropriate, may be pledged by the customer in lieu of mortgage of the residential property financed by the Bank.

Interim Security Pending Mortgage:-

Wherever creation of mortgage is likely to be delayed for any valid reason, suitable security including third party guarantee, as considered necessary, may be taken for the interim period.

Utilisation of the loan:

The amount of the loan shall be utilized strictly for the purpose detailed in the borrower’s application form and in the manner prescribed.  The construction of the house/flat or the modification / extension proposed by the borrower in the existing house / flat should be strictly according to the plan approved by the Local Authorities / Town Planning and Development authorities.  Any modification desired in the plan  as originally approved, can be undertaken only after express sanction for it has been obtained from the appropriate authority.

Insurance:

The house/flat shall be insured comprehensively for the market value covering fire, flood, Earthquake etc. in the joint names of the Bank and the borrower. Cost of the same shall be borne by the borrower.

Inspection:

The Bank will have the right to inspect, at all reasonable times, the borrower’s property by an officer of the Bank or a qualified auditor or a technical expert as decided by the Bank and the cost thereof shall be borne by the customer.

Fees and charges:

Processing fee: Collected at the time of Documentation.

Loan Amount                                      Processing Fee

Upto Rs.25 Lac                                    0.25% of Loan Amount. Minimum Rs.1000/-

Above Rs.25 Lac and upto Rs.75 Lac    Rs.6500/-

Above Rs.75 Lac                                  Rs.10,000/-

2. Other Fee/Charges:

Reason                        Particulars                                              Fee Amount

Collected for          Legal Opinion & Search Report                Rs.

payment to

empanelled

Advocate/Valuer       Valuation Fee                                          Rs.

Collected for          Stamp Duty  (% of project cost)               %

Payment  to  State      Registration Charges (% of project

Govt                cost)                                                       %

Other Fee______________________          Rs.

Total                                                                                          Rs.

Fees paid to Bank’s empanelled advocate and valuer for their professional services will not be refunded even if the loan is not sanctioned for any reason

State Bank of India retains the right to alter any charges or fees from time to time or to introduce any new charges or fees, as it may deem appropriate, with due intimation to customer.

3. Conversion charges for switching loan from fixed to floating rate: : Option for switching loan from fixed to

floating rate is permissible on payment of 0.56% of the outstanding in the account.

Fees and Charges are subject to change from time to time at the sole discretion of the bank.

Disbursement:

The loan will be disbursed only on the following conditions:

1. All the security documents prescribed have been executed by borrower/co-applicant (s)/ guarantor/s
2. A valid mortgage (equitable or registered if equitable mortgage is not possible) has been created in favour

of the Bank as per the laws of the State.

3. Wherever creation of mortgage is likely to be delayed for any valid reason, suitable security including third

party guarantee, has been taken for the interim period.

4. The loan will be disbursed in stages where a loan for construction is desired or purchase is through

payment to seller in installments.

5. All necessary statutory compliance are in place.

The bank may disburse the quantum of loan in lump sum or in installments at its own discretion depending on the level of construction of the House/Flat as acceptable to the bank

The bank will disburse loan amount directly to the builder/seller/society as the case may be and as requested / specified/ directed by the customer to the bank at the time of each disbursement. The bank shall not be responsible / liable in any manner whatsoever for any delay by the customer in providing such request/ specification/ direction to the bank and the customer shall not claim any costs, charges and expenses in any relation to any non-disbursal by the bank due to any such delay by the customer.

The Bank reserves the right to collect any tax if levied by the State/Central Government and/or other Authorities in respect of this transaction.

Default:

In the event of default i.e. if the amount due is not paid by due date, the customer will be sent reminders from time to time for payment of any outstanding on his loan account, by post, fax, telephone, email, SMS messaging and/or through third parties appointed for collection purpose to remind, follow-up and collect dues. Any third party so appointed, shall adhere to the Indian Banks Association’s (IBA) code of conduct on debt collection.