Personal loans are not only the best source for funding any kind of emergency such as medical expense or urgent home repair, but also serve well for marriage, tuition fees, vacations, etc. These are also the only loans that do not require any kind of collaterals. All other advances require some kind of collateral, for example:
- Gold loans keep gold ornaments as security
- Advances against life insurance policies require policy as surety
- Home loans necessitate home/property as mortgage
- Similarly advances against mutual funds, shares, fixed and security deposit also require compulsory collateral
Having said this, the biggest drawback of these loans is the interest rates that are charged for them. Most private, co-operative and housing finance companies charge anywhere between 16%-28% per annum, while private sector banks provide these in the range of 14%-18% per annum. However, State bank of India (SBI), country’s top bank has come up with a game changing offer that provides personal loans to its existing borrowers at housing loan rates. Here are some of the key features of this innovative product from SBI –
Borrowers servicing their equated monthly installments (EMIs) on time can avail this offer
All existing customers of SBI who have been paying their home loan EMIs on time can get the personal loan at an interest rate of 10.15%. For women, this is even lower at 10.10%. The only thing that the borrowers need to do is to check their eligibility using the home loan eligibility calculator and if their income level fits the criteria, they can apply for this limited period offer. The processing of this will be faster as it doesn’t require many documents except for salary, identity and address proof.
Bonanza for customers with good track record
This new personal loan offer from SBI for its existing home loan mortgagors is nothing short of a bonanza. The interest rate offered is easily the lowest in this segment especially considering the fact that there are many banks in India that have still pegged their home loan rates in excess of 12%. The money availed through this ‘once in a decade offer’ can be utilized in several ways including:
- Home interior – the personal loan offers for home interiors in the market vary from 14% to 16%. In money terms, this translates to benefit in excess of 50 thousand rupees for a loan amount of 5 lakh rupees spread across 5 years.
- Down payment for second home – fund raised from this loan can also be utilized for financing the margin money for second home.
- Purchasing of new/used car – fund availed from this loan can also be utilized for buying new or used cars. The existing interest rate for new cars from SBI is 10.45%, for certified used cars up to tenure of 3 years it is 16.00% and above 3 years it’s 16.5%. The rate of interest for other used vehicles is in the range of 17.25% to 17.5%, which is much higher as compared to 10.15% offered by this personal loan product.