Tag: home loans

SBI waives processing fee on home loans till August-end, BFSI News, ET BFSI

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The country’s largest lender State Bank of India (SBI) on Saturday announced waiving processing fee on home loans till August-end. Currently, the processing fee on home loans is 0.40 per cent.

SBI said it is the bank’s limited period ‘Monsoon Dhamaka Offer‘, through which a home loan customer can gain substantially. The state-owned lender said the offer will help revive the consumer sentiments.

“There could not be a better time to buy a house, considering SBI home loan interest rates start at just 6.70 per cent,” SBI said in a release. The Monsoon Dhamaka Offer is for a limited period ending on 31st August 2021, SBI said.

“We believe this offer of processing fee waiver will facilitate and encourage home buyers to take decision with ease, as interest rate is at its historic low. We strive to be a banker to every Indian and thereby, be partners in nation-building,” C S Setty, MD (Retail & Digital Banking), SBI said.

There will be a concession of 5 bps (0.05 percentage) for home loans applied through the bank’s one-stop YONO App. Women borrowers will be eligible for concession of 0.05 percentage (5 basis points/bps) on the loan rate.



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Yes Bank, Indiabulls Housing Finance sign co-lending agreement

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Yes Bank and Indiabulls Housing Finance have entered into a co-lending agreement for home loans.

“The partnership aims at synergising capabilities to provide an efficient and seamless experience to retail home loan customers,” said a joint statement on Wednesday, adding that the Reserve Bank of India’s co-lending framework provides a collaboration tool to benefit from the low-cost funding model of a bank and the cost-efficient sourcing and servicing capabilities of a non-bank.

Rajan Pental, Global Head, Retail Banking, Yes Bank said, “The partnership is in line with Yes Bank’s strategy of expanding its retail franchise through a mix of organic and partnership-led origination models. The bank is looking forward to further build a profitable and quality home loan portfolio through this partnership.”

Home loans constitute about 10 per cent of Yes Bank’s retail banking assets as on June 30, 2021.

Gagan Banga, Vice Chairman and CEO, Indiabulls Housing Finance said, “We can now leverage Yes Bank’s deposit-led franchise and complement that with our technology-led distribution to provide efficient solutions around home loans to a wide gamut of customers across geographies, ticket-sizes and yield spectrum, to give us balance-sheet light growth and profitability.”

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LIC Housing Finance cuts interest rates to 6.66%

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LIC Housing Finance Ltd (LICHFL) has cut its home loan interest rate from 6.90 per cent to 6.66 per cent under a special limited period offer. This interest rate is applicable for home loans up to ₹50 lakh for salaried individuals. This is probably the lowest home loan interest currently being offered by any lender.

The housing finance company, in a statement, said new borrowers whose loans are getting sanctioned till August 31, 2021 will be eligible for the special offer provided the first disbursement is availed on or before September 30, 2021.

LICHFL said the rate of interest offered is linked to the borrower’s creditworthiness, as reflected by their CIBIL scores. “At 6.66 per cent, LIC Housing Finance Ltd has offered its lowest ever rate of interest on housing loans with a maximum tenure of 30 years,” the company said.

Also read: Centre’s big push to LIC’s mega IPO

MD and CEO Viswanatha Gowd added, “…Considering the impact of the pandemic, we wanted to offer an interest rate that would help in uplifting the overall sentiments and aid more individuals to fulfil their dream of owning their own house. “We hope that this reduction in home loan interest rate will further boost customer confidence and help in early revival of the sector.”

Currently, State Bank of India (SBI) offers home loans at interest rate starting from 6.70 per cent. Lenders such as HDFC and Kotak Mahindra Bank offer home loans at interest rates starting from 6.75 per cent. Kotak Mahindra Bank is quoting special interest rate of 6.65 per cent for balance transfers.

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SBI offers revamping of loan for personal segment borrowers

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State Bank of India (SBI) has announced offering restructuring of loans to its eligible personal segment borrowers who availed home loans, Xpress credit, education loans and auto loans before April 1, 2021.

According to the bank, the eligible borrowers may access the following link and opt for restructuring (under Resolution Framework 2.00).

The link: https://covid19restruct.sbi.co.in:8443/EMIRestruct/EMI_CustomerLogin.jsp

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SBI cuts minimum interest rate on home loans up to ₹30 lakh to 6.70 per cent

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State Bank of India (SBI) has cut the minimum interest rate at which its home loans up to ₹30 lakh will start from 6.95 per cent to 6.70 per cent.

The new interest rate is effective from May 1, 2021.

The home loan rate cut comes exactly a month after the bank hiked the minimum interest rate on home loans by 25 basis points (bps) from 6.70 per cent to 6.95 per cent.

For home loans above ₹30 lakh and up to ₹75 lakh, the interest rate will start at 6.95 per cent. For big-ticket home loans above ₹75 lakh, the interest rate will be 7.05 per cent, India’s largest bank said in a statement.

SBI said women borrowers will get a special concession of 5 basis points (bps). Further, a 5 bps concession is being offered as a digital incentive to customers applying for home loans via YONO digital banking platform. One basis point is equal to one-hundredth of a percentage point.

CS Setty, MD (Retail & Digital Banking) said, “The affordability for the consumer increases immensely with the present home loan interest rate offerings, which reduce the EMI (equated monthly installment) amounts substantially. I am sure these measures will give a fillip to the real estate industry too.”

SBI had hiked the minimum interest rate on home loans by 25 basis points (bps) from 6.70 per cent to 6.95 per cent with effect from April 1, 2021.

After SBI upped the minimum interest rate at which it will offer home loans last month, Kotak Mahindra Bank, in a statement issued on April 12, 2021, said it will continue its special interest rate on home loans of 6.65 per cent per annum.

“In the interest of consumers and on the back of strong demand trends, Kotak continues to offer possibly the lowest home loan interest rate in the market,” it said the statement, adding that the rate is applicable across all loan amounts.

“Both fresh home loan applicants and balance transfer cases are eligible for interest rates beginning at 6.65 per cent per annum. Interest rates are linked to borrowers’ credit score and the Loan to Value ratio,” Kotak Mahindra Bank further said.

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IIFL Finance expects 15% AUM loan growth in FY22

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The partial lockdowns imposed by few states due to Covid-19 may have some impact on the business, but Rajak claimed that nothing was visible on-ground yet. Representational Image

By Ankur Mishra

IIFL Finance expects loan assets under management (AUM) to grow by 15% in the financial year 2022 (FY22), CFO Rajesh Rajak told FE. The lender is finding comfort from loan growth due to improved collections in the recent months. Without specifying details, Rajak said collection efficiency had sustained the trend after good show till December 2020. The collection efficiency had improved to 98-100% in home loans, 85-90% in business loans, more than 100% in gold loans and the micro-finance segment till December 2020.

The partial lockdowns imposed by few states due to Covid-19 may have some impact on the business, but Rajak claimed that nothing was visible on-ground yet. “If there is an extreme situation, we will get affected like everyone else but the whole idea will be to get impacted lesser than the industry,” Rajak said.

Last week, rating agencies Crisil had revised its rating on company’s arm IIFL Home Finance to ‘stable’ from ‘negative’. “The current outlook back to ‘stable’ revision factors in the continuous improvement in collection efficiency (excluding foreclosures) resulting in the uptick in asset quality metrics being lower than previous expectations despite weak macroeconomic environment,” Crisil said. The outlook revision also factors in the improvement in fund raising of the company, the rating agency said. IIFL Finance had raised `670 crore from non-convertible debentures (NCDs) in March 2020. Earlier in March, another rating firm Fitch had affirmed IIFL Finance’s long-term issuer default rating (IDR) at ‘B+’ and removed it from rating watch negative (RWN). This reflects Fitch’s view of easing downside risk to the company’s credit profile due to less adverse economic and funding conditions, which we expect to be broadly sustained in the coming year, the rating firm said.

Analysts at Kotak Institutional Equities said the fourth quarter (Q4FY21) was a strong quarter for non-banking financial companies (NBFCs), with disbursements picking up sequentially across the board, driven by moratorium exit, pent-up and seasonally strong demand.

“While disbursements were strong, loan growth may be muted. Weak new business momentum in the first half of FY21 will likely drag loan growth for the next few quarters and bottom out sometime in FY22,” the Kotak Institutional Equities report said on Tuesday.

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Report, BFSI News, ET BFSI

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More women have resorted to unsecured personal loan borrowings rather than home loans or auto loans during the pandemic, a report said on Thursday. Personal loans, which are typically consumption loans borrowed without any security to meet expenses, have witnessed a 23 per cent year-on-year rise in the number of women borrowers in the first nine months of 2020-21 (FY21) till December, as against a 5 per cent growth in Home Loans segment, the report by CRIF High Mark, a credit information company, said.

The COVID-19 pandemic resulted in deeper financial issues in some households as the pandemic and the resultant lockdowns hurt financially.

The active loans to women borrowers stood at 6,482 in the personal loan segment, as against 4,354 home loans, while auto loans witnessed a 4 per cent de-growth to 1,818 women borrowers, the report released in the run-up to the women’s day said.

Women’s share in the overall personal loan and auto loan pie has increased by one percentage point to 16 per cent now, the report said, adding they constitute 29 per cent of the home loans market.

The company data said average ticket size of personal loans borrowed by men and women has reduced by 10 per cent and 5 per cent, respectively, over the past one year.

The average size of loan borrowed by women continues to be smaller than that borrowed by men, while the average auto loan size borrowed by women is 8 per cent higher than that borrowed by men.

The share of top five states in the personal loan portfolio outstanding for women has increased by 18 per cent over the previous year, and women borrowers from southern states have higher credit book size as compared to western and northern states, it said.

A total of 1.8 crore loans – split into 18 lakh auto loans, 15 lakh home loans and 1.5 crore personal loans – were given out in the first three quarters of 2020-21, it said, adding that this was 40 per cent lower than the 2.97 crore in the year-ago period.

In terms of the value of loans disbursed to women borrowers, public sector banks have had the largest share observed over the past four quarters, followed by NBFCs and private banks, it said.

Maximum loans are given to women in the age group 26-35 having a share of 40 per cent in the overall disbursements in the year 2020, it said, adding that 6.26 crore women borrowers have a credit history as of now.



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Home loans: Banks unleash rate war towards year-end

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Banks have unleashed a rate cut war in the home loan space on the last lap of the current financial year (FY) 2021 to bulk up their retail portfolio.

State Bank of India (SBI) was the first off the blocks, announcing on March 1 around noon that the minimum interest rate at which it will offer home loans will start at 6.70 per cent (against 6.80 per cent earlier) for a limited period — up to March-end 2021.

Late evening, Kotak Mahindra Bank (KMB) went one better, announcing that the lowest interest rate at which it will offer home loan will be 6.65 per cent (up to March-end 2021) against 6.75 per cent earlier.

Also read: Residential realty recovers on consolidation: ICRA

The move to pare home loan interest rate just for a month seems two-fold. Firstly, banks want to grow their topline due to year-end considerations. Secondly, they are probably signalling to prospective borrowers that home loan interest rates have bottomed out (could rise in the new FY) in the context of rising Government Security (G-Sec) yields.

The move by SBI and KMB could trigger a matching response from other lenders as they may not want to lose business to rivals.

“Banks want to increase their topline towards the year end. Normally, in February and March, they will be in campaign mode for promoting their products.

“Along with the home loan, there will be cross-sell of life insurance policy. If you take a car loan, insurance will come along with that,” said V Viswanathan, banking expert.

He said that banks will try to offset the effect of lower interest rate on home loans through cross-sell of life insurance, which is tacked to the loan.

Moreover, sanctioning loans towards the year end will also help banks to do part-disbursal in the first half of next FY, which is typically a lean season, in respect of stage-based release of installments.

“With low interest rates and various income tax exemptions available on home loans, there will be many people who will want to take a home loan,” said Viswanathan.

That interest rates could be headed north could be gauged from the jump in the yield on the benchmark 10-year G-Sec (carrying 5.85 per cent coupon). The yield on this G-Sec has risen about 33 basis points since January-end 2021.

Ravi Prakash Jaiswal, General Manager, Canara Bank, said: “The outlook for home loans is very good. In the wake of the pandemic, work from home has gained ground. People who were earlier advocating rental housing are now going for their own house.

“And people having their own house are going for bigger house. So, they are disposing off/ renting out their smaller house and going for bigger house.”

Canara Bank kick-started a mega retail expo across the country from February 22 to March 16, 2021 to grow its retail loans such as home, vehicle and education loans.

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SBI lowers home loan rates to 6.70%

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State Bank of India (SBI) has lowered the minimum interest rate at which it will offer home loans from 6.80 per cent to 6.70 per cent for a limited period up to March 31, 2021.

India’s largest bank, in a statement, said its home loan interest rates start at 6.70 per cent for loans up to ₹75 lakh and 6.75 per cent for loans in the range of ₹75 lakh to ₹5 crore.

The lender is continuing with 100 per cent waiver on processing fees.

The bank said, overall, it is offering concession of up to 70 basis points based on loan amount and credit score. This also includes concession of 5 basis points each for women borrowers and digital sourcing through the YONO app.

Saloni Narayan, Deputy Managing Director (Retail Business), SBI, said, the reduced interest rates are one of the best in home loans.

Last month, the bank said it expects to double its home loan portfolio in the next five years to ₹10 lakh crore on the back of higher economic growth and growing preference of the new generation to buy a home early.

India’s largest bank took about 10 years to grow its home loan portfolio from ₹89,000 crore in FY11 to touch the ₹5-lakh crore mark now, according to Chairman Dinesh Kumar Khara.

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“SBI to offer home loans starting from 6.80% against 6.90% earlier”

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State Bank of India (SBI) has cut the minimum interest rate at which it will offer home loans up to ₹30 lakh to 6.80 per cent from 6.90 per cent. Further, for home loans above ₹30 lakh, the minimum interest rate has been pared to 6.95 per cent from 7 per cent.

India’s largest bank said it now provides higher interest concession based on the loan amount, the borrowers’ creditworthiness, and the property’s location. The bank also announced a 100 per cent waiver on processing fees. 

SBI, in a statement, said five bps interest rate concession each is available on home loans to women borrowers and those opting for a balance transfer.

Also read: SBI delivers on earnings in Q2, but warns of bad loans ahead

Further, customers applying for home loans via YONO App / https://homeloans.sbi / www.sbiloansin59minutes.com will get additional interest concession of 5 bps.

“Home loan interest rates are linked to CIBIL score and start from 6.80 per cent for loans up to ₹30 lakh and 6.95 per cent for loans above ₹30 lakhs.

“Interest concessions up to 30 bps is also available in 8 metro cities for loans up to ₹5 crore,” India’s largest bank said in a statement. Concessions to prospective home loan customers are available up to March 2021, it added.

CS Setty, MD (Retail & Digital Banking), SBI said “With the nation all geared up to move ahead post-pandemic, SBI would continue to support the home buyers and the Real Estate Sector.

“Further, our eligible existing home loan borrowers can also avail a paperless pre-approved Top-up home loan through the YONO App in just a few clicks. ”

Meanwhile, Saraswat Co-operative Bank, India’s largest urban co-operative bank, in a statement, said it is offering retail loans such as home loans (at 7 per cent interest, no processing fee); car loan (at 8 per cent, with 100 per cent finance and free FASTag), and gold loan (at 8.50 per cent, no processing fee) at lower rates up to March-end 2021.

 

 

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