State-run banks offer cheaper home, auto loans for festival season
21 August 2019
State-run banks plans to expand the `psbloansin59minutes’ portal with retail products, including housing and auto loans, in order to expand retail loan business and bolster consumption.
Currently, the portal extends in-principle approval for loans of up to Rs1 crore to micro, small and medium enterprises (MSMEs) in less than an hour.
Lenders, including State Bank of India, Union Bank of India and Corporation Bank, have now decided to increase the loan amount eligible for instant approval under the portal to Rs5 crore.
SBI, the country's largest lender, on Tuesday announced a number of offers, including cheaper rates for home and auto loans, to support festival sales. It, however, did not specify the time period for which this festival offer would be valid.
SBI has offered to waive processing fees for home loans, while also offering pre-approved digital loans and loans with no escalation in interest rates spread across various categories.
"SBI has waived processing fees on car loans during festival season. The bank is offering lowest interest rate starting from 8.70 percent to customers opting for car loan, with no escalation in interest," it said.
No escalation will ensure that the customer will not have to face fluctuation in the interest rate.
For customers applying for a car loan online through the bank's digital platform like YONO or website, a 25-basis point concession on interest rate can be availed, it said.
Salaried customers can also avail loan to cover up to 90 per cent of the car's on-road price, it said.
Recently, SBI reduced marginal cost of funds-based lending rate (MCLR) by 15 bps, thereby reducing overall home loan interest rate by 35 bps since April 2019.
Currently, the bank offers home loan at 8.05 per cent, the lowest for any bank, as repo rate-linked home loan and this rate will be applicable to all existing and new loan from 1 September, it said.
SBI offers personal loan of up to Rs20 lakh at the lowest interest rate starting from 10.75 per cent with the longest repayment tenure of 6 years, reducing equated-monthly instalment (EMI) burden on the customers.
Salary account customers can also avail pre-approved digital loans up to Rs5 lakh through YONO.
Education loan would be available at an attractive interest rate of starting from 8.25 per cent for up to Rs50 lakh and up to Rs1.50 crore for studies in India and abroad, respectively.
Customers will be offered the longest repayment tenure of 15 years which effectively will reduce their EMI burden, it said.
Bank of India is planning to add some retail products to the portal for easier access to loan products while another state-owned lender Indian Overseas Bank (IOB) also plans to offer retail loan products on the portal.
The platform has helped in expediting loan disbursement while bringing ease in banking process, saving time for both bankers and customers.
The platform has been of great help to MSME customers as it reduced turnaround time for loan processes while also allowing choice of banks. Once the loan is approved, the amount is expected to be disbursed in 7-8 working days.
Touted as country’s largest online lending platform, the portal was launched by Prime Minister Narendra Modi in November 2018 with an aim to make credit access and banking for MSMEs transparent and hassle-free.
The portal has sanctioned loans worth over Rs35,000 crore in less than four months from its launch in November 2018. As of 31 March 2019, more than 50,706 proposals had got in-principle approval and 27,893 proposals had been sanctioned.