SBI Reduced Processing Fee on Home Loans

India’s largest lender State Bank of India has reduced the processing fee on housing loans. The processing fee i.e., lender’s administrative costs which are charged from the time of loan application to the loan closed is reduced for higher loans. It is assumed that this reduction in loan processing charges could be followed by other banks in coming days.

SBI has slashed processing fee from Rs.20,000 to Rs.10,000 on home loans above Rs.75 lakh. Also for loans between Rs.30 lakh to Rs.75 lakh, the fee has been reduced to Rs.6,500 from Rs.10,000. However, the processing fee for the loan amount below Rs.30 lakh will be continued at 0.25 percent of the loan amount. The SBI officials noted that this new fee structure would be effective from January 11.

Last year, on 20th October, National Housing Bank (NHB) had directed all Housing Finance Companies (HFCs) to stop imposing a pre-payment penalty on home loan borrowers. Subsequently banks like SBI, Bank of Baroda, Bank of India, ICICI, and many more banks have followed suit.