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SBI vs. HDFC Home Loan: Comparing Interest Rates and EMI for a ₹60 Lakh Loan

SBI vs. HDFC Home Loan: Comparing Interest Rates and EMI for a ₹60 Lakh Loan

A home loan is a long-term financial commitment. Therefore, it is essential to carefully assess your income, budget, repayment capacity, and other financial obligations before taking out a loan.

If you are planning to take a home loan of ₹60 lakh, it is important to know which bank will be more economical for you. Two of India's most trusted and largest banks - State Bank of India (SBI) and HDFC Bank - are currently offering attractive interest rates on home loans. However, there is a slight difference in the interest rates of both, and therefore, there is also a difference in the EMI and the total payment.

Slight difference in interest rates but a clear impact on EMI

The interest rate may seem small, but when the loan amount is ₹60 lakh and the tenure is 20 years, there can be a difference of lakhs in the EMI and interest. Understanding the current home loan offers of both banks becomes necessary for this reason.

SBI Home Loan: Offered at 7.50% interest

The country's largest public sector bank, State Bank of India, is currently offering a starting interest rate of 7.50 percent on home loans. At this rate, for a home loan of ₹60 lakh for a tenure of 20 years:

  • Monthly EMI: ₹48,336
  • Total interest payment: ₹56,00,542
  • Total payment (Principal + Interest): ₹1,16,00,542

The bank may charge a separate processing fee on this loan, which is determined based on the loan amount.

HDFC Bank Home Loan: Available at 7.90%

HDFC, a leading private sector bank, is currently offering home loans at an interest rate of 7.90 percent. If you take a loan of ₹60 lakh for 20 years on the same terms, then:

  • Monthly EMI: ₹49,814
  • Total interest payment: ₹59,55,273
  • Total payment (Principal + Interest): ₹1,19,55,273

Processing charges may also apply here, which depend on the bank's terms.

Difference in EMI and total payment between both banks

Comparing both banks, there is a difference of ₹1,478 in EMI, which will affect your pocket every month. As for the total payment, you have to pay ₹3,54,731 less by taking a loan from SBI compared to HDFC Bank. That is, even a small difference in interest rates can extract lakhs of rupees more from your pocket.

Include processing fees and other charges in the comparison

While taking a home loan, it is not enough to only pay attention to the interest rate. Sometimes, banks also add costs like processing fees, technical valuation charges, legal charges, and insurance. The processing charges are different in both HDFC and SBI banks. SBI sometimes offers discounts on processing fees, while HDFC charges a fixed fee in some schemes.

Difference between fixed versus floating rate

Both SBI and HDFC offer home loans based on floating rates, which fluctuate based on changes in the RBI's repo rate. In such a scenario, if the repo rate decreases, the EMI may decrease, and if it increases, the EMI will also increase.

Customer experience in SBI and HDFC

A home loan is not just a one-time deal, but a long financial relationship. In such a case, customer service, online facilities, prepayment terms, and transparency of the banks also become important factors. SBI branches are spread across the country, which helps people in small towns and cities. HDFC Bank, on the other hand, has a slight edge in digital facilities.

Bank interest rates may change over time

Interest rates change from time to time according to the market conditions, the RBI's monetary policy, and the banks' own policies. The rate today may increase or decrease in the future.

Therefore, before going for any home loan plan, it is necessary to understand all the terms and conditions from the bank and confirm the updated rate.

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