SBI Home Loan is the most popular among borrowers. This is based on a study I conducted over the last six months. SBI Home Loan is the most often asked question on my blog. Even so, I always adopt a neutral stance and recommend SBI, ICICI Bank, or Axis Bank to new borrowers. I personally spoke with a number of borrowers to learn why they select SBI Home Loan. I’d like to share the experiences of blog readers with SBI Home Loan in this post. I’ve highlighted a few cons/problems faced by my blog readers near the end of the post so that future borrowers can make an informed decision. I always advise clients to speak with a few different Home Loan providers about their needs. A borrower may choose a Home Loan provider only after comparing 2-3 Home Loan Providers, depending on their needs.
SBI Home Loan is preferred by borrowers for a variety of reasons.
- Trust: The State Bank of India is the largest public sector bank in India, also known as the Government Bank. In India, human psychology dictates that government banks are more trustworthy and that if something goes wrong, the government will step in to save the bank. In a nutshell, the government bank will not fail. Even if the government bank fails, the government will bail it out. The best example is the government of India’s recent capital infusion into PSU banks to help them recover their financial health. State Bank of India, or SBI, is India’s most trusted banking brand, according to the 2015 Brand Trust Report. ICICI Bank is the only bank in India’s top 50 trusted brands, aside from SBI. The most important reason why borrowers pick SBI Home Loan is the trust factor. SBI branches have long lines, indicating that it is the most trusted bank.
- Lowest Interest Rate: You may rest assured that the SBI Home Loan Interest Rate will always be the lowest among all banks. One of the reasons is operational scale, or economies of scale. Second, SBI has access to low-cost financing due to its CASA ratio, which is among the best among all banks. Finally, in terms of House Loan Book Value, SBI is the top home loan provider. In reality, SBI is the market leader in setting the mortgage industry’s future orientation. If the interest rates on SBI House Loans are reduced, all other home loan providers will follow suit. The best illustration is the RBI’s reduction in the REPO Rate in January of this year. SBI was the first to lower the base rate, and others soon followed suit.
- Hidden Fees: Borrowers generally believe that SBI Home Loan is the most transparent of all. In brief, if you take out an SBI Home Loan, there are no hidden fees. Personally, I disagree, but it isn’t much you can do about customer perception. The TRUST factor is one of the causes for this favorable perception. In fact, among the top three home loan lenders, SBI charges the highest processing costs and other miscellaneous fees. The fundamental reason is that tiny players and other large private banks have received unfavourable word-of-mouth publicity. Processing fees are negotiable and subject to change.
- Legal Verification: SBI’s legal verification process is one of the best, in my opinion. Only after stringent and complete due investigation is an SBI Home Loan authorized. A bank’s self-interest is to keep nonperforming assets under control. If the project is approved by SBI, you can rest confident that any legal issues with the project would be minimal. At the same time, even if the project has been approved by SBI, I always advise my readers to get a Title Search Report. The reason for this is that project due diligence has been completed, but what about due diligence on your home or apartment?
I could go on and on about additional possible factors for the borrower’s selection for Best Home Loan. The seven criteria listed above, in my opinion, address the majority of the reasons. Please see the next part for a different perspective on the story based on the experiences of my blog’s readers.
