SBI’s home loan became 0.25% expensive: Now the interest rate will be between 7.50% to 8.70%, understand how much EMI will increase here

State Bank of India (SBI) has increased its home loan interest rates by 25 basis points, which will affect the new home loans. Now the interest rate of SBI’s home loan is between 7.50% to 8.70%.

However, this increase has been done on upper limit interest. The interest rate of SBI’s home loan was between 7.50% to 8.45% earlier. This means that if your credit score is slightly lower, you may have to pay more interest, which will increase your EMI.

Why did SBI increase interest rates? SBI has increased the upper interest rate of home loan from 8.45% to 8.70%. However, the lower limit ie 7.50% has not been replaced. This means that people who have good credit score can get a low interest rate as before. But if your credit score is low, then you have to pay more interest, which will increase your monthly EMI and total interest burden.

For example, if you take a home loan of 50 lakh rupees at 8.70% interest rate for 20 years, then your monthly EMI will be around Rs 44,026. In 20 years, you will pay a total of Rs 55.66 lakh as interest. If the interest rate was 8.45%, EMI would have been Rs 43,233. At the same time, interest would have to be paid 53.75 lakh rupees.

Bank took this step to save profits This decision of SBI has come when the Reserve Bank of India (RBI) has kept its repo rate stable at 5.55%. Usually interest rates decrease when the repo rate is low, but SBI takes the opposite step. Experts say that banks are doing this to save their profits, as the demand for home loans is increasing, but due to low interest rates, the margin of banks is decreasing.

Home loan interest rates of 5 public sector banks

Keep these 3 things in mind while taking a home loan

1. Take information about pre-payment penalty Many banks impose penalty on paying loan ahead of time. In such a situation, take full details about this from banks, because banks get less interest as expected when they pay the loan ahead of time. In such a situation, some term adams are put on their behalf. Therefore, while taking a home loan, get complete information about this.

2. Take care of your credit score Credit score reveals a person’s credit history. In terms of personal loan, banks definitely see the credit score of the applicant. Credit score is decided by several special credit profiles.

It is seen that you have taken a loan before or how the credit card etc. has been used. Any person’s credit score shows the ratio of history, credit use ratio, existing loans and timely payment of bills. The score is in the range of 300-900, but the score of 700 or more consider the score of 700 or more.

3. Take care of offers Banks continue to provide better offers to those taking loans from time to time. In such a situation, you should find out about the offers of all banks before taking a loan. Because taking a loan in a hurry can prove to be wrong for you. Check properly before taking a loan.

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