Sbi

Housing Loan in SBI, Bellary.
HOME LOAN IN SBI

Introduction
Owing a piece of land or property is a lifetime dream for every individual. There are many Home Loans provider in the market to make your dream come true. But before opt for any home loan provider, need to consider certain factors related to property that interested in buying and also about the salient and also study some home loans in applying a home loan in India. Purchasing and moving into a dream home would generally rank among the top three things on the wish list of most people. A few decades ago finding a bank for financing Home Loan was not so easy. But now taking Home Loan has become very simpler. The RBI has been regularly stashing interest rates, with the result that Home finance loans that came at an interest rate of 16.5% to 18% four years ago are now available at 11.5% to 13% or lower. Each year the finance ministers generosity during the budget seems to be slowly concentrated for the Home sector and construction sector. In their quest for attracting more and more customer for Home Loans most of the banks have sanctioned loans without taking applicants capacity to repay loan into consideration. The result: banks have to initiate legal process under securitization act. To avoiding legal complication a few private banks have embarked on to create awareness among the prospective application for Housing Loans.
Sree Guru Thipperudra College, Bellary.
Title of the study:

I have undertaken this project entitled A study on Home Loans in State Bank of India, Main Branch, Bellary.
Scope of stud
The fact that finance is the life blood of the every home finance companys and it lies in the effective management to finance in organization. It is the largest source of mobilization of the resources makes it crucial that the funds are used effectively. This study helps to assess the effectiveness of the home loan system and the process of loan. And also assessing safeguarding of the interest of the both parties.
Objectives of the study

To study the home loan practices in state bank of India To study the home finance with reference to evaluating the process of loan in state bank of India. To know the various schemes and types of home loans To know the benefits of state bank of India home loans
Methodology of study
The value of any systematic and scientific research lies in its methodology giving a clear idea of the forms of the study and procedure adopted in conducting it and stating the purpose becomes essentials part of every study. Both primary and secondary sources of data are employed in this project report.
Primary data
Primary data is collected through interaction with the official at state bank of India Primary data were collected by will prepared questionnaire by the respondents
Secondary data Bank profile were made use

Through newspapers and magazines Through internet
Limitation of the study

The study was based on interaction with the officials at state bank of India main branch, Bellary. The study was based on available information and documents. Due to time limitation in depth study has not been carried in relating to few areas. The study not based on the questionnaire.
POFILE OF THE REGION
Bellary district takes its name from the word Balari which refers to goddess Durugamma as this goddess had marijested herself in the town. Some of the events in the great epic Ramayana are related to this historical place. It is said that Rama while searching for Sita met Sugreeva and Hanuman at a place which is very near to Hampi, the celebrated capital of Vijayanagara kingdom. The history speaks volumes about significant role it acquired during Satavahanas, Kadambas, Chalukyas of Kalyana, Kalachuryas, Sevunas and Hoysalas period. There upon the Vijayanagara rulers built the City of Victory on the bank of Tungabhadra River at Hampi in Hospet Taluk. This area which had witnessed the prosperity to its peak fell into political turmoil after the fall of Vijayanagara in 1565. This district was transferred to the erstwhile Mysore State on 1st October 1953 from Madras State. With the re-organization of the districts during 1997, the number of taluks is reduced to 7. The Harapanahalli taluk has been transferred to Davanagere district. Bellary district is spread from South-West to north East and is situated on the eastern side of Karnataka State. The district is situated between 14o 30 and
Sree Guru Thipperudra College, Bellary. 4
15o50 north latitude and 75o 40 and 77o 11 east longitude. This district is bounded by Raichur district on the north by Dharwad district on the west, Chitradurga and Davangere districts on the south and Anantapur, Kurnool districts of Andhra Pradesh on east. It comes under the administrative control of Gulbarga division and development jurisdiction of H.K.D.B, Gulbarga. As per 1991 census the population of the district stood at 16.53 lakhs. The geographical area is 8447 sq.km. It has 2 revenue sub divisions viz., Bellary SubDivision and Hospet Sub-Division which have in all seven taluks. The Bellary SubDivision has 3 taluks while there are five taluks in Hospet Sub-Division. There are 27 hoblies, two CMCs one Town Municipality, seven Town Panchayat 542 Revenue villages, 436 Thandas/habitations. The rural populations constitute 70%. The density of population is 196 per sq.km which is much lower than the State average of 235 per sq.km. The major occupation of this district is agriculture and 75 p.c. total labour forces are dependent on agriculture for its livelihood. The important crops grown are Cotton, Jowar, Groundnut, Paddy, Sunflower and Cereals. The net irrigated area is 37 p.c. to the net area sown. The pattern of land utilization in the district is as under (1997-98): Sl.No 1. 2. 3. 4. 5. Land classification Forest Land not available for cultivation Other un-cultivated land Fallow Land Area sown (net) Area (in hectares) 97,017 1,21,972 33,875 62,982 4,97,346 61.2 Percentage total area 11.9 15.0 4.2 7.7
Total
8,13,192
100.00
The main source of irrigation is Tungabhadra Dam. The Canal network accounts for 64 % of irrigated area. The important rivers are Tungabhadra, Hagari and Chikkahagari. The western taluks of the district are dogged with scarcity conditions with the failure of rains during successive years. However during the current year and preceding year heavy rains have created havoc in the district leaving many in lurch. Bellary district is rich in natural resources which need to be tapped to a great extent for overall development of the district. It has both metallic and nonmetallic minerals. The metallic minerals include Iron ore, Manganese Ore, Red oxide, Gold, Copper and Lead. The non-metallic minerals include Andalusite, Asbestos, Corundum, Chay, Dolomite, Limestone, and Limekankan, Moulding sand, quartz, soap stone, granite and red ochre. The metallic minerals are abundant is only three taluks viz., Sandur, Hospet and Bellary in the order of mining activity intensity. There are 23 units of large and medium scale industries in this district with an investment of Rs.447.76 crores employing around 9,222 persons. At present it occupies ninth place in the state. However with the commissioning of Jindal Vijayanagar Steel Limited at Sandur the industry scenario of this district will be undergoing sea changes. It is understood that Mukund Steels and Kalyani Steels have plans to start industries in this area. The inflow of investment into these industries would be around Rs.30, 000 Crores.
HUMAN DEVELOPMENT
Bellary is one of the most backward districts of the State. In terms of the Human Development Index it is at 17th place among the earlier configuration of 20 districts. Its HDI is 0.429 as compared to State HDI of 0.470.
LITERACY:
Education is the passport to accelerated economic growth. It is the key to building human capital and human capital is the vital ingredient in building a nation. The GOK spends 32% of SDP on education. In Bellary District 42% of Plan and non-plan expenditure is incurred towards salary component alone. Apart from this, expenditure is also incurred towards building up of infrastructure facilities in educational institutions
PER CAPITA INCOME:

Per capita income in the district is much lower than the per capita income in the state as evinced from the following figures: Reference Current Prices (1995-96) Constant Prices (1980-81) Bellary Rs 8544 Rs 2143 Karnataka Rs 9384 Rs 2551
Bellary district stands at 7th place in Income Index among 20 erstwhile districts in the State but stands at 17th place in HDI which clearly indicate that whatever income generated is not converted into welfare of the people.
INFRASTRUCTURE:
Roads indicate civilization of a nation. They are means to prosperity, progress and well being of any country. Rural roads may be defined as those roads which connects villages. During 5th five year plan constructions of road was made a component of minimum needs programme. The working group on road for 9th five
year plan has estimated that an amount of Rs.14040/- crores would be required for the construction of rural roads to cover 85% of village population. However Rs.10540 Crores has been proposed for the 9th plan.
HOUSING
The Govt. of Karnataka has been implementing various rural development programmes in order to improve the living conditions of rural folk. There is a substantial increase in the outlay for these programmes in eighth and ninth five year plans. Shelter for all" appears to be a distant dream because of its colossal dimensions with a huge backlog over the period and rapidly growing population. Shelter is an indication of an individuals existence, dignity and security. It is estimated that housing shortage is more than 410 lakh units out of which shortage in rural areas is more than 265 lakh units. Besides 125 lakh rural houses need up gradation to make them livable. The National Housing Policy of 1994 clearly envisages the difference between rural and urban housing. houseless households in the district. As per survey conducted during 1994-95, there were 59607 sites less households and 45776
POWER:
At present there are three power generating stations in this region viz, The Hampi Power House The Tungabhadra Right Band Power House The Munirabad Power House The installed capacity of the above power stations is 99 Megawatts. The Jindal Vijayanagara Steel Limited Power Generating Plant is expected to be commissioned shortly with an installed capacity of 260 MW out of which 130 MW is likely to be available for other users. The Government of Karnataka has approved setting-up of a Thermal Power Plant of 500 MW capacities near
Kuduthini by the KPCL at an estimated cost of Rs.2, 000 crores. This project construction is likely to be started during 2000-2001.
INDUSTRY PROFILE
Home loans are usually the largest loans that consumers will ever make. Because of this, it is important to know how home loans started, the different types of home loans and the similarities and differences between them. In this way, consumers can make the best decision on which loan is the best for their purposes. For many years, the only way in which to obtain money to purchase a home was to apply for a conventional home loan. This type of loan was obtained through a bank, credit union or other private, non-government-affiliated financial institution.
History of Home Loans

In 1938, the Federal National Mortgage Association, better known as "Fannie Mae," was created and established as a federal agency by then-President Franklin Roosevelt as part of his New Deal. It made it possible, even during a time when most people were out of work and had little, if any, income to still be able to afford a home. In 1970, the Federal Home Loan Mortgage Corporation, known as "Freddie Mac," was created to lessen the "monopolization" of home lending that it was felt that Fannie Mae enjoyed. Both Fannie Mae and Freddie Mac were at one time considered "government" auspices, but now are considered private establishments.
Help for Veterans

World War II came along and hundreds of citizens went to war. When it ended, they returned home to pick up their lives where they had left off, or to start a life. These people needed places to live, so the Serviceman's Readjustment Act of 1944, Public Law 78-346, was enacted. This made it possible for veterans borrow money for the purchase or building of a home. Several major changes in the Act have been made in the years since 1944, allowing veterans of subsequent wars, such as Korea, Vietnam and, most recently, the Gulf wars, to have the same advantages in obtaining home loans.
Home Loans scenario in India

The Home loan sector in India is the pi-vital role player in the growth of the real estate scenario in India. With tax incentives given to the housing finance sector in the annual budget of 2001, transactions related to buying and selling of residential properties increased considerably and was much higher as compared to previous years. Since the new class of buyers are relatively younger set of customers who are more aware about legal documentation and approvals, buyers are now more 'end-users' rather than investors; the property market in India undergoes transformation to align itself with global standards with an increased emphasis on quality & cost control and documentation methods. In the current economy of India, the real estate sector has the maximum propensity to generate income and demand for materials, equipment and services. It can be said that housing finance companies were formed for co-existing with buyer's requirements of housing loans for investing in properties. Home loans are made available by financial institutions to both Indian and NRI customers at floating and fixed rate of interest and also at attractive EMI options.
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For construction or buying a new home For home repairs and renovations For purchase of plots Against mortgage of property No tax benefits are available for NRI customers unless you file returns and thereby become eligible to avail of the tax benefits. Earlier the home loan sector in India was solely dependent on nationalized and public sector banks, but the entry of public sector banks into the housing finance business marked the beginning of the first round of interest rate cuts. And this reduction in interest rates has enhanced the borrowing power of customers. Moreover, HFCs are offering incentives to attract investors like some companies sanction the housing loan without requiring you to identify property as a pre-requisite for eligibility. Free accident insurance & property insurance. Waiving of pre-payment penalty. Waiving of processing fee. Waiving of processing fee There are a few documents which the finance companies require for setting up criteria for eligibility of Home loans.
Salaried Employee deductions Form 16 (showing tax deducted at source by employer) Proof of age (birth certificate/voter identity card/passport/school-leaving certificate/valid driving license
Sree of residence (phone Proof Guru Thipperudra College, Bellary.
Self-employed years, certified by a Chartered Accountant Profit & Loss Account and Balance Sheet for the previous two years, certified by a Chartered Accountant Proof of age (birth certificate/voter identity card/passport/school-leaving certificate/valid driving license)
11 Proof of residence (phone bill/electricity
The latest salary slip showing statutory Computation of income for the previous two
bill/electricity bill/ration card).
bill/ration card).
The realty boom in India has given a new dimension to the finance sector in India -both in Home Loans and Home Insurance segments. This has not only given a competitive edge to the finance companies to provide attractive options to customers but has also contributed to the increased investments in the real estate sector. This has resulted in 13 new institutions foraying into the housing finance business in the last three years.
Major Home Loan Providers

Banks & Public Sector Housing Finance Companies State Bank of India, Corporation Bank, Punjab National Bank, Central Bank, Dena Bank, Allahabad Bank, Bank of Maharashtra, Bank of Baroda Housing Finance, Can Fin Homes, GIC Housing Finance, LIC Housing Finance, PNB Housing Finance, SBI Home Finance, Cent bank Home Finance, HUDCO, LIC, etc. Financial Institutions HDFC, ICICI Ltd, Citibank, HSBC, Standard Chartered- Grind lays, IDBI Bank, etc
COMPANY PROFILE
EVOLUTION OF SBI
The origin of the State Bank of India goes back to the first decade of the nineteenth century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. Three years later the bank received its charter and was re-designed as the Bank of Bengal (2 January 1809). A unique institution, it was the first joint-stock bank of British India sponsored by the Government of Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July 1843) followed the Bank of Bengal. These three banks remained at the apex of modern banking in India till their amalgamation as the Imperial Bank of India on 27 January 1921. Primarily Anglo-Indian creations, the three presidency banks came into existence either as a result of the compulsions of imperial finance or by the felt needs of local European commerce and were not imposed from outside in an arbitrary manner to modernize India's economy. Their evolution was, however, shaped by ideas culled from similar developments in Europe and England, and was influenced by changes occurring in the structure of both the local trading environment and those in the relations of the Indian economy to the economy of Europe and the global economic framework.
Bank of Bengal H.O.
Establishment:
The establishment of the Bank of Bengal marked the advent of limited liability,
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joint-stock banking in India. So was the associated innovation in banking, viz. the decision to allow the Bank of Bengal to issue notes, which would be accepted for payment of public revenues within a restricted geographical area. This right of note issue was very valuable not only for the Bank of Bengal but also its two siblings, the Banks of Bombay and Madras. It meant an accretion to the capital of the banks, a capital on which the proprietors did not have to pay any interest. The concept of deposit banking was also an innovation because the practice of accepting money for safekeeping (and in some cases, even investment on behalf of the clients) by the indigenous bankers had not spread as a general habit in most parts of India. But, for a long time, and especially up to the time that the three presidency banks had a right of note issue, bank notes and government balances made up the bulk of the invisible resources of the banks. The three banks were governed by royal charters, which were revised from time to time. Each charter provided for a share capital, four-fifth of which were privately subscribed and the rest owned by the provincial government. The members of the board of directors, which managed the affairs of each bank, were mostly proprietary directors representing the large European managing agency houses in India. The rest were government nominees, invariably civil servants, one of whom was elected as the president of the board.
Business
The business of the banks was initially confined to discounting of bills of exchange or other negotiable private securities, keeping cash accounts and receiving deposits and issuing and circulating cash notes. Loans were restricted to Rs.one lakh and the period of accommodation confined to three months only. The security for such loans was public securities, commonly called Company's Paper, bullion, treasure, plate, jewels, or goods 'not of a perishable nature' and no interest could be charged beyond a rate of twelve per cent. Loans against goods like opium, indigo,
salt woolens, cotton, cotton piece goods, mule twist and silk goods were also granted but such finance by way of cash credits gained momentum only from the third decade of the nineteenth century. The main function of the banks, as far as the government was concerned, was to help the latter raise loans from time to time and also provide a degree of stability to the prices of government securities.
Major change in the conditions

A major change in the conditions of operation of the Banks of Bengal, Bombay and Madras occurred after 1860. With the passing of the Paper Currency Act of 1861, the right of note issue of the presidency banks was abolished and the Government of India assumed from 1 March 1862 the sole power of issuing paper currency within British India. The task of management and circulation of the new currency notes was conferred on the presidency banks and the Government undertook to transfer the Treasury balances to the banks at places where the banks would open branches. None of the three banks had till then any branches (except the sole attempt and that too a short-lived one by the Bank of Bengal at Mirzapore in 1839) although the charters had given them such authority. But as soon as the three presidency bands were assured of the free use of government Treasury balances at places where they would open branches, they embarked on branch expansion at a rapid pace. By 1876, the branches, agencies and sub agencies of the three presidency banks covered most of the major parts and many of the inland trade centers in India. While the Bank of Bengal had eighteen branches including its head office, seasonal branches and sub agencies, the Banks of Bombay and Madras had fifteen each
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Bank of Madras Note Dated 1861 for Rs.10
Presidency Banks of Bengal

The presidency Banks of Bengal, Bombay and Madras with their 70 branches was merged in 1921 to form the Imperial Bank of India. The triad had been transformed into a monolith and a giant among Indian commercial banks had emerged. The new bank took on the triple role of a commercial bank, a banker's bank and a banker to the government. The establishment of the Reserve Bank of India as the central bank of the country in 1935 ended the quasi-central banking role of the Imperial Bank. The latter ceased to be bankers to the Government of India and instead became agent of the Reserve Bank for the transaction of government business at centers at which the central bank was not established. But it continued to maintain currency chests and small coin depots and operate the remittance facilities scheme for other banks and the public on terms stipulated by the Reserve Bank. The establishment of the Reserve Bank simultaneously saw important amendments being made to the constitution of the Imperial Bank converting it into a purely commercial bank. The earlier restrictions on its business were removed and the bank was permitted to undertake foreign exchange business and executor and trustee business for the first time.
Imperial Bank
The Imperial Bank during the three and a half decades of its existence recorded an impressive growth in terms of offices, reserves, deposits, investments and advances, the increases in some cases amounting to more than six-fold. The financial status and security inherited from its forerunners no doubt provided a firm and durable platform. But the lofty traditions of banking which the Imperial Bank consistently maintained and the high standard of integrity it observed in its operations inspired confidence in its depositors that no other bank in India could perhaps then equal. All these enabled the Imperial Bank to acquire a pre-eminent position in the Indian banking industry and also secure a vital place in the country's economic life.
Stamp of Imperial Bank of India When India attained freedom, the Imperial Bank had a capital base (including reserves) of Rs.11.85 crores, deposits and advances of Rs.275.14 crores and Rs.72.94 crores respectively and a network of 172 branches and more than 200 sub offices extending all over the country.
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Branches
The corporate center of SBI is located in Mumbai. In order to cater to different functions, there are several other establishments in and outside Mumbai, apart from the corporate center. The bank boasts of having as many as 14 local head offices and 57 Zonal Offices, located at major cities throughout India. It is recorded that SBI has about 10000 branches, well networked to cater to its customers throughout India.
Subsidiaries
The State Bank Group includes a network of eight banking subsidiaries and several non-banking subsidiaries. Through the establishments, it offers various services including merchant banking services, fund management, factoring services, primary dealership in government securities, credit cards and insurance. The eight banking subsidiaries are: State Bank of Bikaner and Jaipur (SBBJ) State Bank of Hyderabad (SBH) State Bank of India (SBI) State Bank of Indore (SBIR) State Bank of Mysore (SBM) State Bank of Patiala (SBP) State Bank of Saurashtra (SBS) State Bank of Travancore (SBT)
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BOARD OF DIRECTORS List of Directors on the Central Board of State Bank of India
Sr. No. 1 2 Name of Director Shri O. P. Bhatt Shri R. Sridharan Designation Chairman Managing Director
Dr. Ashok Jhunjhunwala
Director
Shri Dileep C. Choksi
Director
5 6
Shri S. Venkatachalam Shri D. Sundaram
Director Director
7 8 9 10 11
Shri. G. D. Nadaf Dr. (Mrs.) Vasantha Bharucha Dr. Rajiv Kumar Shri Ashok Chawla Smt. Shyamala Gopinath
Officer Employee Director Director Director Director Director
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Products and Services

Personal Banking SBI Term Deposits SBI Loan For Pensioners SBI Recurring Deposits Loan Against Mortgage Of Property SBI Housing Loan Loan Against Shares & Debentures SBI Car Loan Rent Plus Scheme SBI Educational Loan Medi-Plus Scheme Other Services Agriculture/Rural Banking NRI Services ATM Services Demat Services Corporate Banking Internet Banking Mobile Banking International Banking Safe Deposit Locker RBIEFT E-Pay E-Rail SBI Vishwa Yatra Foreign Travel Card Broking Services Gift Chequ
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Branch profile
Name of the branch Category of the branch No. of divisions Bellary SCALE IV Two personal banking division Date of opening the branch Migration of CBS Date of last inspection Inspection ratings development banking division 18-3-1918 24-05-2006 17-12-2009 Branch; A (801 marks) PBD; A (825 marks) Technology up gradation DBD; A (810 marks) E-realization, CMP, ATM, Interest banking, OLTAS, NEFTRTGFs, Mobile banking and SBI connect.
Brief history of the branch

Branch was opened on 22-8-1865 as second inland branch of the bank of Madras. During the initial years, the branch primarily discounted nuisance bills is connection with movement of AGL produce. The business of the branch declined during last quarter of the 19th century and profits were difficult to come by. The directors decided to close Bellary branch on 15-7-1901 as the branch was no longer remunerative. Bellary branch was reopened on 18-3-1918 as an Imperial Bank. Present location: station road, bellary583101. The branch is housed in spacious own building. In the same campus our two branches are situated viz commercial branch and Bellary ADB.
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CONCEPTUAL FRAME WORK OF HOME LOANS Meaning of loan

An arrangement in which a lender gives money or property to a borrower, and the borrower agrees to return the property or repay the money, usually along with interest, at some future point(s) in time. Usually, there is a predetermined time for repaying a loan, and generally the lender has to bear the risk that the borrower may not repay a loan (though modern capital markets have developed many ways of managing this risk).
Meaning of Home Loan

Home loans allow borrowers to purchase a new home. A home loan, or mortgage, is a secured loan that borrowers obtain in order to purchase a home. Because a home is the largest purchase many individuals will ever make most borrowers utilize home loan to assist with their home purchase.
Types of Home Loans

There are different kinds of home loans are available in the market with different schemes to meet customers needs. They are: 1. Home purchase loans 2. Home improvement loans 3. Home construction loans 4. Home extension loans 5. Home equity loans 6. Land purchase loans 7. Mortgage loans
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1. Home purchase loans These are the basic forms of home loans used for purchasing f a new home. But sorting out the best rate can at times, seem confusing if you're a first time buyer or even an experienced homeowner. With about a million home lenders and mortgage brokers it's becoming a tough challenge as the days are progressing. But at the same time, when the sites are coming up with all the latest gizmos and tools and relevant information for you, and with all such conveniences, obtaining a home purchase loan or mortgage has become really pretty simple. However, at the same time though, you may be flummoxed to look so many attractive rates and offers in the market. 2. Home improvement loans Home improvement loans are used to finance improvements and add on to the existing set of credentials of beauty on your owned house, recently purchased property or rented accommodation. Home improvement loans are used to maintain or enhance the value of your house. In general it includes: repairs, remodeling, energy-related items (permanent in nature), repairs, a new kitchen, a new bathroom, terrace, an extension or general property improvements. Luxury items and fireplaces are generally not eligible, though. Many improvements in landscape and even swimming pools are nowadays considered to be a part of home improvement. o First Mortgage/Loans: Generally the current lender provides you with home improvement loans against your first mortgage. In the most common cases, the loan is extended for the remaining period of the original mortgage, but one will have to discuss the terms in detail with his/her mortgage lender. Home improvement loans are usually paid out in
payments in proportion to the work that is being carried out and the contractor may be paid directly from the lender. o Second Loans: It may also include: Home Equity Loans and Home equity line of credit. One may have a decent equity in his/her home, but at the same time, he/she needs to be vigilant as well to evaluate and compare the different alternatives in detail to avoid any confusion or problems at the later stages. o Home Loans Refinancing: Refinancing of your mortgage or loans may help you to lower your payments, delay your payments, defer your payments, or may even help in releasing some cash for your home improvement. o Personal, i.e. Unsecured Loan: The best part of personal loan is that it doesn't require you to have equity in your home, nor does it binds you to borrow money against your home. Generally the personal loan is disbursed by either a finance company, or a bank for home improvement project. o Grants from the Government Bodies: Few Government grants programs are available for you to offer financial help to low income families to repair current homes. 3. Home construction loans Home construction loans are used to finance for the construction of yours newly acquired home or if you are planning to build a home. But, with so many home construction loans available in the Indian market,
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Factors to be consider for home building

Design of the house Construction cost Financing Cost Buildable site All the above mentioned costs will help you determine the amount you may need to borrow. For example, besides calculating the construction costs, you may also be required to consider the total expenditures to develop the site in order to build. Each site is unique requiring different expenditures so this specific rupee amount will vary from site location to site location.
4. Home extension loans

Home extension loans are used by customers to get loans from the banks to extend their houses, by adding more rooms, kitchens, wash rooms, terraces, or any other rooms for your growing family. It may also be used to enclose open balcony/terrace space, or constructing a Puja ghar. Home extension loan thus falls under the category of Home loans. If it is not extra bedrooms or balcony or a bigger kitchen, then you might also be looking to expand your lounge or add an extra bathroom. Perhaps you're thinking of extra entertaining space for parties with friends or bigger family get together. You may also be considering adding a conservatory so that there is somewhere for you to relax away from the rest of the family when everyone is at home. 5. Home equity loans Home equity loans helps customer to encash the market value of the commodity by taking a loan by mortgaging the property. So, Home equity loans are availed by customers, who wish to mortgage his/her property to the bank for taking some
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loan for some other purpose. Then, it's up to the bank's discretion to consider the market value of the property and accordingly decide how much to pay to the customer. Both the residential as well as non residential property can be considered for the approval of the loan, provided the mortgager is a licensed title holder and the land is free form any kind of dispute. 6. Land purchase loans Land Purchase loans are used by customers who wish to purchase a plot of land for commercial or residential purpose. Everyone has his/her dream perfectly sketched in his souls and so is his ambition to get his house erected on the exact location Loans that are strictly for land purchase can be as scarce as good residential plots. While many lending firms around the nation compete to provide mortgages for the purchase of a house on a lot, only local institutions typically will be interested in lending for an empty lot. 7. Mortgage loans Balance transfer loans are used by customers who wish to mortgage their property on an attractive rate of interest from the banks like Dena Bank, Bank of India, Citibank etc.. The mortgage loan allows the borrower to apply for loan against a fixed asset of his/her.
Meaning of interest
A rate which is charged or paid for the use of money. An interest rate is often expressed as an annual percentage of the principal. It is calculated by dividing the amount of interest by the amount of principal. Interest rates often change as a result of inflation and Federal Reserve policies. For example, if a lender (such as a
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bank) charges a customer $90 in a year on a loan of $1000, then the interest rate would be 90/1000 *100% = 9%.
Types of interest
There are two types of interest rates are there namely 1. Fixed interest rate and 2. Fluctuated interest rate 1. Fixed interest rate A loan in which the interest rate does not change during the entire term of the loan. For an individual taking out a loan when rates are low, the fixed rate loan would allow him or her to "lock in" the low rates and not be concerned with fluctuations. On the other hand, if interest rates were historically high at the time of the loan, he or she would benefit from a floating rate loan, because as the prime rate fell to historically normal levels, the rate on the loan would decrease. Opposite of adjustable rate. 2. Fluctuated interest rate Any interest rate that changes on a periodic basis. The change is usually tied to movement of an outside indicator, such as the prime interest rate. Movement above or below certain levels is often prevented by a predetermined floor and ceiling for a given rate. For example, you might see a rate set at "prime plus 2%". This means that the rate on the loan will always be 2% higher than the prime rate, which changes regularly to take into account changes in the inflation rate. For an individual taking out a loan when rates are low, a fixed rate loan would allow him or her to "lock in" the low rates and not be concerned with fluctuations. On the other hand, if interest rates were historically high at the time of the loan, he or she would benefit from a floating rate loan, because as the prime rate fell to historically normal levels, the rate on the loan would decrease also called adjustable rate.
Meaning of margin
The loan amount granted by the banking institution, expressed as a percentage of the value of property pledged to secure the loan. In other words, the amount of equity contributed by a customer as a percentage of the current market value of the securities held in a margin account.
Equated monthly installment (EMI)

A fixed payment amount made by a borrower to a lender at a specified date each calendar month, Equated monthly installments are used to pay off both interest and principal each month, so that over a specified number of years, the loan is paid off in full. The benefit of an EMI borrower is that they know precisely how much money they will need to pay toward their loan each month, making the personal budgeting process easier.
Instructions
1. Divide the interest rate by 12 to calculate the interest per month. For example, 10 percent divided by 12 equals 0.00833. 2. Add 1 to the interest per month. For example, 1 plus 0.00833 equals 1.00833. 3. Raise the number calculated in Step 2 by the power of the number of months of repayments. The number of months of repayments is an exponent. For example, 1.00833 to the power of 24 months, this equals 1.220391. 4. Subtract one from the number calculated in Step 3. In the example, 1 1.220391 equals 0.0220391. minus
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5. Divide the interest per month by the number calculated in Step 4. For example, 0.00833 divide by 0.0220391, which equals 0.037812. 6. Add the interest rate per month to the number calculated in Step 5. For example, 0.00833 plus 0.037812 equals 0.046145. 7. Multiply the principal by the number calculated in Step 6 to determine the monthly payment. For example, $10,000 times 0.046145 equals monthly payments of $461.45
Eligibility
Home loan eligibility for Resident Indians depends upon the repayment capacity of the loan applicant. The maximum loan that can be sanctioned varies with the banks and other housing finance companies (HFC) and generally, the maximum loan amount granted is 80 to 85% of the cost of your home. Home loan eligibility corresponding to repayment option is based on the following factors. Even though, the eligibility criteria may vary according to the HFCs regulations.
Home loan Eligibility Criteria

Age (Minimum) Age (Maximum) 21 Years 58(salaried) 60(Public limited/Government Employees) 65 (self employed) Qualification Income Dependents Graduation Stable source of income and saving history Number of dependents, assets, liabilities
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Other income sources
Spouse's income
Quantum of Finance:
As home loan rates increase, the loan eligibility for a borrower becomes stiffer. In such a scenario, some home loan borrowers might have to re-evaluate their options (in terms of loan amount) on account of the new eligibility criteria. The amount of loan will be decided after taking into account factors like earnings and repayment ability of the loan applicant, his assets and liabilities, his age and property (flat/house) value. For increasing loan eligibility, you are allowed to club: Increasing the home loan tenure One of the basic process of enhancing the home loan eligibility is by opting for a higher tenure. This is so because the EMI, which an individual has to pay, starts to decline as the tenure increases while the interest rate as well as the principal amount remains the same. What changes though, is the net interest outgo, which rises with a rise in tenure. And since the individual is paying a lower EMI now, his 'ability to pay' and therefore his loan eligibility automatically increase. Repaying the outstanding loans There might be adverse effect on home loan eligibility for individuals with outstanding loans like car loans or personal loans. Industry standards suggest that existing loans with over 12 unpaid installments are taken into account while computing the home loan borrower's eligibility. In such a scenario, individuals have the option of prepaying in part/full their existing loans. This will ensure that their eligibility for the home loan purpose is unaffected.
Clubbing of income
Home loan eligibility can also be enhanced by clubbing incomes of spouse, children (son or daughter) staying with the applicant and having regular income and even earning parents (father or mother) living with the applicant. The eligibility in such cases will be calculated on the clubbed income of both the applicants enhancing the individual's eligibility to the extent of the co-applicant's income. Set up loan Individuals can also enhance their loan eligibility by opting for step-up loans. A step-up loan is a loan wherein an individual pays a lower EMI during the initial years and the same is enhanced during the rest of the loan tenure. HFCs usually consider the lower EMI of the initial years to calculate his loan eligibility while the initial lower EMI helps increase the individual's 'capacity to borrow'. Perks Salaried individuals must ensure that variable sources of income like performance-linked pay among others are taken into consideration while computing their income. This in turn will imply that the loan amounts they are eligible for stand enhanced as well. Employer-Bank relationship A lesser interest rate will naturally increase your eligibility. Check with the banks if there are any schemes running with your employer. Banks usually categorize companies into A,B,C based on company profiles and run different schemes like special interest rates, processing fee waiver etc. People working in MNCs are benefited out of this usually.
Repayment
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Every housing finance companies or banks have customized repayment options to suit every individual's requirement and also repaying capacity with some tax benefits. They have thereby come up with more flexible and Multiple Repayment Option. A few among them are: Step-up Repayment Facility The objective of step-up repayment is to provide the borrower with a repayment schedule, which is linked to expected growth in income. It not only helps a customer get a larger amount of loan as compared to the loan under the normal housing loan; but the customer can avail of a higher amount of loan and pay lower EMIs in the initial years, which is subsequently accelerated proportionately with the assumed increase in his income.
Flexible Loan installments Plan

This repayment option offers a customized solution to suit the needs of customers whose repayment capacity is likely to alter during the term of the loan. In cases when a borrower is nearing retirement, the loan is structured in such a way that the EMI is higher during the initial years and subsequently decreases in the latter part proportionate to the reduced income of the customer. This option helps such customers combine the incomes and take a long term home loan where in the installment reduces upon retirement of the borrower.
Tranche Based EMI

Customers purchasing an under construction property, need to pay interest (on the loan amount drawn based on level of construction) till the property is ready. Tranche Based EMI is a special facility offered by some banks to help customer save this interest. Customers can fix the installments they wish to pay till
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the property is ready. The minimum amount payable is the interest on the loan amount drawn. Anything over and above the interest paid by the customer goes towards principal repayment. The customer benefits by starting EMI and hence repays the loan faster. Accelerated Repayment Scheme Accelerated Repayment Scheme offers you a great opportunity to repay the loan faster by increasing the EMI. Whenever you get an increment, increase in your disposable income or have lump sum funds for loan prepayment, you can benefit by Increase in EMI means faster loan repayment Saving of interest because of faster loan repayment Or invest lump sum funds rather than use it for loan prepayment. The return from the investments also gives you the comfort of paying the increased EMI. Balloon Payment Balloon Payment is an augmentation tool offered by the financial institutions, which helps in increasing the loan eligibility of the customer without increasing the EMI by assigning securities like National Savings Certificate (NSC), LIC policies etc. The present value of the maturity amount of assigned securities is combined with the loan amount to arrive at the enhanced loan eligibility. Under this facility, the EMI is calculated on the net loan amount (i.e. total loan less the present value of the maturity value of the securities).
Home Loan Tenure

Home loan tenures fixed by RBI are available up to a term of 15 years. Some financial institutions have home loan tenures in the range extending up to 20, 25 and 30 years if the applicant fulfils certain criteria. However, you cannot opt for a
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term that extends beyond your attaining retirement age or 60 years of age (whichever is earlier).
Type of Property
Residential Plot of Land Against Existing Plot of Land
Salaried
15 years 10 years 15 years
Self-Employed
10 years 10 years 10 years
Documentation
Documentation refers to the specific documents to be submitted by applicants as they apply for home loan. These documents are very much necessary for the financial institutions to avoid any dispute and uncertainty. However, there are some standard documents made mandatory for a loan applicant to produce such as the loan applicant's profile, earning life of the applicant and present financial status proof etc. The Applicant's Profile refers to the bio-data of the applicant, mentioning his address, age, family background and detail information.
List of Documents
Salaried Customers Self Employed Professionals Self Employed Businessman Application form with photograph. Identity and Residence Proof. Latest Salary-slip, Education Qualifications Certificate and Proof of business existence. Form 16 Last 3 years Income Tax returns (self and business) Business profile.
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Bank statements (last 6 months), for business/self-employed last 3 years Profit /Loss A/c and Balance Sheet. Processing fee cheque. Proof of Individual's Identity (any one of the following) Passport Photo PAN Card Defence Identity Card Voter's Identity Card Driving License Photo Ration Card Government Identity Card Proof of Residence (any one of the following) Passport Ration Card Telephone (Land/Mobile) Bill Electricity Bill Driving License Voter's Identity Card Life Insurance Policy Proof of Age (any one of the following) Passport Valid Driving License Voter's Identity Card Birth Certificate LIC Policy or Premium Receipt clearly indicating the applicant's age Letter from the employer stating the age of the employee
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Photo Ration Card
RBI NORMS TOWARDS HOME LOANS INTRODUCTION

In pursuance of National Housing Policy of Central Government, Reserve Bank of India has been facilitating the flow of credit to housing sector. During last three years, the housing sector has emerged as one of the sectors attracting a large quantum of bank finance. The current focus of RBI's regulation is to ensure orderly growth of housing loan portfolio of banks.
DIRECT HOUSING FINANCE

Direct Housing Finance refers to the finance provided to individuals or groups of individuals including co-operative societies. Banks are free to evolve their own guidelines with the approval of their Boards on aspects such as security, margin, age of dwelling units, repayment schedule, etc.
Other Guidelines
1. Bank finance extended to a person who already owns a house in town/village where he resides, for buying/ constructing a second house in the same or other town/ village for the purpose of self occupation. 2.Bank finance extended for purchase of a house by a borrower who proposes to let it out on rental basis on account of his posting outside the headquarters or because he has been provided accommodation by his employer. 3. Bank finance extended to a person who proposes to buy an old house where he is presently residing as a tenant.
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4. Bank finance granted only for purchase of a plot, provided a declaration is obtained from the borrower that he intends to construct a house on the said plot, with the help of bank finance or otherwise, within such period as may be laid down by the banks themselves. 5. Supplementary finance Banks may consider requests for additional finance within the overall ceiling for carrying out alterations/ additions/repairs to the house/flat already financed by them. In the case of individuals who might have raised funds for construction/ acquisition of accommodation from other sources and need supplementary finance, banks may extend such finance after obtaining pari passu or second mortgage charge over the property mortgaged in favour of other lenders and/or against such other security, as they may deem appropriate.
INDIRECT HOUSING FINANCE General

Banks should ensure that their indirect housing finance is channeled by way of term loans to housing finance institutions, housing boards, other public housing agencies, etc., primarily for augmenting the supply of serviced land and constructed units. It should also be ensured that the supply of plots/houses is time bound and public agencies do not utilise the bank loans merely for acquisition of land. Similarly, serviced plots should be sold by these agencies to co-operative societies, professional developers and individuals with a stipulation that the houses should be constructed thereon within a reasonable time, not exceeding three years.
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For this purpose, the banks may take advantage of various guidelines issued by NHB for augmenting the supply of serviced land and constructed units.
Lending to Housing Intermediary Agencies Lending to Housing Finance Institutions

(i) Banks may grant term loans to housing finance institutions taking in to account (long-term) debt-equity ratio, track record, recovery performance and other relevant factors. (ii) In terms of NHB guidelines, housing finance companies total borrowings, whether by way of deposits, issue of debentures/ bonds, loans and advances from banks or from financial institutions including any loans obtained from NHB, should not exceed 16 times of their net owned funds (i.e. paid-up capital and free reserves less accumulated balance of loss, deferred revenue expenditure and intangible assets). (iii) All housing finance companies registered with NHB are eligible to apply for refinance from NHB and will be eligible subject to the refinance policy. The quantum of term loan to be sanctioned to them will not be linked to net owned fund as NHB has already prescribed the above referred ceiling on total borrowing of housing finance companies.
Lending to Housing Boards and Other Agencies

Banks may extend term loans to state level housing boards and other public agencies. However, in order to develop a healthy housing finance system, while doing so, the banks must not only keep in view the past performance of these agencies in the matter of recovery from the beneficiaries but they should also
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stipulate that the Boards will ensure prompt and regular recovery of loan installments from the beneficiaries.
Financing of Land Acquisition

In view of the need to increase the availability of land and house sites for increasing the housing stock in the country, banks may extend finance to public agencies for acquisition and development of land, provided it is a part of the complete project, including development of infrastructure such as water systems, drainage, roads, provision of electricity, etc. Such credit may be extended by way of term loans. The project should be completed as early as possible and, in any case, within three years, so as to ensure quick re-cycling of bank funds for optimum results. If the project covers construction of houses, credit extended therefor in respect of individual beneficiaries should be on the same terms and conditions as stipulated for direct finance.
Terms and Conditions for Lending to Housing Intermediary Agencies

(i) In order to enhance the flow of resources to housing sector, term loans may be granted by banks to housing intermediary agencies against the direct loans sanctioned/ proposed to be sanctioned by the latter, irrespective of the per borrower size of the loan extended by these agencies and such term loans would be reckoned for the purpose of achievement of their housing finance allocation . (ii) Banks can grant term loans to housing intermediary agencies against the direct loans sanctioned/proposed to be sanctioned by them to Non-Resident Indians also. However, banks should ensure that housing finance intermediary agencies being financed by them are authorized by RBI to grant housing loans to NRIs as all housing finance intermediaries are not authorized by RBI to provide housing finance to NRIs. Further, such finance granted by banks to housing finance
intermediary agencies against the letters on-lending to NRIs will not be treated as housing finance for the purpose of scheme of yearly allocation of housing finance applicable to banks. (iii) Banks have freedom to charge interest rates to housing intermediary agencies without reference to Benchmark Prime Lending Rates (BPLR)
Term Loans to Private Builders

In view of the important role played by professional builders as providers of construction services in the housing field, especially where land is acquired and developed by State Housing Boards and other public agencies, commercial banks may extend credit to private builders on commercial terms by way of loans linked to each specific project. The period of credit for loans extended by banks to private builders may be decided by banks themselves based on their commercial judgment subject to usual safeguards and after obtaining such security as banks may deem appropriate. Such credit may be extended to builders of repute, employing professionally qualified personnel. It should be ensured, through close monitoring, that no part of such funds is used for any speculation in land. It is advised that banks adhere to the National Building Code (NBC) formulated by the Bureau of Indian Standards(BIS) in view of the importance of safety of buildings especially against natural disasters. Banks may consider this aspect for incorporation in their loan policies.
HOME LOANS UNDER PRIORITY SECTOR

The following housing finance limits will be considered as Priority Sector Advances:
Direct Finance
Loans up to Rs. 15 lakh in rural, semi-urban, urban and metropolitan areas for construction of houses by individuals, with the approval of their Boards. Loans up to Rs.1 lakh in rural and semi urban areas and Rs. 2 lakhs in urban areas for repairs to damaged houses by individuals. Loans granted by banks in rural areas under the Special Rural Housing Scheme of NHB will also be considered as part of priority sector advances subject to the limits specified under (i) and (ii) above i.e. upto Rs. 15 lakhsfor acquiring/ construction of a new house and upto Rs. 1 lakh for repairs/ up gradation of an existing house.
Indirect Finance
Assistance given to any governmental agency for construction of houses, or for slum clearance and rehabilitation of slum dwellers, subject to a ceiling of Rs.5lakh of loan amount per housing unit. Assistance given to a non-governmental agency approved by the National Housing Bank for the purpose of refinance for reconstruction of houses orfor slum clearance and rehabilitation of slum dwellers, subject to a ceiling of Rs. 5lakh of loan amount per housing unit.
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CONSTRUCTION ACTIVITIES NOT ELIGIBLE FOR BANK CREDIT

Banks should not grant finance for construction of buildings meant purely for Government/Semi-Government offices, including Municipal and Panchayat offices. However, banks may grant loans for activities, which will be refinanced by institutions like NABARD. Projects undertaken by public sector entities which are not corporate bodies (i.e. public sector undertakings which are not registered under Companies Act or which are not Corporations established under the relevant statute) may not be financed by banks. Even in respect of projects undertaken by corporate bodies, as defined above, banks should satisfy themselves that the project is run on commercial lines and that bank finance is not in lieu of or to substitute budgetary resources envisaged for the project. Thus, in the case of a housing project, where the project is run on commercial lines, and the Government is interested in promoting the project either for the benefit of the weaker sections of the society or otherwise, and a part of the project cost is met by the Government through subsidies made available and/or contributions to the capital of the institutions taking up the project, the bank finance should be restricted to an amount arrived at after reducing from the total project cost the amount of subsidy/capital contribution receivable from the Government and any other resources proposed to be made available by the Government.
REPORTING
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Banks should compile the data relating to Housing Finance at half-yearly intervals on the lines of format given in Annexure 1 and keep it ready for being made available to the banks internal inspectors/RBIs inspectors. For the purpose of monitoring the macro-level performance of the commercial banks in disbursement of housing finance banks should submit, on a quarterly basis, details of disbursements made by them towards housing finance to Department of Banking Supervision, RBI, Central Office, World Trade Centre, Cuffe Parade, Mumbai 400 005, as per the format given in Annexure 2 within 20 days from the close of the respective quarter. Housing loans taken over from other banks should not be included in the quarterly statement as disbursements.
RISK WEIGHT ON HOUSING FINANCE

Banks extending housing loans to individuals against the mortgage of residential housing properties are required to assign risk weight of 75% on such loans which are fully secured by mortgage of residential properties and investments in Mortgage Backed Securities (MBS) of Housing Finance Companies (HFCs) recognized and supervised by NHB. In the case of MBS of Housing Finance Companies to be eligible for 75% risk weight, securities issued by the SPV should be backed only by assets qualifying for 75% risk weight. In all other cases, it will be 100%. However the risk weight for commercial real estate exposure has been raised to 125% on July 26, 2005 and further to 150% on May 25, 2006.
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Credit Appraisal
Credit appraisal is an important exercise for building up of a quality credit portfolio and avoiding bad loans at the beginning itself. meticulous understanding of various aspects like: Need for the Home Sources of income Applicants previous credit dealing Repaying capacity Enforcement of securities etc. Credit appraisal is an impartial and crucial exercise than disbursement or abstention of security as already stated, recovery of loan depends much on the quality of appraisal. Since the Home Loans are long term in nature spread over a period extending 15-20 years, there is every reason to be vigilant and foresee the repaying capacity of the prospective applicant and take appropriate measures at the time of initial appraisal itself to ensure safety of the advance. Credit Appraisal is the process followed by banks to determine the borrowers ability to repay his loan as well as his trust worthiness. A prospective borrower has to go thorough the stages of credit appraisal as practiced by different banks. Is sanctioned can be calculated as below: The main factor banks will consider is proof that shows that the borrower is capable of repaying the loan on time. For
It is nothing but
this, they will look into your income documents, personal credit history, current assets and liabilities, education, experience etc. Old generation banks and cooperative banks to certain extent rely upon existing relationship or the previous experience with a client. A common pattern they follow is the sanctioning of a loan amount which will be a fixed multiple of the annual income. However, the new generation banks strictly follow their parameters. The loan eligibility is usually calculated by applying Fixed Obligations to Income Ratio (FOIR). Most banks restrict FOIR to a maximum 45-50% of monthly income. That means, considering that one needs around 45- 50% of his income for his personal expenses, all fixed obligations including the home loan applied for, should be restricted to a maximum 45-50% of his gross monthly income. The loan amount. Loan Eligibility = Gross monthly income * 45-50% all other obligations / per lakh EMI (EMI calculated on the basis of applied tenure and rate of interest). For the business class, banks will analyze the financial statements to see how the business has been faring for the past 2-3 years considering the ITRs, Balance Sheets, P & L Accounts (audited and certified). Banks look into your credit history like existing loan repayments, mishandled accounts or delinquent credit cards. This can be checked through a database of past loans and repayments available with the Credit Bureau of India Ltd (CIBIL). Cross checking of the income with documents like bank statements or initiating credit verifications is also part of the process. LTV is also a factor in eligibility calculation. Banks finance up to 70-80% of the property value as evaluated by the banks evaluator. For those who have not yet decided on the property, there is an option to sanction an in-principle amount, which helps to know the amount a bank would be able to give out.
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HOME LOAN PRACTICES IN SBI

The most preferred Home Loan provider voted in Awaaz Consumer Award along with the Most Preferred Bank Award in a survey conducted by TV 18 in association with AC Nielsen-ORG Marg in 21 cities across India. SBI Home Loans now offers Interest Rates concessions on Green Homes in accordance with SBI's commitment to Environment protection. SBI Home Loans come to you on the solid foundation of trust and transparency built in the tradition of State Bank of India. Best Practices followed in SBI mentioned below will tell you why it makes sense to do business with State Bank of India. SBI housing loan is one of the most simple and customer friendly home loans across the India. The housing loan offers many facilities to the customers that help them materialize their dream home plans better. The SBI housing loan comes with attractive packages and exclusive benefits. State bank of India housing loans are available with attractive interest rates and repayment terms that are suitable for the borrowers. These loans are offered by the personal banking division of SBI.
Types of Home Loans offering by SBI

SBI offering various types of home loans to fulfill the customers needs.
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1. SBI easy housing loan 2. SBI advantage housing loan 3. SBI premium housing loan 4. Housing loan product variants SBI maxgain SBI realty SBI home plus NRI home loan SBI tribal plus Sahyog niwas SBI green home loan 5. Related home loan products Earnest money deposits(EMD) scheme SBI reverse mortgage loan 6. New products SBI surakshit home loan SBI yuva home loan SBI home loan PAL 7. Gram nivas scheme
1. SBI Easy home loan:

Getting your dream home has become easier with SBI Easy Home Loan. With low interest rates for home loan under Rs. 30 lakhs category, SBI Easy ensures that you are not burdened with high interest for your home loan. Plus with over 13700
SBI branches nationwide you can get your Home Loan account parked at a Name Facility Type Loan amount Interest Rate SBI Easy Home Loan Term Loan or OD as in SBI MaxGain. (OD facility will be available for loans above Rs.5 Lacs.) Upto (and including) Rs.30 Lacs Card Rate applicable for the tenor of the loan 1.50% above Base Rate, Present effective rate being 9.75% p.a.
Ist Year 1% discount over Card Rate, present effective rate being 8.75% p.a. 2nd and 3rd year 0.25% discount over Card Rate, present effective rate being 9.50% p.a.
4th year Card Rate onwards No Fixed Interest Rate option. branch nearest to your present or proposed residence.
Processing Fee
The revised processing fee structure (including service tax) is as under: Loan Amount Upto Rs.5 Lac Processing Fee Rs.1000/-
Above Rs.5 Lac and upto Rs.10 Lac Rs.2000/Above Rs.10 Lac and upto Rs.20 Lac Rs.5000/Above Rs.20 Lac and upto Rs.30 Lac Rs.7,000/-
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2. SBI Advantage home loan

Name SBI Advantage Home Loan (Above Rs.30 Lacs and upto Rs.75 Lacs) Term Loan or OD as in SBI MaxGain.
Facility Type Loan For Home Loans above Rs 30 lacs and upto Rs. 75.00 Lacs amount Interest Rate Card Rate applicable for the tenor of the loan 1.75% above Base Rate, Present effective rate being 10.00% p.a. Ist Year 1.25% discount over Card Rate, present effective rate being 8.75% p.a. nd rd 2 and 3 0.50% discount over Card Rate, present effective rate being at 9.50% year p.a. th 4 year Card Rate onwards No Fixed Interest Rate option.
Processing Fee:
Loan Amount Above Rs.30 Lac and upto Rs.50 Lacs Processing Fee Rs.7,000/-
Above Rs. 50 Lacs and upto Rs. 75 Lacs Rs. 8,000/-
3. SBI Premium home loan

Name SBI Premium Home Loan Above Rs.75 Lacs
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Facility Type Loan amount Interest rate
Term Loan or OD as in SBI MaxGain up to Rs.1 Crore. For Home Loans above Rs 75.00 lacs Card Rate applicable over the tenor of the loan is 1.75% over the Base Rate, present effective rate being 10.00% p.a. Concessions including discretionary concessions will be available over the tenor of the loan No Fixed Interest Rate option.
Processing Fee
The revised processing fee structure (including service tax) is as under: Loan Amount Above Rs.75 Lacs and upto Rs.1 Crore Above Rs. 5 Crores Processing Fee Rs. 8,000/Rs. 20,000/-
Above Rs. 1 Crore and upto Rs. 5 Crores Rs. 10,000/-
4. Home loan product variants

The various home loan product variants are:
SBI Maxgain
An innovative and customer-friendly product to enable you to earn optimal yield on your savings and minimize interest burden on Home Loans, with no extra cost. The loan is granted as an Overdraft facility with the added flexibility for you to operate your Home Loan Account like your SB or Current Account. The product serves to minimize your interest cost by enabling you to park your surplus funds in SBI-Maxgain (with the benefit to withdraw the surplus funds whenever you require), specially in the wake of low yields from other deposit/ investment avenues. Minimum Loan Amount: Rs.5 lacs Maximum Loan Amount: Rs.1 Crore
SBI Realty
A unique product if you are on the lookout for a loan to purchase a plot of land for house construction. The loan is available for a maximum amount of Rs.1 crore and with a comfortable repayment period of up to 15 years. House construction should commence within 2 years from the date of availment of SBI-Realty Housing Loan. Customers are also eligible to avail another Housing Loan for construction of house on the plot financed above with the benefit of running both the loans concurrently. (Other terms and conditions as applicable to regular Home Loans). Name Max amount Margin SBI Realty 10 cror 20% up to 75 lakhs. 25% above 75 lakhs and up to Rs. 1 crore. 50% above 1 crore. Properties to be valued by two independent empanelled valuations to be consider. And Two title search reports to be obtained one before loan sanction another before disbursement. 30% up to Rs.2 lakh 40% NAI above Rs.2 lakh and up to Rs.5 lakh 450% NAI above 10 lakh 5% NAI above Rs.5 lakh and up to Rs.10 lakh (may be relaxed by 10% sanctioning authority if customer Undertakes to complete construction of house by own source).
Features
NAI
SBI Home Plus

SBI Home plus is scheme is launched for granting personal loans to the banks home loans customers against the security of their house property. All home loans customers with a satisfactory repayment record of at least one year and who maintain a Savings bank or current account with us. The loan can be used for any purpose, viz. extension/repair of house, purchase of car/ consumer durables, education / medical expenses of family members, personal expenses, etc. There will be no need to obtain documentary evidence for the enduse of funds. However a certificate from the customer in the application to the effect that the loan will not be used for speculative purposes would be obtained. Name Min amount Max amount Margin EMI Repayment SBI home plus Rs.25,000 Rs.10 lakh 15% 60% If EMI extended to cover the loan max 120 months including moratorium. If EMI not extended, lower of remaining HL tenure or 120 months including moratorium.
NRI Home Loans

State bank of India provides SBI NRI home loan for building a new house/flat, buying an old house/flat or repair and reconstruction of house. However, SBI lays down certain pre-conditions for NRI to avail home loan. The conditions are: The loan seeker should have stayed in India for at least 182 days or more. The loan seeker should be at least 21 years old/ The loan seeker should have valid Indian passport.
Should have been working abroad for at least 2 years with valid job contract. The loan seeker should have a steady flow of monthly income with stable employment/business to ascertain the repayment capacity. Non Resident Indians (NRIs) should have a valid Indian passport.
Loan Amount
The loan amount is to be determined on the basis of repayment capacity taking into account income, age, assets and liabilities, qualifications, stability of occupation, and employment prospects on return. The loan amount is subject to the following: Minimum: Rs. 3 lacs Maximum: Maximum permissible loan amount would be determined by EMI/NMI ratio criteria as applicable to regular Home Loans scheme for Resident Indian customers, which is 30% for Net Annual Income (NAI) up to Rs.2 Lac, 50% for NAI above Rs.2 Lac and up to Rs.5 Lac, 55% for NAI above Rs.5 Lacs and up to Rs.10 Lacs, 65% for above Rs.10 Lacs.
SBI Tribal Plus

'SBI-Tribal plus Home Loans, a Special Scheme designed for Hill/Tribal areas for extending financial assistance to individuals in such areas to: a. b. Purchase or construction of a new house / flat (without mortgage of land) Purchase of an existing house / flat which is not more than 10 years old.
c. Repair /Renovation/extension of an existing house or flat. d. Loans given against Third Party Guarantee
Features/conditions
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For employees:
Age min 21 years, loan to be fully repaid by the age of 65 years. Min 5 years of service4 36 times NMIs Min liquid security- 30% of loan amount (AGM region/branch may reduce it to 15% of the loan amount in respect of tie-up with government departments reputed corporate with availability of bulk business potential of less than Rs.2 crore.
For professionals, self-employed, businessman, and agriculturists:

Min 5 years of experience. Maintaining deposit account with average balance of Rs.500/- for last 2 years or Maintaining loan account for a minimum period of 2 years (without any instance of overdue and bouncing of cheques etc). Classified as standard assets. Loan: 2 times of average NAI for the last 3 years. Min liquid security 50% of loan amount. Max repayment- 15 years. Margin: If construction/purchase: 15%, if repairs: 20%
Sahyog Niwas
The Sahyog Niwas scheme has been instituted to finance the self help groups with a good track of payment record for 2 years, for on lending to members for housing in rural areas, covering the following purposes.
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For the purchase or construction of a house exclusively or including the housing needs of activities carried by them. (Dairy shed, tailoring shed/shop, grocery stores etc.) For the renovation or repair of an existing house / shed For the purchase of a plot of land for the purpose of house construction. For the extension of existing house / work space to existing house /shed. Loan amount: Loan amount 10 times the savings the corpus of SHG including limits already sanctioned.
SBI Green Home Loan

State Bank of India has adopted a Green Banking Policy with an objective of contributing towards the fight against the adverse climate change. One of the initiatives approved by the Board for this purpose is incentivizing customers who go in for Green Projects, i.e. those projects which reduce Carbon Emissions and promote Renewable Energy. Green Housing or Green Home is one of the types of projects identified for this purpose. Special concessions: 5% waiver in margin. 0.25% concession in interest rate. Waiver of processing fee. Other terms and conditions as applicable to regular Home Loans.
5. Related Home Loan products: Earnest Money Deposit (EMD) Scheme
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Many Government agencies, like Urban Development Authorities and Housing Boards, periodically come out with schemes for sale of plots/houses, wherein applicants have to submit 10-20% of the cost of plot/house as Earnest Money Deposit (EMD) and allotments are made by draw of lots. The SBI EMD scheme is designed for financing against earnest money for allotment of a house/plot. Individuals above 21 years of age and with a steady source of income are eligible to avail loans under this scheme.
Salient Features of the Scheme:

No minimum income criteria. Margin waived in al cases. Eligible for 100% of application money, subject to maximum loan amount of Rs.10 Lacs. Waiver of security in all cases irrespective of the loan amount. The above mentioned features of the scheme are applicable subject to the following conditions: Allotment letters/refund orders should be routed through SBI. Lump sum amount equal to 6 months interest to be taken upfront. PDCs one for the principle amount of EMD and another towards interest for the next 6 months should be taken to meet the eventuality of refund getting delayed.
Repayment:
By refund in case of non-allotment By regular HL in case of allotment but not more than 12 months from the date of disbursement of the loan.
SBI Reverse Mortgage loan

SBI Reverse Mortgage Loan enables house-owning Senior Citizens having inadequate income to meet their financial needs for renovation/repairs to house, medical & other personal purposes. There is no compulsion for the borrower to repay a RML during his or her lifetime or till such time he or she continues to stay in the house. The borrower continues to retain ownership of the house. Also, the borrower will have the option to prepay the loan at any time during the loan tenure and there will be no pre-payment penalty. The min amount is Rs.3 lakh and max amount is Rs.1 crore.
Features/conditions
Age: above 60 years(first borrower), when loan jointly with spouse, age above 58 years should not have more than one securing spouse undertaking to not re-marry during loan term. Loan availed jointly with spouse: Loan tenure: 15 years if age of younger borrower up to 68 yeas and 10 years if age of younger borrower above 65 years. Loan availed in single name: 15 years if age of borrower up to 68 years and Loan tenure 10 years if age of borrower above 68 years. Loan amount: 90% of value of property (it includes interest still maturity). Loan may be disbursed in monthly/quarterly installments or 50% in lump sum and remaining 50% though periodic payments.
6. NEW PRODUCTS
These home loans are lunched recently in order to provide better service and modern services to consumers. The new products are:
SBI Surakshit Home Loan: A separate product for customers who opt for home loan with life insurance cover. Other features like tenure, loan to value, eligibility as per the standard schemes.
SBI yuva home loan

Features/conditions Type of loan Eligibility :Term loan only : Salaried employee of companies form the private sector, MNCs, Government undertakings, PSUs Government Age YUVA couple employees. : Between 21 years to 35 years. : Min contribution of 25% to combined EMI by each of husband and wife then upper age limit stands YUVA family Min NMI Loan term Repayment relaxed to 40 years : Contribution of 75% to combined EMI by Yuva or Yuva couple, then parents may join as co-borrowers : Rs.50,000/- expected rental income from proposed property not o be added. : Maximum 300 months : Fixed loan term of 240 months First 36 months only interest applied during the month will be recovered. 37th month onwards 204 EMIs Loan amount : 20% extra i.e., 1.2 times the loan as per regular HL
based on EMI/NMI ratio Benefit under corporate salary package if Employee Company covered under CSP if not under CSP, then festival loan (DL) equivalent to 3 months NMI repayable within 36 months permitted.
Features/conditions, other then those mentioned above will be the same as those applicable to SBI home loan scheme.
SBI Home Loan PAL ( Pre-Approved Limit ) Benefits of this product:

1. Under this, your Eligible Loan Amount is assessed before finalization of property deal and a Pre-Approved Loan Arrangement Letter (PLAL) is issued to you. 2. Customer can confidently negotiate with the builder/seller after getting a sanction.
Features
Minimum age: 18 years as on the date of sanction Maximum age: 70 years. i.e. the age by which the loan should be fully repaid, subject to availability of sufficient, regular and continuous source of income for servicing the loan repayment.
Loan Amount: Actual loan amount will be determined taking into consideration
such factors as applicants income and repaying capacity, age, assets and liabilities, cost of the proposed house/flat etc. To enhance loan eligibility you have option to add: 1) Income of your spouse/ your son/ daughter living with you, provided they have a steady income and his/ her salary account is maintained with SBI.
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2) 3) 4)
Expected rent accrual (less taxes, cess, etc.) if the house/ flat were being purchased is proposed to be rented out. Depreciation, subject to some conditions. Regular income from all sources.
Security: Equitable mortgage of the property. Margin/ LTV Ratio:

Loan Amount Upto Rs. 20 Lacs Above Rs. 20 Lacs. Margin (Min.) 10% 20% Maximum LTV Ratio (Max.) 90% 80%
7. GRAM NIVAS SCHEME

This customized offering is an extension of the social responsibility that we have shouldered since the very inception of the Bank. The objective of this scheme is to comprehensively cater to the needs of the village community with special focus on poorest of the poor for Housing Loans keeping in view the peculiarity of the ownership title in rural areas, social habits, type of construction and other related needs.
Features Operational Area

The Scheme will cover all rural and semi-urban centres. 'Rural Area' for the purpose of the Scheme is the area comprised in any village including the area comprised in any town, the population of which does not exceed 50000 as per 1991 census.
Eligibility
The applicant should be between 21 years and 50 years of age
Individuals having satisfactorily conducted deposit accounts for two years, or Individuals whose existing loan account is satisfactorily conducted and is Standard Asset, or A member of a Self Help Group having savings/ loan accounts with us Applicants above 50 years may be considered for sanction of loan with all the legal heirs joining as guarantors or after obtaining a suitable no objection agreement/ power of attorney from the legal heirs
Loan Amount
The loan amount will be: 5 times the Average Annual Income from agriculture including income from ancillary agricultural activity, or 5 times the Net Annual Income in case of employees, or 5 times the Average Annual Income from the business/ profession To enhance the loan eligibility you have the option to add: o Income of your spouse o Regular income from all sources The loan amount is, however, subject to the following limits For construction/purchase of house: Rs.2.00 lacs For repairs/renovation: Rs.1.00 lac For purchase of land: Rs.0.30 lac
Margin
10% of the project cost
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Assessment of Eligibility
For loans upto Rs.0.50 lacs on the basis of simple estimates For loans above Rs.0.50 lacs on the basis of unit costs for different types of houses as fixed by the Bank
Security
For loans upto Rs.0.50 lacs only third party guarantee is required For Loans above Rs.0.50 lacs: Equitable/ Registered mortgage of the House/ Flat, or Any other tangible security including agricultural land to cover 100% of loan amount
Repayment
Maximum repayment period of upto 15 years with option to repay in equated monthly/ quarterly/ half yearly/ yearly installments, decided upon the merits of each case
Processing Charges
Nil. (Lawyers fee, not exceeding Rs.500, to be paid by the borrower) (Other terms and conditions as applicable to regular housing loans)
MOST IMPORTANT TERMS AND CONDITIONS

These terms and conditions are applicable to all Home Loan customers:
Purpose for which home loan can be availed:

1. The loan will be sanctioned for the purpose of purchase / construction / extension / repairs/renovation of new/second-hand residential house/flat/plot of
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land/purchase of consumer durables/furnishings (hereinafter referred to as the project) 2. Premium of Home Loan Insurance cover (Optional) : The premium for the optional Home Loan Life Insurance cover (if availed) will be added to the loan amount.
Eligibility
You should be at least 18 years of age to qualify for a state banke of India home loan. The maximum age limit for a loan applicant is 70 years by which the loan has to be paid in full. However, this is dependint on availability of adequate, constant and steady source of earnings for paying off the loan.
Loan to Value Ratio (LTV):

For loan amount less than Rs.20 Lacs, maximum permissible LTV ratio is 90% of the assessed value of the property. For loan amount less than Rs.20 Lacs, maximum permissible LTV ratio is 80%.
Rate of Interest: Floating Rate of Interest:

Interest on the loan will be charged at prevailing floating rate of interest on a daily reducing balance at monthly rests. The rate of interest is subject to revision from time to time due to (i) changes in Base Rate or (ii) revision even without change in Base Rate the Bank has the option to reduce or increase the EMI or extend the repayment period or both consequent upon revision in interest rate.
Fixed Rate of Interest:
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Interest on the loan will be charged at the prevailing fixed rate of interest on daily reducing balance at monthly rests, subject to interest rate reset at the end of every two years on the basis of fixed interest rates prevailing then. State Bank of India (SBI) may at its discretion stipulate the periodicity of computation of interest. Further, SBI may at its sole discretion alter the rate of interest suitably and prospectively in the event of major volatility in interest rates during the period of the agreement. Thenceforth the rate of interest varied as aforesaid shall be applicable to the Loan. SBI shall be the sole judge to determine whether such condition exists or not. If the Borrower is not agreeable to the revised interest rate so fixed, the Borrower can request SBI, within 15 days of receipt of the notice intimating change in interest rates from SBI, to terminate the loan and the Borrower shall repay the Loan and any other amount due to SBI in full and final settlement in accordance with the provisions of the Agreement relating to preclosure.
Calculation of interest:
Interest on the amount of the loan will be applied at the prevailing rate per annum on daily reducing balance with monthly rests.
Intimation of change in Interest Rate:

The borrower shall be deemed to have notice of changes in the rate of interest whenever there are changes in Base Rate or increase in interest rates where there is no change in Base Rate are either displayed on the Notice Board of the Branch or published in news papers or made through entries of the interest rate charged in the passbook/statement of account furnished to the borrower and the borrower is liable to pay such revised rate of interest.
Penal interest:
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In the event of a default in payment or any irregularity in the account, the Bank reserves the right to levy a higher rate of interest as it deems fit. Enhanced rate of interest @2% p.a on the irregular amount for the period of irregularity, over and above the applicable rate will be charged if the Equated Monthly Installment (EMI) remains unpaid for a period of 30 days from the due date, for any reason, including a bounced cheque. Bounced cheque/ECS or SI dishonors:A penalty of Rs 250/- will be charged for every bounced cheque/ECS or SI dishonors. The rate may vary from time to time.
Repayment:
The loan is to be repaid in Equated Monthly Installments over the tenure of the loan. The repayment installment commences (a) 2 months after completion of construction of house/flat or after eighteen months from disbursement of first installment, where loan is released in installments, whichever is earlier or (b) From the next month after the date of full disbursement in respect of outright purchase of land/house/flat/extension, repairs or renovation of an existing house/flat. The liability to the bank will be extinguished only when the outstanding in the loan account becomes Nil, on payment of residual amount, if any.
Loan Tenor:
Maximum 25 years (or) up to the age of 70 years (the age by which the loan should be fully repaid) of the borrower, whichever is early.
Pre-closure Charges:
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Loans on Fixed and Floating rate of interest:

Pre-closure charge of 2% of the amount pre-paid in excess of normal EMI dues will be levied in case of pre-closure of loan within 3 years from the stipulated date of commencement of repayment. If the loan is pre-closed from own resources other than borrowings, for which proof is submitted to the satisfaction of the Bank, pre-closure charges shall not be levied irrespective of the period for which the loan account has run.
Security Primary:The loan will be secured by Equitable / Registered mortgage/extension of mortgage of the land and building/flat for which the loan is to be sanctioned.
Collateral:
If mortgage of the property being financed is not possible, Bank may accept, at it discretion, security of adequate value in the form of Life Insurance policies, Government Promissory Notes, shares/ debentures, gold ornaments or such other tangible security as may be deemed appropriate.
Interim Security Pending Mortgage:Wherever creation of mortgage is likely to be delayed for any valid reason, suitable security including third party guarantee, as considered necessary, may be taken for the interim period.
Utilization of the loan:

The amount of the loan shall be utilized strictly for the purpose detailed in the borrowers application form and in the manner prescribed. The construction of the house/flat or the modification/extension proposed by the borrower in the
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existing house/flat should be strictly according to the plan approved by the Local Authorities/Town Planning and Development authorities. Any modification desired in the plan as originally approved, can be undertaken only after express sanction for it has been obtained from the appropriate authority.
Insurance:
The house/flat shall be insured comprehensively for the market value covering fire, flood, Earthquake etc. in the joint names of the Bank and the borrower. Cost of the same shall be borne by the borrower.
Inspection:
The Bank will have the right to inspect, at all reasonable times, the borrowers property by an officer of the Bank or a qualified auditor or a technical expert as decided by the Bank and the cost thereof shall be borne by the customer.
Fees and charges:

Processing fee: Is to be paid upfront at rates laid down by the Bank from time to time. Entire processing fee would be refunded if application is rejected after initial scrutiny. If loan application is rejected after site inspection and/or abstention of legal/valuation report, 75% of the processing fee will be reimbursed. No refund of processing fee is permissible in case of sanction/rejection by sanctioning authority. Loan Amount Up to Rs.5 Lac Above Rs.5 Lac and up to Rs.10 Lac Above Rs.10 Lac and up to Rs.20 Lac Above Rs.20 Lac and up to Rs.50 Lac Above Rs.50 Lac and up to Rs.1 Cr Above Rs.1 Cr and up to Rs.5 Cr Above Rs.5 Cr Processing Fee Rs.1000/Rs.2000/Rs.5000/Rs.7,000/Rs.8,000/Rs.10,000/Rs.20,000/-
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SBI Home loan interest rates

When youre searching for the most affordable home loan interest rates from the market, you should give State Bank of India a thought. State Bank of India home loan interest rates are one of the best rates that are available to you in India.
About
State
Bank
of
India
Home
Loan
Interest
Rates
State Bank of India home loan interest rates are one of the most competitive rates that you will get in the market. The rates are subject to change as per the sole discretion of SBI.
SBI EMI calculator

State Bank of India comes up with a unique SBI home loan calculator to enable its customers an easy and simple way to calculate their monthly installments and get an estimate of the amount for successive payments in settlement of their debt. The SBI home loan EMI calculator is a convenient way for the individual applying for the home loan to determine the amount to be paid as an installment. For this the person must be aware of following details: The amount he/she requires The applicable interest rate The duration for which you want to acquire. The seeker can also examine the monthly installments for diverse periods and select and choose the more suitable option using this tool. The SBI home loan calculator is applicative to Indian residents.
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SBI on its website offers its clients a free of cost online SBI Home loan EMI calculator which helps them to make a calculation of their respective EMI amount and capacity to avail and repay the amount thereafter. This minimizes the task of the customer and makes the whole banking procedure simple and easy to understand. This also gives an option to the client to get a rough idea about his monthly payments vis-a-vis the amount of home loan he/she has availed from the bank.
SBI Home loan insurance

The State Bank of India comes up with the SBI Home loan insurance product providing a shield to the customer's home loan in wake of any unexpected occurrence. In such circumstances the deceased's family members will have the backing of the insurance cover to pay for the remaining amount of the home loan without any stress of monthly loan installments in order to repay the loan amount. In absence of such an insurance cover paying the EMIs would become a Herculean task for the family members of the loan taker. People seeking home loan often encounter such worries like what if anything happens to them in that case what would happen to the home loan? Naturally, their main concern is that should something happen to them their folks would have to encounter the problem of facing the impact of repaying the loan debt. The premium amount broadly relies on few conditions: Age of the person availing the loan (the younger the person, the lower the premium amount) Loan amount (the lesser the loan amount, the lower the premium) Period of the loan (the more the loan repayment period, more is the premium)
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Health of the loan taker (the premium amount would be low in case of good health of the individual)
DOCUMENTS List of papers/ documents applicable to all applicants:

Completed loan application 3 Passport size photographs Proof of identify (photo copies of Voters ID card/ Passport/ Driving license/ IT PAN card) Proof of residence (photo copies of recent Telephone Bills/ Electricity Bill Property tax receipt/ Passport/ Voters ID card) Proof of business address for non-salaried individuals Statement of Bank Account/ Pass Book for last six months Signature identification from present bankers Personal Assets and Liabilities statement
For guarantor (wherever applicable):

Personal Assets and Liabilities Statement 2 passport size photographs Proof of identification as above Proof of residence as above Signature identification from his/her present bankers Proof of business address as above
Additional documents required for salaried persons:
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Original Salary Certificate from employer TDS certificate on Form 16 or copy of IT Returns for last two financial years, duly acknowledged by IT Deptt.
Additional documents required for Professionals/self- employed/ other IT assesses:

Photocopies of challans evidencing payment of Advance Income Tax. Acknowledged copies of three years I.T. returns/ Assessment Orders.
Tax benefits
There are certain tax benefits for the resident Indians based on the principal and interest component of a loan under the Income Tax Act, 1961. It may help one get tax benefit up to Rs. 50,490 p.a. (approx). if interest repayment of Rs. 1,50,000 p.a. is paid. In addition to this, one also is eligible for getting tax benefits under section 80C on repayment of Rs. 1, 00,000 p.a. that further reduces the tax liability by Rs.33.660 p.a. These deductions are available to assesses, who have taken a loan to either buy or build a house, under Section 24(b). However, interest on borrowed capital is deductible up to Rs 150,000 if the following conditions are fulfilled: Capital is borrowed for acquiring or constructing a property on or after April 1, 1999. The acquisition and construction should be completed within 3 years from the end of the financial year in which capital was borrowed.
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The person, extending the loan, certifies that such interest is payable in respect of the amount advanced for acquisition or construction of the house A loan for refinance of the principle amount outstanding under an earlier loan taken for such acquisition or construction. In addition to the above, principal repayment of the loan/capital borrowed is eligible for a deduction of up to Rs 100,000 under Section 80C from assessment year 2006-07.
Terms and conditions for availing Tax benefits on Home Loans

Tax deductions can be claimed on housing loan interest payments, subject to an upper limit of Rs 150,000 for a financial year. An additional loan for extension/improvement to the same house and the individual's deductions on the existing loan are less than Rs 150,000; he can claim further benefits from the additional loan taken, subject to the upper limit of Rs 150,000 for a financial year. Tax benefits under Section 24 and deduction under section 80C of the Income Tax Act can be claimed only when the payment is made. If an individual fails to make EMI payments, he cannot claim tax benefits for the same. According to the Income Tax Act, tax rebates can only be claimed by the loan applicant.
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The interest on home loans taken for repairs, renewals or reconstruction, also qualifies for the deduction of Rs 150,000. A husband and wife, both of whom are tax-payers with independent income sources, get tax deduction benefits, with respect to the same housing loan; to the extent of the amount of loan taken in their own respective name. If an individual buys a house and sells it within the same year or after 3 years, and if any profit is made, then a capital gains tax liability arises on the same for which the individual is liable to pay short-term capital gains tax since the sale took place in the same year. But in case, if the sale had taken place after 3 years, then a long-term capital gains tax liability would have arisen. On being proved that the home loan is simply an arrangement between the loan-seeker and the builder or with a third party for the purpose of claiming tax benefits, then tax benefits will not be allowed and benefits, previously claimed, will be clubbed to the income and taxed accordingly. Tax benefits on interest on housing loans are allowable only for the original loan and according to Section 24 (1), tax benefits can also be availed for a second loan taken to repay the first loan but not for subsequent loans.
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ANALYSIS AND INTERPRETATION OF DATA Graph showing total Housing Loans disbursement
Years 2008-09 2009-10 2010-11 Amount in Lakhs 667.99 627.47 551.10
Amount in Lakhs
2010-11 30%
2008-09 36%
2009-10 34%
Inference:
The above chart shows the ratio of total disbursement of three years. The total disbursement ratio for three years 2008-09, 2009-10 and 2010-11 was 36%, 34% and 30% respectively.
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Classification based on loan amount 1. Bellow Rs.5 lakh
Loans Below Rs.5 Lakhs

80 70 60 50 40 30 20 10 0 2008-09 2009-10 2010-11 No. of loans given Amount in lakhs
Inference:
According to the above chart the amount of Housing Loan is fluctuating every year from in Rs.68.73 Lakh 2008-09 to Rs.70.19 in 2009-10 and Rs.20.80 in the year 2010-11.
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2. Rs. 5 lakh and up to Rs.10 lakh
Years 2008-09 2009-10 2010-11
No. of loans given 30 34 15
Amount in Lahks 227.96 258.70 115.60
Loans from Rs.5 to Rs.10 Lakhs

300 250 200 150 100 50 0 2008-09 2009-10 2010-11 No. of loans given Amount in Lahks
Inference:
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3. Above Rs.10 lakh and up to Rs.15 lakh Years 2008-09 2009-10 2010-11 No. of loans given 18 19 5 Amount in lakh 241.50 254.36 72.30
Loans Above Rs.10 Lakh and upto Rs.15 Lakh

300 250 200 150 100 50 0 2008-09 2009-10 2010-11 No. of loans given Amount in lakh
Inference:
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4. Above Rs.15 lakh and up to Rs.20 lakh

Years 2008-09 2009-10 2010-11 No. of loans given 3 1 4 Amount in Lakhs 52.43 18.50 75.00
Loans above Rs.15 Lakhs and upto Rs.20 Lakhs

80 70 60 50 40 30 20 10 0 2008-09 2009-10 2010-11 No. of loans given Amount in Lakhs
Inference:
According to the above chart the amount of Housing Loan is fluctuating year 2010-11. every
year from in Rs.52.43 Lakh 2008-09 to Rs.18.50 in 2009-10 and Rs.73.00 in the
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5. Loans above Rs.20 Lakhs

Years 2008-09 2009-10 2010-11 No. of loans given 3 1 10 Amount in lakhs 77.37 25.00 267.40
Loans above Rs.20 Lakhs

300 250 200 150 100 50 0 2008-09 2009-10 2010-11 No. of loans given Amount in lakhs
Inference:
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Findings
Housing loans disbursed for the last three financial years i.e., 2008-09, 200910 and 2010-11 is constant. The percentages of loans disbursed from last three years are 36%, 34% and 30% respectively. SBI Home Loans now offers Interest Rates concessions on Green Homes in accordance with SBI's commitment to Environment protection. Interest rates are very low compared to other private banks and Housing finance institutions. There is no default housing loans from last three years. Competition in the housing finance industry has intensified, especially after banks renewed their trust on this business because of its high yields and low NAPs. Competition has contributed to a sharp decline in housing finance rates and improvement in service. Standards, which in turn has led to expansion of the market. Most public and private sector banks are aggressive in this segment because of the low default rates and longer tenure of the loan which helps keep profitability impact of longer time. For home loans the interest with all banks are nearly the same. But SBI Housing Loans interest rates are very low compared to other banks and HFCs. The SBI interest rate for first year is 8.5%. It will change for second year according to the terms and conditions.
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To effectively market their specialized finance products, housing finance companies are resorting to various segment like employees class, professional class and business. Banks are fast restructuring their business activities. No longer confined to traditional corporate clientele, they are reaching out to individual consumers directly. The most of the borrowers consider the rate of interest and service offering by the institutional to select the institution. The most of the borrowers prefer the mixed rate of interest.
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Suggestions
Though the interest rates are attractive to the customers, they are posing a problem of banks, HFCs, they are not generating adequate return for their shareholders. The regulatory bodies need to streamline their policies and norms so as to come with bold procedure to recover to loans in case of defaults. Bank need to reduce the time taken for sanction of loans i.e., between receive of application and disbursement of loan amount. The bank needed to concentrate on middle income group people and also economically weaker sections. The maximum disbursement of SBI main branch, Bellary is Rs.30 lakh. In recent years the earning capacity and standard of living of Bellary people is rapidly increased. So bank can provide maximum loan amount up to Rs.50 lakh. Changes in advertisement, which appeals to the borrows, would be a positive factor in increasing the market share. As the organization undertakes many fairs, it should continue with this to improve the awareness regarding its new products and schemes launched.
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Conclusion
SBI offers a variety of banking products with its huge network and overseas branches which includes products targeted at Non-resident Indians. The bank is a public sector banking behemoth with the biggest branch network in India. When youre searching for the most affordable home loan interest rates from the market, you should give State Bank of India a thought. State Bank of India home loan interest rates are one of the best rates that are available to you in India The bank offers some unique SBI Home Loan facilities like free personal accidental insurance cover and optional group insurance form SBI Life. The SBI Home Loan offers you the facility to club your income with the income of your spouse and children to get th maximum loan amount. You can also club the expected accountable rent from the mortgaged property to get the correct loan amount.
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BIBLIOGRAPHY: Books Banking theory, law and practice - Gordon & Natarajan 21st Revised Edition Annual Report
SBI Annual Report 2010-11
Internet www.statebankofindia.com www.guide2homeloan.com www.bankbazer.com
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Housing Loan in SBI, Bellary.

HOME LOAN IN SBI

Sree Guru Thipperudra College, Bellary.

Housing Loan in SBI, Bellary.

Title of the study:

Objectives of the study

Sree Guru Thipperudra College, Bellary.

Housing Loan in SBI, Bellary.

Secondary data Bank profile were made use

Limitation of the study

Sree Guru Thipperudra College, Bellary.

Housing Loan in SBI, Bellary.

POFILE OF THE REGION

Housing Loan in SBI, Bellary.

Sree Guru Thipperudra College, Bellary.

Housing Loan in SBI, Bellary.

Sree Guru Thipperudra College, Bellary.

Housing Loan in SBI, Bellary.

PER CAPITA INCOME:

Housing Loan in SBI, Bellary.

Sree Guru Thipperudra College, Bellary.

Housing Loan in SBI, Bellary.

History of Home Loans

Sree Guru Thipperudra College, Bellary.

Housing Loan in SBI, Bellary.

Help for Veterans

Home Loans scenario in India

Sree Guru Thipperudra College, Bellary.

Housing Loan in SBI, Bellary.

bill/electricity bill/ration card).

Housing Loan in SBI, Bellary.

Major Home Loan Providers

Housing Loan in SBI, Bellary.

Bank of Bengal H.O.

Sree Guru Thipperudra College, Bellary.

Housing Loan in SBI, Bellary.

Housing Loan in SBI, Bellary.

Major change in the conditions

Sree Guru Thipperudra College, Bellary.

Housing Loan in SBI, Bellary.

Bank of Madras Note Dated 1861 for Rs.10

Presidency Banks of Bengal

Housing Loan in SBI, Bellary.

Sree Guru Thipperudra College, Bellary.

Housing Loan in SBI, Bellary.

Sree Guru Thipperudra College, Bellary.

Housing Loan in SBI, Bellary.

Dr. Ashok Jhunjhunwala

Shri Dileep C. Choksi

Shri S. Venkatachalam Shri D. Sundaram

Officer Employee Director Director Director Director Director

Sree Guru Thipperudra College, Bellary.

Housing Loan in SBI, Bellary.

Products and Services

Sree Guru Thipperudra College, Bellary.

Housing Loan in SBI, Bellary.

Brief history of the branch

Sree Guru Thipperudra College, Bellary.

Housing Loan in SBI, Bellary.

CONCEPTUAL FRAME WORK OF HOME LOANS Meaning of loan

Meaning of Home Loan

Types of Home Loans

Sree Guru Thipperudra College, Bellary.