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Why SBI personal loans are better than those of other banks

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Personal loans are, sometimes, vilified as expensive loans that charge a high interest rate. Financial experts would say pledge an asset, such as gold, shares or mutual funds, and go for cheaper secured loans.

There is merit in their advice.

And yet, life emergencies and sudden expenditures don’t come often come with warnings. You may/may not have assets to pledge. In such a scenario, a personal loan can be, quite literally, a life saviour.

What you should do, however, is carry out the necessary research and make an informed choice to get a personal loan with the best possible conditions.

It is here that the State Bank of India (SBI) – the largest lender in the country – scores several advantages over other banks, especially large private banks.

Get offers of SBI personal loans from Rs 25,000 to Rs 20 Lakh, depending on the borrower’s need and eligibility. Certain special personal loan schemes, such as the Xpress Elite Credit, offer loans up to Rs 35 Lakh also.

The borrower’s monthly income can be as low as Rs 15,000, but he/she does need to have a good credit score: 750 or above.

Also, borrowers must be Indian nationals in the age bracket of 21 to 58 years.

Advantages of SBI Personal Loans

  1. Lowest Interest Rate and EMIs

SBI is known for offering personal loans at the lowest interest rates available in the market. According to the bank’s website, effective November 15th, 2022, the lowest SBI personal loan interest rate with no reset charges is 10.65%.

Contrast this with the lowest interest rate on HDFC personal loans, which is 11%. While the difference may seem small, it will have a substantial effect on your equated monthly instalments (EMIs) if the loan amount is large.

Not only that – the upper limit of the interest rate charged by SBI on personal loans hovers around 15%, while in case of HDFC, it can go up to 21%.

  1. Low Processing Fee

Most big private banks charge a higher processing fee on personal loans. Comparatively, the maximum processing fee that SBI charges is 1.5% of the loan amount plus taxes.

In comparison, the processing fee levied by HDFC Bank is 2.5% of the loan amount plus taxes, subject to a maximum of Rs 25,000 for salaried customers. ICICI Bank, too, charges a processing fee of 2.5% of the loan amount plus taxes.

  1. Low Penal Interest

SBI does not levy any penal interest for loans up to Rs 25,000.

For Loans above Rs 25,000, if the non-payment exceeds the borrower’s EMI for a period of a month, penal interest is charged at 2% p.a. on the overdue amount for the period of default. This is in addition to the applicable interest rate.

However, there is no penalty if only a part of one’s EMI remains overdue.

  1. Low Pre-payment Fee / Foreclosure Charges

A foreclosure or prepayment penalty is the amount that a lender charges you for closing your loan before the due tenure. This is because the bank stands to lose money in such a case as lesser interest amount would be paid.

If you decide to go for partial or complete preclosure of your SBI Personal Loan, you will be charged 3% + taxes on the amount prepaid as SBI personal loan prepayment fee. However, this penalty is levied only if the loan is closed within 2 years from the date of disbursement.

Equivalent charges for HDFC Bank can go up to 4%, while for ICICI Bank prepayment charges are levied at 5% + taxes.

Another advantage with SBI personal loans is that if you plan to prepay/foreclose your loan by taking a new personal loan under the same scheme, no preclosure charges are levied.

  1. A Variety of Schemes

SBI offers a variety of personal loan schemes. Here’s a quick look at their offering bouquet and the SBI personal loan interest rate for various schemes:

S. No. Loan Scheme For Whom? Effective Interest Rate with no Reset
1. SBI Quick Personal Loan Loans to salaried customers not maintaining salary account with SBI Starts at 10.65%
2. Pre-approved Personal Loans on YONO app For SBI customers Starts at 10.65%
3. SBI Xpress Credit For salaried individuals with salary accounts with SBI 10.65% to 12.15%
4. SBI Xpress Elite For SBI’s salaried customers with monthly incomes of Rs 1 Lakh or above 10.65% to 12.15%
5. SBI Pension Loan For pensioners below 76 years of age with pension order maintained with SBI 10.80% to 11.30%
6. Real-Time Xpress Credit Digital loans to Defence/Government salary package customers Starts at 10.65%



SBI Personal Loan Apply Now: How to avail of these schemes?

SBI Quick Personal Loan

Loans up to Rs. 20 Lakh with minimal documentation, no hidden costs, provision for second loan, and no security or guarantor.

Documents Checklist:

  • Income Tax Return (To be uploaded on CLP)
  • Bank Account Statement of last 6 months (To be uploaded on CLP)
  • 2-passport size photographs
  • Latest month Salary Slip
  • Proof of Identity & Current/ Permanent Address, as per Bank’s KYC guidelines

Pre-approved Personal Loans on YONO:

  • Login to YONO
  • Click on Avail Now
  • Select Tenure & Amount
  • Enter OTP -> Amount Credited

SBI Xpress Credit

Loans up to Rs. 30 Lakh with minimal documentation, no hidden costs, provision for second loan, and no security or guarantor.

SBI Xpress Elite

Loans up to Rs. 35 Lakh with minimal documentation, no hidden costs, provision for second loan, and no security or guarantor.

SBI Pension Loan

Pensioners below 76 years of age with their pension accounts at SBI can fund their child’s marriage, buy a home, finance a trip or seek medical aid with this scheme. Minimal documentation, no hidden costs. Customers can apply at the nearest SBI branch.

Real-Time Xpress Credit

Key features include:

  • Aadhaar OTP based e-signature of customer
  • Step-by-step guided e-mail and SMS communication
  • Digitization of the entire loan documentation process, i.e., loan application, loan agreements, stamping and signature
  • Instant loan disbursement
  1. Longer loan tenure

The loan tenure for SBI personal loans is 6 to 72 months. Meanwhile, the loan tenure for large private banks like HDFC Bank and ICICI Bank is 12 to 60 months. This means that you have an extra year to repay your SBI personal loan as compared to a personal loan taken from HDFC or ICICI.

On the flip side, SBI can take longer to process your loan application and grant the final approval. However, considering the many advantages that come with SBI personal loans, it is only a minor inconvenience.

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