Comparing Home Loans From Bajaj Finserv vs SBI – Interest Rates, Processing Fees, and More

Last Updated : March 4, 2023, 12:24 p.m.

A home loan is a type of secured loan acquired to buy a house by offering the asset as security. These loans enable high-value borrowing with affordable rates of interest for considerable durations. Banks offer various EMis options to the borrowers to compensate for the loan amount. After repayment, the borrower gets ownership of the property. However, acquiring a home loan can be challenging, especially with many available options.

Bajaj Finserv and SBI are well-established financial institutions in India that offer home loans. Both institutions have different interest rates, processing fees, and other terms and conditions.

Brief Comparison Between Bajaj and SBI Loan

Some key differences between the two are:

Interest Rates

SBI home loan offers interest rates ranging from 8.80% per annum for women borrowers to 8.85% for others. Interest rates are subject to change as per the RBI’s policy. SBI offers some of the lowest home loan interest rates in the market.

Bajaj Finserv home loan offers interest rates that range from 8.60%. The interest rate offered will depend on the individual’s credit score, income, and other factors. SBI’s interest rates are slightly higher compared to Bajaj Finserv.

Processing Fees

SBI home loan charges a processing fee of up to 0.35% of the loan amount, with a minimum of Rs. 2,000 and a maximum of Rs. 10,000. This fee is charged at the time of application and is non-refundable.

Bajaj Finserv home loan charges a processing fee of up to 0.5% of the loan amount, with a minimum of Rs. 5,999 and a maximum of Rs. 20,000. This fee is also charged at the time of application and is non-refundable.

However, it’s important to keep in mind that processing fees are a one-time charge and may not significantly impact the loan’s overall cost. It’s also important to consider other factors, such as interest rates, eligibility criteria, and loan amount, when comparing home loan offers from different lenders.

Eligibility Criteria

SBI home loan has more stringent eligibility criteria for home loans compared to Bajaj Finserv home loan. SBI has a minimum income requirement and considers the applicant’s credit score, employment history, and income. Along with these, the applicant must have a good credit score, stable employment history, and a steady income to qualify for a home loan from SBI. They also require a minimum income of Rs. 25,000 per month for salaried individuals and Rs. 2 Lakhs per annum for self-employed individuals.

Bajaj Finserv home loan also considers similar factors, but their eligibility criteria are more lenient. They may consider the applicant’s credit score, income, and employment history but may also consider other factors, such as the value of the purchased property.

Loan Amount

SBI offers a higher loan amount for home loans compared to Bajaj Finserv. SBI offers home loans up to Rs. 10 crores for salaried individuals and Rs. 15 crores for self-employed individuals.

Bajaj Finserv offers home loans up to Rs. 3.5 crore for salaried individuals and Rs. 5 crores for self-employed individuals.

Prepayment Charges

Bajaj Finserv home loan has lower prepayment charges compared to SBI home loan. Bajaj Finserv charges 2% on the outstanding loan amount as a prepayment charge. SBI charges 2% as a prepayment charge on the outstanding loan amount if the loan is prepaid within one year and NIL if prepaid after one year.

Tenure

One major difference is the maximum loan tenure offered by each lender. Bajaj Finserv home loan offers a maximum loan tenure of 20 years,

while SBI home loan offers a maximum loan tenure of 30 years. This means that with SBI, borrowers have the option to spread out their loan repayment over a longer period of time, which can potentially result in lower monthly payments. However, it’s important to note that the longer the loan tenure, the more interest you will have to pay in the long run.

Documentation

Bajaj Finserv requires the following documents for home loan application:

1. Identity proof (PAN card, passport, voter ID, etc.)
2. Address proof (utility bill, passport, voter ID, etc.)
3. Income proof (salary slips, ITR, Form 16, etc.)
4. Bank statement for the last six months
5. Proof of business continuity (for self-employed applicants)
6. Property documents (allotment letter, sale deed, etc.)

SBI, on the other hand, requires the following documents for a home loan application:

1. Identity proof (PAN card, passport, voter ID, etc.)
2. Address proof (utility bill, passport, voter ID, etc.)
3. Income proof (salary slips, ITR, Form 16, etc.)
4. Bank statement for the last six months
5. Proof of business continuity (for self-employed applicants)
6. Property documents (allotment letter, sale deed, etc.)
7. NOC from builder/developer (if the property is under construction)

Additional Paperwork

• SBI also requires additional documents, such as the NOC from the builder if the property is under construction, a copy of the sanctioned plan from the local authority, and a copy of the property’s title deed.
• Another factor to consider is the ease of submitting and tracking the status of the documents. Bajaj Finserv has an online portal where borrowers can upload their documents and track the status of their applications, making it more convenient for borrowers. SBI also has an online portal for the same, but the ease of use and the speed of approval may vary.

Other Benefits

SBI offers special home loan schemes for government employees, women, and economically weaker sections. They offer special schemes such as SBI FlexiPay Home Loan, SBI Realty Home Loan, SBI Her Ghar Home Loan etc., with different interest rate structures and features which you can consider based on the requirement.

On the other hand, the Bajaj Finserv home loan offers the option of linking it with a fixed deposit. It can be beneficial for borrowers looking for a lower interest rate.

Conclusion

It’s important to note that these are general comparisons, and exact terms and conditions may vary depending on the individual case. Therefore, it’s always a good idea to compare the terms and conditions of both lenders before making a decision. Additionally, it would help if you also considered other factors, such as the property’s location and the builder’s or developer’s reputation.