Compare HDFC vs. SBI Home Loans: Which is Right for You?

Last Updated : March 3, 2023, 3:25 p.m.

When choosing a home loan, there are many factors to consider. Two of the most popular options in India are HDFC home loan and SBI home loan , which have a wide range of home loan products to choose from. This article will look at HDFC home loan and SBI home loan and help you determine which one best suits your needs.

Comparison Between HDFC and SBI Loans for Home

Here is a detailed comparison between HDFC and SBI loans for a home that you should consider before selecting any option.

Interest Rates:

The interest rate is one of the most important factors to consider when choosing a home loan. The interest rate determines the amount of money you will have to pay over and above the principal loan amount. HDFC home loan currently offers interest rates starting at 8.65% per annum, while SBI’s home loan interest rates start at 8.85% per annum.

Both banks offer interest rates lower than the industry average, but SBI home loan rates are slightly higher than HDFC home loans . It’s worth noting that interest rates are subject to change based on market conditions, so you should always check the current rates before applying for a loan.

Eligibility:

Another important factor to consider when choosing a home loan is your eligibility. Eligibility criteria vary from bank to bank, and it’s important to ensure that you meet the requirements before applying for a loan. HDFC home loan and SBI home loan have similar eligibility criteria, some of these are:

• Certain Documentation
• Minimum age of 21 years
• A stable source of income.
• A good credit score.

However, HDFC may be more lenient regarding credit score requirements, as they have a lower cutoff than SBI.

Loan Amount:

The loan amount that you are eligible for will also play a role in determining which home loan is best for you. HDFC home loans offer loans up to Rs. 10 crores, while SBI home loans offer loans up to Rs. 50 crore. If you are looking for a larger loan, an SBI home loan may be a better option. However, it’s important to remember that the larger the loan amount, the higher the interest rate.

Loan Tenure:

The loan tenure is another important consideration when choosing a home loan. The loan tenure is the period you will repay the loan. HDFC home loan offers tenures of up to 30 years, while SBI offers tenures of up to 30 years.

Additional Features

HDFC home loan offers a partial pre-payment facility

The Partial Pre-Payment Facility offered by HDFC for its home loans allows customers to make partial pre-payments towards their loan without any charges.

It means you can pay off a portion of your loan before the due date without incurring additional fees or charges. This feature can be useful if you have extra money and want to reduce your loan burden.

The process of making a partial pre-payment is simple. You must inform the bank of your intention to pre-pay and the amount you wish to pay. The bank will then adjust the outstanding loan amount and the corresponding EMIs.

Benefits

• This feature can be particularly beneficial for stable-income customers who want to reduce their loan burden.
• Pre-paying a portion of the loan can help to reduce the overall interest paid on loan and the loan tenure.
• It can also help improve your credit score , as it shows that you are managing your debts responsibly.

It is important to note that some banks might have a cap on the amount of pre-payment you can do, so you should check with your bank for their specific terms and conditions.

In summary, HDFC’s Partial Pre-Payment Facility is a useful feature that allows customers to make partial pre-payments towards their home loan without any charges, which can be beneficial for those who have extra money and want to reduce their loan burden.

SBI home loan offers a Balance Transfer facility

SBI’s Balance Transfer facility allows customers to transfer their existing home loan from another bank or financial institution to SBI at a lower interest rate. This feature can be useful if you currently pay a high-interest rate on your existing home loan and want to reduce your monthly payments.

The process of transferring your home loan to SBI is fairly simple. You will need to provide SBI with your existing loan details, including the outstanding loan amount, the interest rate, and the remaining tenure. SBI will then evaluate your application and, if approved, will disburse the loan at the new, lower interest rate.

Benefits

• The main benefit of SBI’s Balance Transfer facility is that it can help you save money on interest charges over the life of the loan.
• A lower interest rate means your monthly payments will be lower, which can free up money for other expenses.
• It can also help improve your credit score, as it shows that you are managing your debts responsibly.

It’s important to remember that some charges might be associated with a balance transfer, such as processing fees, legal charges, and appraisal fees. You should check with your bank for their specific terms and conditions.

In summary, SBI’s Balance Transfer facility is a useful feature that allows customers to transfer their existing home loan from another bank or financial institution to SBI at a lower interest rate, which can help you save money on interest charges over the life of the loan and improve your credit score.

Conclusion

In conclusion, HDFC and SBI offer competitive home loan options. However, the best option for you will depend on your specific needs and circumstances. If you are looking for a lower interest rate, an HDFC home loan may be a better option. An SBI home loan may be a better option if you are looking for a larger loan or a longer loan tenure. Additionally, the additional features offered by both banks should be considered when deciding. Ultimately, comparing the offers is highly recommended as finding the best one that suits your needs.