Comparing SBI and PNB Home Loans: Which one offers the best terms and rates?

Last Updated : March 3, 2023, 3:44 p.m.

When buying a home, one of the most important decisions you’ll need to make is choosing the right home loan. With so many options available in the market, it can be challenging to know which is best for you. In this article, we’ll look closely at two of India’s most popular home loan options: the SBI home loan (State bank of India) and the PNB home loan (Punjab National Bank).

SBI or PNB, which one is better?

These are some of the most reputable banks, holding a strong presence in our country. However, some key differences between the two may make one a better choice for certain borrowers.

We’ll compare the interest rates, processing fees, and other terms and conditions each bank offers to help you decide which option is better.

Interest Rates

One of the biggest differences between SBI home loan and PNB home loan is the interest rate. Interest rates are one of the most important factors when choosing a home loan. The interest rate determines how much you’ll pay in interest throughout the loan and can greatly impact your monthly payments.

As of 15 Feb 2023, SBI home loan have interest rates starting at 8.80% for women borrowers and 8.85% for others. These rates are among the lowest in the market and can help you save money.

On the other hand, PNB home loan have interest rates starting at 8.80%. While these rates are still competitive, they are slightly higher than SBI’s. It means you’ll pay more interest throughout the loan, which can add up to a significant amount of money.

Comparing interest rates, SBI is a better choice for borrowers looking for a lower monthly payment. The interest rate is crucial when choosing a home loan, as it determines the amount of money you will have to pay each month towards your loan. A lower interest rate means a lower monthly payment, making it easier to manage your finances.

Processing Fees

Another important factor to consider when choosing a home loan is the processing fee. Processing fees are the most important and clear fee charged on home loans. It is a fee you have to pay banks to deal with your home loan application. It is a one-time fee usually paid upfront – that is, you must pay it out of your pocket to the bank instead of deducting it from your loan amount. Some banks may call it an administrative fee.

SBI home loan charges a processing fee of up to 0.35% of the loan amount, which is one of the lowest in the market. It means that if you’re taking out a loan of Rs. 50 lakhs, the processing fee would be just Rs. 17,500. PNB home loan charges a processing fee of up to 0.50% of the loan amount. It is slightly higher than SBI’s fee and can add up to a significant amount if you take out a large loan. For example, if you’re taking out a loan of Rs. 50 lakhs, the processing fee would be Rs. 25,000.

Loan Amount

When choosing a home loan, it’s important to consider the maximum available loan amount. SBI offers a higher loan amount than PNB.

SBI home loans offer up to 90% of the property value for salaried individuals and up to 85% for self-employed individuals.

On the other hand, PNB home loans offer up to 80% of the property value for both salaried and self-employed individuals. SBI may be a better choice for borrowers purchasing a more expensive property. The loan amount can be very important when considering a home loan, as a higher loan will give you more buying power, allowing you to purchase a more expensive property.

However, it’s important to note that the maximum loan amount will depend on your financial situation and creditworthiness.

Repayment options

Both banks offer flexible repayment options, with loan tenures ranging from 5 to 30 years. SBI home loan offers the option of a floating rate home loan, which can be beneficial for borrowers who want the flexibility to make prepayments without penalty. PNB home loan , on the other hand, only offers fixed-rate home loans.

Loan Tenure

The loan tenure is another important factor to consider when choosing a home loan, as it determines the time you will have to pay off the loan. A longer loan tenure will give you a lower monthly payment, but you will pay more in interest over the life of the loan. A shorter loan tenure will give you a higher monthly payment, but you will pay less in interest over the life of the loan.

Processing time

Regarding processing time, SBI is known for the quick and efficient processing of SBI home loan applications. PNB, on the other hand, has a reputation for being slower in processing PNB home loan applications. It can be important for borrowers looking to buy a property quickly, as a slower processing time can delay the purchase.

Easily access banking services

SBI also has a wider network of branches and ATMs across the country, which can benefit borrowers who need to visit a branch or ATM frequently.

PNB also has a large branch network but is less widespread than SBI. It can be important for borrowers who live in a remote area, as a bank with a wider branch network will give you more access to banking services.

Additional Services

Both banks also offer additional services and benefits for home loan borrowers. SBI offers a range of online services, including the option to apply for a home loan online and track the status of the application. PNB also offers online services, but the options may not be as extensive as SBI.

Conclusion

SBI home loan and PNB home loan are solid options for home loans. SBI is a good choice for borrowers looking for a lower interest rate and a higher loan amount, while PNB is a good choice for borrowers who prefer a fixed-rate loan and have a faster processing time. Both banks have a range of additional services and benefits, so borrowers should consider their specific needs and preferences when choosing a home loan.