State Bank of India (SBI) Personal Loan Interest Rate (May 2020)
|SBI Personal Loan
||Rs. 50,000 to Rs. 15 lakhs
||Rs. 50,000 to Rs. 15 lakhs
||6 months to 72 months
||12 months to 48 months
||1% of the loan amount
||2% to 3% of the loan amount
||3%, allowed after payment of the first 6 EMIs
||No charges, allowed after payment of the first EMI
|Part Prepayment Charges
||Nil, allowed after the EMIs begin
State Bank of India Personal loan is up to Rs. 15 lakhs for salaried and self-employed individuals. The lowest EMI for Rs. 1 lakh is Rs. 1,880. The bank has different loan schemes to fund and meet urgent requirements of borrowers. The loan is unsecured and multipurpose. The bank assures quick and easy approval, superior customer service, special schemes and discounts for the employees of large companies, transparent policies, and other benefits.
Features of State Bank of India Personal Loan
Here are some of the features of personal loans SBI:
- Purpose: The loan can be used for any personal expense such as education of children, medical emergency, travel, home improvement, vacation, wedding, etc. The funds are not for speculative use.
- Rate of Interest: The interest rate ranges from 10.55% to 16.60%. The rates applicable differ as per loan products and types of borrowers (salaried, self-employed, women, entrepreneurs, farmers, pensioners, NRIs, etc).
- Eligibility: The loan is available for both salaried and self-employed individuals. The age limit for applicants is between 21 years and 65 years (58 years for salaried individuals). Loan is available for pensioners as well. In such a case, the age limit is up to 75+ years.
- Top up Loan: The bank offers top up on a personal loan. This is an additional loan that you can take from an existing loan taken from the State Bank. The additional loan is taken on the running loan. For instance, you have a running loan of Rs. 2 lakhs. But, you need Rs. 1 lakh more. In this case, you can opt for a top-up of Rs. 1 lakh on the existing loan of Rs. 2 lakhs. This facility can be also availed during a balance transfer of your loan to the new bank.
If you have a good and regular repayment track record on the current personal loan, then SBI can provide you the top-up facility. Top ups are provided at a similar rate of interest as that on the existing loan. The starting rate on SBI top up personal loans is 10.55%.
- Special Schemes: State Bank of India offers customized schemes and rates for special category of borrowers. These include borrowers working with the government, defense sector, reputed companies, banks, etc. Some of the special schemes are: SBI pension loan, SBI Xpress credit personal loan, State Bank festive loan, SBI Saral loan, Jai Jawan pension loan, etc.
SBI Personal Loan Interest Rates and Charges
Rate of interest depends upon your income, credit profile, CIBIL score, loan amount, employment stability, employer company categorization, and other factors. Along with the standard
personal loan product, SBI offers customized loans to borrowers from different categories.
Here is the rate of interest tabulated for different SBI personal loan products:
||Rate of Interest
|SBI Saral Loan
||17.65% to 17.65%
|SBI Xpress Credit Loan
||11.50% to 13.50%
|SBI Pension Loan
||11.45% to 11.95%
|SBI Festival Loan
||12.50% to 16.60%
|SBI Jai Jawan Pension Loan
||12.45% to 12.45%
Here is a synopsis of SBI personal loan charges:
- Processing Fees: 1% to 3% of the borrowed principal amount. Processing fee is a one-time payment usually deducted from the principal borrowed amount. It is also non-refundable.
- Pre-closure charges: The charges are up to 3% of the prepaid amount. These charges are applicable only if you decide to close the loan before the end of its tenure.
- Part payment charges: Part prepayment is not always allowed. Check with the bank for charges when part-payment is acceptable. Charges if any are applicable only if you plan to prepay a major portion of the outstanding loan amount. Part prepayment is done before the end of the tenure.
- Other Charges:In relevant cases, SBI may apply cheque bounce charges (if EMI cheque bounces), late EMI payment charges (if you delay payment of an EMI), loan cancellation charges (if you cancel the loan after sanction), etc. These terms and conditions are disclosed in the loan agreement.
Illustration of SBI Personal Loan Total Cost
Here is a representation of the total cost of a personal loan SBI:
- Annual Percentage Rate:10.55% to 16.60%
- Borrowed Principal amount:Rs. 1 lakh
- Tenure:6 months to 72 months
- Processing Fee: Rs. 2,000
- Fee to Loanbaba: No fee
- Minimum EMI: For 72 months tenure at 10.55%, the lowest monthly cost (EMI) is Rs. 1,880. The payment includes the principal and interest component.
- Maximum EMI: For 6 months tenure at 16.60%, the highest monthly cost (EMI) is Rs. 17,483. The EMI consists of the principal as well as the interest portion.
- Total Interest Payout for the Entire Tenure: For 72 month period, the total interest payout is Rs. 37,360. For 6 months tenure, the total interest payout is Rs. 6,897.
SBI Personal Loan Interest Rate Calculation
You can expect the best rate on personal loan from the bank subjected to an assessment of your income, existing EMIs, loan amount, tenure, and other factors. Below-given are some of the conditions that help SBI to determine the rate to apply on the loan:
- Income: Your income defines your ability to afford the EMIs and repay the loan. If you belong to a higher salary or income bracket, then it is easier to negotiate for a lower rate of interest. The rate offered by the bank depends on your net monthly income if you are a salaried person. If you are a self-employed person, then your annual income will be looked into.
- Loan Amount: You can borrow between Rs. 50,000 and Rs. 15 lakhs. If you choose a higher loan amount, the applicable interest rate could be lower than that on a lower loan amount. However, a lower loan amount also reduces your financial liability. Compare the need for the funds and the associated costs to finalize the loan amount you wish to borrow.
- Loan Tenure: Repayment period for State Bank personal loan is between 6 months and 72 months. Majority of the loan schemes come with a maximum of 48 to 60 months tenure. A longer tenure may apply a lower rate, and vice-versa. Understand your repayment ability before choosing a particular tenure. Shorter tenures will help you save significantly on the interest payout.
- Repayment Capacity: Before sanctioning the loan, SBI will determine your repayment capacity as a borrower. The bank will go through your credit profile and credit score. Doing so will allow the bank to check your current and previous repayment track record on loans. Your credit history will also reflect details of credit card bill payments. Higher your credit score better would be the chances of getting a lower rate of interest.
- Reputation of the Employer: Almost every bank maintains an internal list of companies. The companies are categorized on the basis of ranking from high to low. The ranking in turn is on the basis on the company’s existing relationship with the bank, the organization’s reputation, and size. If you work for an employer from a higher-ranked category, then chances of getting a better rate and discount are also higher.
- Relationship with SBI: The bank may provide special offers, charges, and rates to existing account holders or to those who have made timely repayments on previous loans with the bank.
Types of SBI Personal Loans
State Bank of India offers customized personal loans for specific customer segments. These financial products are designed to meet the needs of particular borrowers. Features of these products are given below:
1. SBI Saral Personal Loan
This loan is available for salaried and self-employed individuals for personal expenses such as medical treatment, wedding, foreign or domestic travel, etc. The salaried individuals should be working in a reputed corporate house. The self-employed individuals include architects, doctors, engineers, MBA-degree holders, and Chartered Accountants. They should have a minimum work experience of 2 years to apply for the SBI Saral loan.
Age of the applicant should be between 21 years and 65 years (58 years for salaried individuals).
Minimum monthly income of the applicant is Rs. 5,000.
Loan amount is between Rs. 24,000 and Rs. 15 lakhs.
The loan amount provided depends on the borrower’s repayment capacity and income.
Tenure is up to 48 months. No requirement of security or mortgage of collateral.
2. SBI Xpress Credit Personal Loan
This is a special loan for the employees of Central PSUs, Quasi government, state and central government, Educational National Institute, profit making state PSUs, and a few companies. The personal loan helps them to fulfil cash requirements for a family vacation or medical emergency.
There is no need for security or collateral. The loan is available as an Overdraft facility on an existing account or term loan.
Age of the applicant should be between 21 years and 58 years.
Loan amount available is between Rs. 25,000 and Rs. 15 lakhs
Minimum monthly income to avail the funds is Rs. 5,000.
Maximum tenure is 48 months.
3. State Bank Festival Loan
SBI festival loan is specially catered during the festival season. The funds can be taken to meet any personal requirement. The borrower’s income and repayment capacity are considered to decide the eligible loan amount. Age of the applicant should be between 21 years and 58 years.
The loan is available for employees of PSUs, government, private limited companies and public sector firms making profits, etc. The loan is also provided to self-employed individuals with at least 2 years of work experience. It is also available for individuals with other sources of income such as pension, interest from government securities/NSCs/TDRs, etc.
Minimum monthly income eligibility is Rs. 3,000.
Loan amount available is Rs. 5,000 to Rs. 15 lakhs
Maximum tenure for repayment is 60 months.
4. SBI Pension Loan
State Bank pension loan is for government pensioners to fulfil urgent financial needs for travel, medical expense, or a family obligation. The funds are available for personal expenses of all the government pensioners who get their pension credited to SBI bank account. So, pensioners who work for Defense, State, or Central government and withdraw pension from SBI can apply for the personal loan against pension.
The pensioner should not be over 76 years of age.
Borrowing amount is up to Rs. 15 lakhs.
The pension should come via cheques from the government treasuries.
No processing fee is applied for defense pensioners.
Tenure is maximum 60 months.
5. Jai Jawan Pension Loan
This type of loan is available for young para-military and defence forces pensioners. The funds can be taken for personal expenses such as travel, medical treatment, wedding, etc. This loan is available for the mentioned individuals who get pension in their SBI account.
Borrowing amount is up to Rs. 15 lakhs.
For loans up to Rs. 25,000, there is no need of security.
Jai Jawan loan is for the said individuals not more than 50 years of age.
Maximum tenure is 60 months for repayment.
Frequently Asked Questions about SBI Personal Loan Schemes and Rates
Here are the FAQs on State Bank of India personal loan interest rate and scheme:
Firstly, check the eligibility criteria for SBI personal loan, including the offered rate of interest. If you meet the criteria in terms to income, age, and credit score, you can expect the best rate for the loan. The greater is your repayment capacity, more flexible are the terms for the loan.
If you have ongoing loans, try to close them soon. This will leave you with a higher disposable income. With this disposable income, you can easily manage the EMIs, and repay the loan sooner. You can also adjust the tenure of the loan to make the EMIs affordable.
Tenure of a loan influences its total cost. The other two important factors that influence the total interest payout on a loan are: the interest rate and loan amount. All these three factors account for the EMI calculation. A shorter tenure leaves you with a lower interest payout, so the total cost of the loan is lower as compared to EMIs on a longer tenure.
Choose tenure as per your repayment ability.
If you can repay sooner, then definitely opt for a shorter tenure. This will save you the most on the total loan cost.
If you want to pay smaller EMIs, then choose a longer tenure. But, this may increase the total cost of the loan.
It is advisable to borrow only an amount that you are capable of repaying, and that which you need. Do not borrow an amount that is over and above your requirement. As you need to pay an interest on the principal borrowed, additional borrowing will only increase the cost.
So firstly, determine your need for the funds – what is the requirement? What is the minimum and maximum amount needed to fulfil this requirement?
Can you arrange funds from interest-free sources to reduce the borrowing amount? All these calculations will help determine the total borrowing amount you need.
To get the lowest offered interest rate on a personal loan, you must have a great repayment record. This means, your credit score should be good. Preferable CIBIL score for personal loans is 750+. With a good CIBIL score, you can expect a desired loan amount and rate of interest. You should also have a good repayment capacity to convince the lender for the best possible rate.
Unavoidable charges include the processing fee. Besides that, the charges apply on late payment, loan cancellation, cheque bounce, etc. These are usually the penalties. To avoid penalties, you must not do anything that attracts these charges.
For instance, pay EMI on time to avoid late payment charges.
Keep enough balance in your account so that the cheque does not bounce. This way, you do not have to pay the cheque bounce charges.
Remember that penalty charges will ultimately raise the total cost of the loan. So, avoid actions that could penalize you.
Pre-closure of a personal loan is closing the loan before the tenure’s end. It does help you to save on the interest payout. If you continue to repay until the end of the tenure, then the interest payout paid will be higher than that on pre-closure. However, apart from the outstanding amount, you need to bear pre-closure charges as well. Look for these charges before you decide to pre-close the loan. The pre-closure charges are up to 3% of the amount you pay.
It is important to understand the type of personal loan you need before you compare the rates. Most of the personal loans are unsecured in nature. These attract a higher rate of interest compared to secured loans. This is because; there is no collateral that SBI needs to disburse the funds. Under unsecured personal loans too, the State Bank of India has different schemes.
Each scheme carries different rates of interest. So, understand which loan product you want and are eligible for, and then compare the rates.
Not only the interest rates, you should also compare the other applicable charges to derive the total cost of the loan.
State Bank of India has lucrative rates and offers on balance transfers. So, if you have an ongoing personal loan with another bank, then you can get it transferred to SBI. The rate applicable could be similar to that on the ongoing loan with the old bank. The starting rate of interest for balance transfer is 10.55%. Also, you could be eligible for additional benefits, including superior customer service. Thus, opting for balance transfer to SBI is a good choice.
Debt consolidation is when you take a single loan to repay existing loans. This is usually done when the interest payout on the new personal loan is lower than the collective interest payout on the existing loans you intend to repay. So by opting for a debt consolidation, you can save maximum on the interest payout. Also, you have to remember to pay just one EMI per month rather than keeping track of multiple EMIs on different loans. A debt consolidation thus makes the management of debts easier and simpler.
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