SBI offering 9.4 for Home loan.Should I accept?

[starfirefreefilly]

UPDATE ON THE SITUATION: One Person in the comments gave alink to ROI pdf for SBI,showed the same to bank.They were acting like they dont know abt it.Later in the day Manager called me and said he will make sure the ROI is 8.6.!!!!!! Thanks Guys.I love reddit people.

ORIGINAL POST : Salaried Person without any credit history.Bank Manager said I will get home loan for 8.9 max.Spent almost 60k for paperwork.When it got approved they are saying it is 9.4.Is there any way to negotiate?
Loan details: 25 Lakh for 30 Years.

Present Repo Rate (a) --->6.5%
Common Spread (b)----> 2.65%
External Benchmark Rate (EBR) c=a+b --->9.15%
Credit Risk Premium (d) ----> 0.3%
Business Strategy Discount (BSD) (h)--->0.0%

Effective Rate -----> 9.45

 

[cgaviria]

@starfirefreefilly You might want to ask around different PSU banks to check interest rates. More than 8.75 seems a bit too much for a home loan I believe.

 

[starfirefreefilly]

@cgaviria I am living in an urban area.For me SBI is the most viable option.Hence I need to know weather anyway negotiate this interest rate..But ya i will check with other banks.

 

[slowbie]

@starfirefreefilly 60k for paperwork? Isn’t that too much . For which things u paid ?

 

[starfirefreefilly]

@slowbie 30k in panchayath mainly for permit.Rest for engineer,bank lawyer ,valuation etc..

 

[slowbie]

@starfirefreefilly Oh got it now.

 

[maybelle]

@starfirefreefilly Wait... I am getting it for 8.5 .. and 30 k for paperwork.. he is gonna eat your interest as commission.

Threat him like you are going to other bank..

 

[marthaschramm]

@maybelle SBI employees do not get any commission

 

[bla1958]

@starfirefreefilly My recommendation is to get the

-LOWEST POSSIBLE EMI (MOST IMPORTANT), then

• use this low emi as a benefit to increase your earning.
• keep 6 months's worth of EMI payments in the loan amount. You never know when you're out of a job. I plan to keep 1yr worth of EMI but that's because I am paranoid, but I also take any opportunity I can to earn some guaranteed returns (think prepaid sales or gold when it's at the lowest price of the year. This is not risk free and should not be done unless you're kind of sure about what you're doing. I'm not greedy about these returns and my risk appetite is mid)
• try your best that you're earning SOMETHING from the home itself. The ASSET you purchase SHOULD ideally earn you something.

Too long/didn't read: lowest emi + focus on increasing income earned = ability to pay off loan quick/spend money on yourself. Both are good and important goals

 

[starfirefreefilly]

@bla1958 Read full.Thanks for the tips.I liked how u think and plan.

 

[beebert]

@starfirefreefilly You can check the ROI rate card here

9.4% is for someone with credit score of 650-699. You mentioned you don’t have any credit history, but do you have some score? For Nil score you should have got a better rate.

If your PAN shows a score then SBI can give only the rate available on this rate card. Maybe use the OneScore app and verify your credit score.

 

[starfirefreefilly]

@beebert Seems like there is a campaign offer going on and they are not giving it to me.Let me check with manager.Thanks for the info bro.

 

[starfirefreefilly]

@beebert Thanks Brother .You saved me.Showed the same link to Bank people and manager told me he will make changes so that I will get for 8.6 Interest rate.

 

[beebert]

@starfirefreefilly Nice! That's really good to hear!

 

[cassandrajakes]

@starfirefreefilly get a cheap entry-level credit card, and keep the utilization under 30%. Under 2 months your credit score will be 775+.

Also, when you start your loan and keep paying EMIs on-time, your CIBIL score automatically improves over a few months. At that point, you can always talk to the bank to readjust your interest rate and your EMIs based on your new CIBIL score. These loans are floating-interest rate based loans, and so the numbers change over time.

Banks are lazy to readjust rates because that might be a potential revenue loss. But it's your right to always demand it back.

 

[xmudpuddle]

@starfirefreefilly Scout around for rates. Not sure why you spent 60K for loan paperwork.

Approach other banks. Once you have an offer in hand - that is to your liking. Then tackle the bank from whom you want to take the loan. Preferably a bank with whom you have a relationship.

 

[nagamorningstar]

@starfirefreefilly Hey, I'm still young have little knowledge about loans and all but I'm pretty sure 25 Lakh loan @ 9.4% for 30 years is a lot. I mean isn't the duration (30 years) too much?

 

[starfirefreefilly]

@nagamorningstar Salary is 40k hence i had to take 30 but planing to close early..

 

[nagamorningstar]

@starfirefreefilly Ohk, got it.

 

[aamyggirl]

@starfirefreefilly Is this loan for buying or constructing?