HDFC Home Loan vs. SBI Home Loan: A Comprehensive Comparison

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HDFC Ltd. and the State Bank of India (SBI) are the country’s top banks leading in the housing finance segment. Both have competitive interest rates along with a vast range of home loan products that give a lot of options to choose from. Even if the banks have a few similarities, they have many differences. These differences exist in the loan amount, interest rate, purpose, and other elements. Also, picking a specific bank for your financial needs is imperative since that influences the terms and conditions you will have for your loan.

So, review the section below to compare SBI and HDFC home loans to see which is the best and offers the simplest. Be mindful of the credit score needed for both loans since your credit history will influence your interest rate and terms for the loan. 

A Comparison Between HDFC and SBI Home Loan

Choose the best home loan offer by comparing both banks and seeing which option is most favorable. 

Purpose

The purposes of both financial institutions are different from each other. SBI home loans cater to both self-employed and salaried applicants, and you can use the funds to purchase an under-construction property or an already-built house. The loan is also used for home renovations. On the other hand, the HDFC home loan helps people from all walks of life. They have loans for self-employed and salaried individuals and those catering to agriculturists, farmers, etc. 

Rate of Interest

The SBI home loan comes at an interest rate of 8.60% p.a. onwards. The HDFC home loan comes at 9.15% p.a. to 12.95% p.a. 

Loan Amount and Tenure

The SBI home loan amount begins from Rs. 5 lakh to Rs. 10 crores. The HDFC home loan can be taken up to Rs. 10 crores without any minimum limit. The tenure of up to 30 years is similar for both banks.

Eligibility

The applicant for both the SBI and HDFC home loan should be at least 18 years old, but the maximum age for the former is 70 years old, whereas it’s 65 years old for the latter. 

Processing Fee

The processing fee for SBI’s home loan is 0.35% of the loan amount, along with the service tax. But the minimum fee is Rs. 5,000. In contrast, HDFC charges 0.50% of the loan amount as the processing fee or Rs. 3,000, whichever is higher.

Prepayment Charges

SBI does not charge any prepayment for its home loan. HDFC does not either for individual applicants who have variable interest rate loans. However, there is a 2% prepayment charge for non-individual borrowers and fixed-rate loans. 

Application Process

You can apply for both the SBI and HDFC home loan online or visit the bank and get the process completed. 

Pros 

The HDFC and SBI home loans have various pros that make it easy to accept the offer. Some of the benefits of SBI include the following:

  • Avail the home loan as an overdraft
  • Long repayment tenure
  • Special interest concession for women applicants
  • Competitive interest rates
  • No repayment charges

Some of the benefits of the HDFC home loan include the following. 

  • No hidden charges are involved
  • Long repayment tenure
  • Low interest rates
  • Approval of loan even before selecting the property
  • Lower EMIs for women under special promotional campaign

Cons

SBI implements a minimum loan amount you can take and nothing lower than that. Meanwhile, HDFC has higher interest rates than the State Bank of India. 

Documentation

The documents required for both SBI and HDFC home loans are similar. You need proof of identity, residence, and income for both, but SBI also requires you to have property papers like an occupancy certificate, permission for construction, etc. 

Conclusion 

SBI and HDFC home loans are beneficial in several ways and have competitive interest rates. The documentation required for each of them is also similar, and they have a very smooth process if you have everything in order, including the credit score. You can also use the HDFC home loan calculator to estimate the EMI you will pay and then see whether the interest rate is feasible. However, you can always negotiate the rate with a high credit score. Use your advantage to get more favorable terms, making the repayment process easier. You get the funds immediately after the procedure is completed, and then you can purchase your dream property easily. 

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