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Several banks in India have rolled out festive loan deals this November, with home loan rates starting at 7.25%. Bank of Maharashtra, Indian Bank, HDFC Bank and Kotak Mahindra Bank have cut rates and reduced processing fees. The final savings still depend on the borrower's profile and the loan terms.
A small gap between two interest rates can change the total repayment by a large amount. A difference of 0.25 percentage points adds nearly Rs. 1.83 lakh in interest on a Rs. 50 lakh home loan. This example assumes a repayment period of 20 years.
BankBazaar.com collected rate data from seven banks on October 23. Bank of Maharashtra offers the lowest starting rate at 7.25%. Indian Bank comes next at 7.35%, and HDFC Bank starts at 7.45%. Kotak Mahindra Bank begins at 7.50%.
A Rs. 50 lakh loan at 7.25% carries a monthly EMI of about Rs. 39,519. The EMI rises to nearly Rs. 40,280 at 7.50%. Borrowers at the higher rate pay around Rs. 761 more every month.
Across 20 years, this monthly gap adds up to almost Rs. 1.83 lakh in extra interest. The figure holds only if the rate stays the same for the full term.
Banks are also trimming fees to draw borrowers during the festive season. Bank of Maharashtra and Indian Bank charge no processing fee on home loans. Kotak Mahindra Bank and SBI give a 50% discount on the fee.
Axis Bank follows a different path with a waiver that covers 12 EMIs. Certain conditions apply to this offer. Borrowers should read the terms closely before treating it as a real saving.
A processing fee of 0.25% on a Rs. 50 lakh loan comes to Rs. 12,500 before GST. A 50% discount cuts this charge by Rs. 6,250.
The festive offers extend to other loan types as well. Indian Bank offers car loans from 7.75%, while HDFC Bank starts at 8.25%. HDFC Bank and Axis Bank both list personal loan rates from 9.99%.
The lowest advertised rate may not reach every applicant. Banks review the credit score, income and existing loans before approving an application. Each of these factors can raise the final rate.
Borrowers should compare the final interest rate, monthly EMI, total interest and extra charges. It also helps to confirm whether the rate stays fixed or changes over time.
A lower interest rate usually saves more over the years than a one-time fee discount. Borrowers who compare offers with care can make the most of this festive season.
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