Special home loan scheme or teaser loan scheme of SBI has finally been extended till 30th April 2010.
The bank has however discontinued the teaser loan offer for loans below Rs. 50 lakh. The bank, though had decided that it would be extending its special home loan offer beyond 30th March 2010 had not made any formal announcement of the tenor of extension of these loans.
The scheme so suggests that all home loans would be charged an interest of 8% in the first year, 9% for the second and third years and thereafter the rate would be a floating one depending on the market scenario. The loan rate has been hiked for loans amounting less than Rs. 50 lakh for a 20 year period.
The bank is currently offering two home loan products namely SBI Advantage and SBI Easy.
The earlier tenor of the loan till March 31st, 2010 has been extended mainly due to sluggish credit growth still persistent in the country. SBI itself has close to Rs. 50, 000 crore excess funds yet to be disbursed. The rate is expected to continue till the base rate season sets in.
Officials further had reported that these teaser home loans have helped in the growth of the retail lending book of the bank.
SBI is the first bank to have launched the special home loan schemes in February 2009. Other banks had followed suit with SBI. Now the plan to extend this scheme might also be followed by other banks.