New Delhi, Mar, 21: State Bank of India (SBI), the largest bank of Asia, has allowed existing home loan borrowers to opt a lower interest rate through conversion of their loan. 

This is an initiatives to get attract customers and at the same time gain from the rising mortgages property if it will attract new customer.

Currently, SBI charges 10.75 % for home loans up to Rs 30 lakh, 11 % for loans between Rs 30 lakh and Rs 75 lakh, and 11.25% for upward of Rs 75 lakh. These rates are comparatively lower than pervious. The teaser rate launched by it in 2009, (13.75 %) interest was charged on the loan amount of 30-75 lakhs.

Now, if existing home loan customer opts for conversion they will save 2 % interest annually on their loan amount. It will reduce the EMI or tenure of loan.

SBI is allowing the conversion to its existing home loan customer with 1 % conversion fee.

SBI has chosen the forgoing from interest income for creating some goodwill which will fruitful in long term.

In the list of SBI customer government and its different office are more in comparison to other banks. Now it is looking to get more customers. Therefore, it has scarifices some profitability.

SBI also wants to become more customers’ friendly lender. It was the first bank to wave the pre payment penalty.