SBI offers you a great deal on its personal loan. There you’ll get a loan limit of INR 20 Lakh, an interest rate as low as 9.60% per annum and a loan tenure of up to six years. But do you know about the SBI Personal Loan charges? If not, read this article and know the applicable charges that you need to pay before you get the loan and during the tenure.
Charges You Need to Pay Before Getting an SBI Personal Loan
The bank will charge a non-refundable processing fee from you for an SBI Personal Loan. This is subject to 1.50% of the loan amount. It can be a minimum of INR 1,000 or a maximum of INR 15,000 excluding GST.
You should know that the bank will deduct this fee from your loan account. So if you have applied for INR 6 Lakh, only INR 5.91 Lakh will be disbursed. If you cancel the SBI Personal Loan, you won’t get the processing fee back.
Charge Applicable During the SBI Personal Loan Tenure
A tenure of six years is offered to you for the loan repayment. And in case of non-payment, a penalty charge of 2% will be levied on the due amount. If the due amount hasn’t been paid, the additional interest will keep on increasing and this could result in a poor credit score and huge debt.
Let’s see how the penalty charge is levied on your due EMI amount.
Sanjana is a 30-year old corporate employee who has been paying SBI Personal Loan EMI for the past two years. She has borrowed INR 3 Lakh at an interest rate of 10.99% per annum. Due to some unexpected financial emergency, her account balance goes below the required limit for successful EMI payments and, as a result, EMI bounces. Now the payment has been due for a whole month and she doesn’t know about it until she gets a notification on her registered email address. The next EMI date is near and there already is a due amount of INR 6,521. So, the penalty would be INR 130. And the next payment is also near so she decides to pay the due amount and EMI both at the same time. So now she is spending INR 13,172. You can see how a penalty can disrupt the repayment schedule.
Prepayment Charge of SBI Personal Loan
SBI allows you to prepay the SBI Personal Loan. In this, the borrower has to pay the loan balance in a lump sum. By doing this, the borrower can save the interest payment. But you should know there is a 3% fee for this. So if your loan balance is INR 3 Lakh, you need to pay an INR 9,000 prepayment fee + GST.
In case you’re trying to do prepayment, take care of the prepayment charge while calculating the savings amount. For prepayment, you need a lot of planning and some investment. So, you can put your money in the market and let it grow. So by the time you reach the prepayment date, you’ll have enough money that you can easily pay off the loan balance. Let’s check the example below to know the savings to have with prepayment..
Kashmira has an Loan of INR 15 Lakh with an personal loan lowest interest rate of 15.00% per annum. After regular EMI payments for three years, she decides to prepay the loan. At the end of the third loan year, the balance is INR 9,14,963. She invested her money in mutual funds and other tools and saved enough money to afford the balance loan prepayment.
Formula for calculating total savings post prepayment –
(Total Payable Interest – Paid Interest) – Prepayment Charge
(7,83,661 – 5,56,795) – 13,724
2,26,866 – 13,724
So, Kashmira has saved INR 2,13,142 after the prepayment of the SBI personal loan.