SBI Flexipay Home loan makes you eligible for a greater loan, It gives you the flexibility to pay lower installment during initial 3-5 years. This variant of SBI home loan is very useful for young earners. This innovative loan product of SBI can again start a war among home loan lenders. The SBI Flexipay home loan has the potential to lure a large section of home loan buyer towards the State Bank Of India.
Features of SBI Flexipay Home Loan
Greater Loan Amount
You can get greater loan amount through the SBI Flexipay Home Loan . The banks give home loan according to the loan to value ratio. Loan to value ratio is the percentage of total value of mortgaged property.
Indeed, you do not get the loan for the total value of the property. If the value of a property is 50 lacs, the loan amount would be less than Rs 50 lacs. The RBI has fixed a loan to value ratio of the home loan. It goes up to 90%. For the loan amount of above Rs 30 lacs it is 80%. It means for a property of Rs 50 lacs, you would get the loan upto the 40 lacs.
But, in the case of SBI Flexipay Home loan, You can get more loan than the fixed loan to value ratio. You can get 20% more loan than the maximum amount in a normal course.
In the above example, you would have got up to Rs 40 lacs. But, by going through the SBI Flexipay Home loan, you would get 20% more of the 40 lacs. It makes the maximum loan amount Rs 48 lacs.
This relaxation would make many young a person eligible for the home loan. In the earlier scenario you would have to save at least Rs 10 lacs to buy a property of 50 lacs.
Because of the SBI Flexipay Home loan, you don’t need to worry about the down payment. A small down payment can also fetch a large home loan.
Less EMI in Initial Years
The SBI Flexipay Home Loan gives another facility to you. You can also opt for lower EMI in the initial 3-5 years. The SBI has given the option to pay the interest only during initial 3-5 years.
A loan EMI has two parts. The principal and interest amount. The SBi is giving you relaxation to pay the principal. The payment of principal can be started after 5 years.
However, you should not expect a big discount because of this relaxation. In the initial years, the interest part is high and principal part is low.
Benefits Of SBI Flexipay Home Loan
The SBI Home Loan Flexipay is beneficial in following ways
- You don’t need big margin money (Down Payment).
- You can get a loan of a higher amount.
- You can go for a bigger house.
- Initially, you can pay low monthly installments.
- You don’t need for greater saving and higher salary to buy a suitable home.
- You can go for the prepayment of the home loan without any penalty.
Terms And Condition of SBI Flexipay Home Loan
SBI Flexipay home loan is not available to everyone. It comes with some terms and conditions.
To get SBI Flexipay home loan, your age should be between 21 to 45 years. The loan is not available for older people.
You should have minimum 2 years of service to get this loan. It assures that your service is relatively stable.
The loan amount should be more than or equal to Rs 20 lacs. The loan is designed for high paying individuals.
The SBI Flexipay home loan is only for the salaried people. The self-employed or business people can’t enjoy this benefit. The bank sees more risk with their income.
Is SBI Flexipay Home Loan Suitable For You
SBI Home loan is an innovative loan product. It is definitely a very good plan for a certain section of borrowers. It suitable for you –
- If you want a greater home loan but your current savings is not sufficient for the margin money.
- If you need a house currently but the EMI is unaffordable.
- If you want a bigger house but the EMI of Home loan is beyond your monthly saving.
- If you have a stable (particularly government) job.
Risk of SBI Flexipay Home Loan
The SBI Flexipay Home loan gives you extra benefits. But there are some risks associated wit it. You must assess these risk before opting for this home loan scheme.
- Greater loan amount means greater EMI. Once the ‘interest only’ period ends your EMI will jump higher.
- Your loan outstanding will remain same till the ‘interest only’ period because you pay only the interest.
- If your salary does not increase as anticipated, you might find yourself in a debt trap.
- If you loose your job, the home loan would be a bigger burden.
- If interest rises in subsequent years, you would not have much scope to increase the loan period.
- In case interest rises during the ‘interest only’ period, your interest payment would also increase.
- If the interest rate rises, the EMI after the ‘interest only’ period would be much higher. It may become unaffordable.
How Does SBI Flexipay Home Loan Work?
The SBI Flexipay has two big features. It gives you more loan than you have got through the regular SBI home loan. Along with it, you can pay a reduced EMI during initial 3-5 years.
So, during the interest only period, You give simple interest per month to the SBI. The calculation SBI Flexiplan Home Loan is very simple.
- Interest = Loan amount x interest rate
- 100
But because of the ‘interest only’ during initial 3-5 years, the outstanding balance remains same throughout these years. After the interest only period, the outstanding loan amount would be the same original loan amount.
Once, the moratorium period (interest only period) ends, the repayment of loan starts as any other regular loan. The SBI has not given much clarification on this. Following is the text from SBI website.
To neutralize the impact of such additional loan on monthly EMIs, customers have the option of paying only interest during the moratorium (pre-EMI) period, and thereafter, pay moderated EMIs. The EMIs will be stepped-up during the subsequent years.
Therefore, we can presume that after the ‘interest only’ period, the SBI Flexipay home loan will act as any other regular home loan.
Since, the home loan outstanding remains intact during moratorium and you have less time to pay the loan, the EMI increases.
In a Flexipay home loan of 20 years, if you avail the moratorium of 5 years then EMI after 5 years would be the equal to a 15-year regular home loan.
To moderate the enhanced EMI after 5 years, you can opt for the longer tenure of 25-30 years loan payment. However, customers will be free to make prepayments without any penalty.
How To Apply SBI Flexipay Home Loan
Do you want the SBI Flexipay home loan? You can easily avail this facility.
But before that, please go through the eligibility condition of this loan. Check the future loan payback capacity.
The procedure of SBI Flexipay home loan application is the same. Only you have to choose the Flexipay option in the form. You are required to choose whether you want moratorium or not. if you want the moratorium, you have to give the moratorium period. It can be 3,4 or 5 years. You can also apply for SBI Flexipay home loan through the SBI online home loan application page.