Home loan push: SBI betting big on customers with lower credit score and new to credit

State Bank of India (SBI) seems willing to bet big on customers with lower credit bureau score and those new to credit (NTC) to further grow its home loan and top-up loan portfolio, going by its latest ‘campaign rates’ initiative. It is luring them with significant concessions over the prevailing card rates.

India’s largest bank is offering home loan (HL) and top-up loan customers with lower credit score (151-200) and those new to credit or with no credit score concession of 65 basis points (bps) and 45 bps, respectively, over the card rate.

SBI has also stepped on the gas to accelerate build up of its HL portfolio by offering 55 basis points concession on the card rate for customers with credit score of 750 and above, with the effective interest rate working out to 8.60 per cent. This is part of its four month ‘campaign rates’ initiative, which started on September 1.

For customers with credit scores of 700-749, 151-200 and NTC/ no credit score, the bank is giving higher concession of 65 basis points over the card rate of 9.35 per cent, with the effective HL interest rate working out to 8.70 per cent.

Additional concession

Besides the concession over the card rate, SBI will also offer 20 bps additional concession over the above proposed rates for HL takeovers, resale and ready to move properties for customers with credit score of 700 and above.

So, customers with credit score of 750 and above will get HL at 8.40 per cent. Those with credit score of 700 -749 will get HL at 8.50 per cent.

SBI’s home loan portfolio grew 13.47 per cent year-on-year (y-o-y) to stand at ₹6,52,548 crore as on June-end 2023. These loans accounted for 23.13 per cent of the bank’s domestic advances of ₹28,20,433 crore.

Top-up loans

In the case of top-up loans, the bank is giving 45 bps concession over the card rate for customers with credit score of 750 and above, with the effective interest being 9.10 per cent.

Customers with credit scores of 700-749, 151-200 and those who are new to credit too will get 45 bps concession over the card rate, with the effective rate of interest rate being 9.30 per cent.

The bank will give 20 bps concession over the above proposed rates for top-up loans associated with takeover loans (for credit score of 700 and above), per the bank’s website.