Terms and Conditions of SBI Personal Loan

SBI provides a personal loan for both salaried and self-employed. SBI provides personal loans at very low interest rates and assures to exclude seasonal proposals which make it popular among the borrowers. There is a low prepayment fee with a minimum prepayment penalty. It does not have any hidden charges and personal loan amount can be used for any purpose without any restriction. SBI provides unsecured personal loans, so no security or collateral against personal loans is required. So it becomes a popular choice among all vertical - salaried, self-employed and working professionals.

Purpose of the SBI Personal Loan

The personal loan is granted to the borrower to meet the expenses like marriage, medical treatment, education, foreign travel or any other general purpose other than any speculative activities.

Eligibility for the SBI Personal Loan

The borrower should be

1. salaried employee,

2. pensioners of central/state government/armed forces,

3. self-employed,

4. businessmen and

5. pensioners with regular source of income.

Rate of interest

It can be calculated in two different manner:

1. Floating rate of interest: The interest on the loan is charged at the prevailing 1-year MCLR on a daily reducing balance at monthly rests. The rate of interest can be reset subject to 1 year of disbursement of the loan. Bank has an option of reducing or increasing the EMI amount or the repayment period or both can be done if there is any change or revision in the interest.

2. Fixed rate of interest: Interest loan under this method will be charged at the prevailing 2-year MCLR as on the date of sanction on a reducing balance with the monthly rests. The rate of interest remains unchanged in the entire period of loan.

Intimation of change in interest rate

The borrower of the SBI personal loan is deemed to have the notice of any change in interest rate whenever there is a change in MCLR or increase in the interest rate. If there is no change in the rate of interest the same should be displayed on the notice boards of the branch and can be informed through newspaper etc. The rate of interest can also be known when the interest is updated on the passbook. If there is any change in the interest rate then the customer is required to pay such revised interest amount.

Mode of Repayment of loan

The mode of repayment available to the borrower from the bank is that he can pay through check-off facility, post-dated cheques for the repayment period given or the borrower’s salary account or pension account in the State Bank of India.

Margin

The margin money set by the bank which the customer is required to pay from his side but for the personal loans which includes SBI SARAL PERSONAL LOAN, XPRESS CREDIT, FESTIVAL LOANS, PENSION LOANS and BHAGYA REKHA the margin set is NIL.

Processing Fees

The processing fees for different personal loans is charged differently:

1. The processing fee for Xpress credit loan is @1% of the loan amount.

2. The processing fee for SBI SARAL loan is @ 2%-3% of the loan amount.

3. The processing fee for Festival loan is @1% of the loan amount.

4. The processing fee for SBI Pension loan is @0.50% of the loan amount minimum of which is Rs.250.

5. Bounced cheques/ECS or SI dishonor.

6. A penalty of Rs.500/- applicable service tax will be charged by the bank for every bounced cheque or ECS and SI dishonors. The rate may vary from time to time. In the case of bouncing of cheques the bank will take the legal action under section 138 of the Negotiable Instrument Act of 1881.

Repayment of the SBI Personal Loan

The loan taken by the borrower has to be repaid in the EMI’s over the term of the loan period or in the lump sum amount at the end of the tenure of the personal loan as stated in the loan agreement. The liability to the bank will only be over when the loan account of the borrower becomes NIL on payment of the residual amount of the loan.

Pre-Closure charges

1. Under floating rate of interest: In this scheme no Pre-closure charges or penalty is taken by the bank.

2. Under Fixed rate of Interest

If the borrower is making a pre-payment of EMI’s in full or in part and closing the loan account before the loan tenure then the penalty @3% will be charged on the pre-paid amount of loan.

If the borrower is making a full pre-payment of the loan from the proceeds of the new loan which he has taken from the bank under the same scheme then no pre-payment charges are taken.

Other Fees and Charges

The other fees and charges applicable on the personal loan are as follows:

1. The fees collected for the payment of the empanelled Advocate or value for any legal opinion, search report and valuation fee is charged as per actual amount paid.

2. Any other fees as required are also taken as actual.

Default

In case of default in paying the due amount on the due date, the customers are sent reminders from time to time for the payment of the outstanding loan amount through post, fax, SMS, telephone or e-mail. The third party can also be appointed for the collection of the due amount. The collecting agency has to follow the Indian Bank’s Association (IBA) rules and regulations and the code of conduct on debt collection process.

Penal Interest

The penal interest is not charged for the loan amount up to Rs.25000. for all the loans above RS.25000, if there is irregularity in the payment of EMI’s for a period of month or so then the penal interest rate @ 2% p.a. will be charged over and above the applicable rate of interest on the overdue amount for the period for which the borrower has not paid the installment amount. If the part EMI or the part installment remains unpaid then the penal interest in not charged.

Timeline for Disposal of loan Application

The SBI personal loan in metro cities is disposed in 3 days and for other semi-urban and rural areas it takes 2-3 days for disposal. The timeline starts from the date of receipt of complete documents by the bank from the applicant. The time taken by the applicant for submitting the details as required by the bank will not be considered in calculating the timeline. The timeline period will be based on the full working days. If there is a requirement for SBI personal loan verification to be done through govt. bodies across many centers then additional 15 working days will be applicable.

Customer Service

In case you have any issues with your credit card, you can reach the customer service department directly over the phone or contact the SBI grievance cell through their customer services portal. In case you are dissatisfied with the initial response to your grievance, you can escalate to the Deputy General Manager (Customer Service) in order to get the issue resolved.