South Indian Bank Home Loan Interest Rates
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Loan Tenure

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Lowest EMI Per Lakh

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Prepayment Charges

Nil charges for floating rates loans

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About South Indian Bank

South Indian Bank is one of the oldest banks in the southern region of our country. The bank has its origins in the Swadeshi movement. A group of enterprising young men came together to establish South Indian Bank in Thrissur, a culturally rich city in Kerala. The bank aimed to liberate poor people from the evil clutches of the moneylenders. At the same time, it also encouraged people to save whatever little money they had.

South Indian Bank was the first among the private sector banks to become a scheduled bank in 1946. It was also the first private sector bank to have a currency chest. Similarly, South Indian Bank is a pioneer in many other fields such as the first Kerala-based bank to implement CBS. Today, the bank has 870 branches and 1315 ATMs in India. It is a predominantly South-based bank that does not have much presence in North India. Nevertheless, this bank has built up a reputation for being a customer-friendly bank in South India.

About South Indian Bank Home Loan

South Indian Bank offers an excellent Home Loan product that suits the needs of every section of society. Salaried persons and self-employed individuals can avail the benefits. Similarly, independent professionals like engineers and doctors are also eligible to apply for Home Loans with South Indian Bank. Agriculturists have exclusive Home Loan products designed uniquely to satisfy their requirements. It also caters to the NRI community. In short, the bank has tailor-made Home Loan products for everyone.

Some of the best features of the South Indian Bank Home Loan are its reasonable and competitive rates of interest, and transparent processing. It is also an active lender in South India in PMAY.

South Indian Bank Loan Home Loan Product and Features

Purpose

  • Purchase readymade house/flat
  • Buy a flat or house aged up to 20 years
  • Purchase land and construct your house on it
  • Purchase house/flat already under construction
  • Make additions and alterations to the existing house
  • Repairs and renovations are also permissible
  • Reimbursement of the amount spent on purchasing/constructing house within two years of purchase.
  • Balance takeover of Home Loans from other banks and financial institutions

Target

  • Salaried persons
  • Self-employed individuals and professionals
  • Agriculturists
  • Senior citizens and pensioners
  • Non-resident Indians

Age group

Minimum 21 years at application and maximum 75 years at maturity of the loan

Quantum

2 Lakhs to 15 Crores

Tenure

Minimum 5 years to a maximum of 30 years (up to a maximum age of 75 years)

Margin

Minimum of 10%

Rate of interest

Linked to MCLR with concessions to women

Features

  • Surrogate programmes available
  • Repayment can extend beyond the retirement of the salaried employee
  • Top up facilities available for a maximum of 25 Lakhs

Processing fees

0.50% with a minimum of 5,000 and a maximum of 10,000

Penal interest

2% of the default amount

South Indian Bank - Home Loan Interest Rate

Marginal Cost of Funds based Lending Rates - MCLR

South Indian Bank follows the MCLR concept that was introduced from April 01, 2016. Recently, the Reserve Bank of India pushed all banks to switch over to an external benchmark-related lending rate. Many commercial banks have announced their RLLR-linked retail loan products. South Indian Bank has not yet adapted to RLLR. It prefers to continue with the MCLR concept.

MCLR is also a market rate-related concept. It depends on factors like the marginal cost of funds and negative cash carry on CRR. Both of these factors depend on market rates. However, there is no precise external benchmark rate to link within the case of MCLR.

The reason why RBI advised banks to follow RLLR is that banks were not prompt enough in passing the benefits of market-rate reductions to customers. The RLLR will not allow such a lag because the passing of the benefit would be quick.

South Indian Bank has announced its latest MCLR revision with effect from September 20, 2019.

Tenor Premium MCLR

Overnight MCLR

8.55%

One-month MCLR

8.60%

Three-month MCLR

8.70%

Six-month MCLR

8.90%

One-year MCLR

9.25%

Home Loan Product MCLR linked rate Effective rate

Regular Home Loan

6M-MCLR + 0.10% or 1Y-MCLR

9% or 9.25%

Home Loan Surrogate

6M-MCLR + 1.10% or 1Y-MCLR + 1%

10% or 10.25%

Home Loan Saver

1Y-MCLR + 1%

10.25%

Housing Loan SMART

6M-MCLR + 0.60% or 1Y-MCLR+0.50%

9.50% or 9.75%

Housing Loan SMART - Surrogate Programme

1Y-MCLR + 1%

10.25%

Base Rate - BR

Before the introduction of the MCLR concept, South Indian Bank was following the Base Rate structure. The Base Rate concept was introduced from July 01, 2010. The Home Loan product has long repayment tenure. Hence, South Indian Bank would have many loan accounts following the Base Rate structure, as well. Secondly, South Indian Bank used to offer a fixed rate of interest in the Base Rate concept. Hence, South Indian Bank announces its Base Rate at frequent intervals to cater to these borrowers. However, it does not lend to new borrowers under this rate structure.

The Base Rate of South Indian Bank with effect from September 20, 2018, is 10%.

Benchmark Prime Lending Rate - BPLR

The Base Rate was the first attempt by banks to bring in the sense of uniformity towards charging interest on loans. Before the Base Rate concept came into effect, South Indian Bank was following the BPLR concept. Though the bank might have many loans in this interest rate structure, South Indian Bank announces its BPLR from time to time.

The BPLR of South Indian Bank with effect from November 11, 2015, is 15%.

South Indian Bank Home Loan Interest Rate - Points to Note

  • South Indian Bank offers a floating rate of interest on Home Loans linked to the MCLR
  • The bank offers a concession of 0.05% to women borrowers. However, the rate of interest should not go below the 6M-MCLR in any case.
  • South Indian Bank offers Home Loans under PMAY at the same interest rates as applicable to regular Home Loans.
  • The MCLR has changed from September 20, 2019. This rate structure applies to all new loans sanctioned after September 20, 2019. It also applies to existing loans under MCLR where the reset is possible.
  • The rates of interest mentioned above are for Home Loan accounts with regular repayment.
  • For accounts in the SMA-1 category (overdue accounts for more than 30 days to 60 days), the rate of interest is 'Existing rate plus 0.50%.
  • For accounts in the SMA-2 category (overdue period more than 60 days to 90 days), the rate of interest is 'Existing rate plus 1%.

South Indian Bank Home Loan Interest Rate - Method of Calculation

South Indian Bank calculates Home Loan interest on the daily reducing balance method. Hence, the ideal mode of repayment is EMI. However, agriculturists do not have a monthly income. The bank has other payment options such as quarterly or half-yearly repayment schedules.

The EMI comprises a principal repayment component and an interest repayment constituent. Both of these components are variable. The interest component is equal to the amount of interest charged on the account during the previous month. The difference between the EMI amount and the interest repayment goes towards repaying the principal amount.

How to Calculate South Indian Bank Home Loan EMI?

South Indian Bank has a 'Ready Reckoner Calculator' on its website. It includes an EMI Calculator. Using this EMI Calculator, it is possible to calculate the EMI of the Home Loan.

MyMoneyMantra has a similar EMI Calculator on its website. Customers can use this calculator to confirm their EMIs. Using this calculator is easy.

  • Enter the loan amount, interest rate, and repayment tenure to get your EMI
  • This calculator provides the break-up of interest and principal repayment for the entire tenure of the Home Loan.

South Indian Bank Home Loan - Modes of Repayment

South Indian Bank Customers

  • Submit post-dated cheques from their savings or current accounts
  • Register an SI mandate to debit their savings/current account for the repayment of EMI
  • Pay through net banking and mobile banking channels
  • Pay cash at the branch counters

Other Bank Customers

  • Submit PDCs from the savings/current accounts with their respective banks
  • Set up an ECS mandate for automatic debit through NACH
  • Pay through remittance channels like NEFT/IMPS/RTGS either using internet/mobile banking or from their respective banks.
  • Pay cash at South Indian Bank counters

South Indian Bank Home Loan - PMAY Borrowers

South Indian Bank caters to PMAY borrowers. The Chief Nodal Agency for South Indian Bank is HUDCO. Hence, the bank has to process its subsidy claims through HUDCO.

Borrower Category

Annual Family Income

Loan Amount Eligible for a Subsidy

Subsidy Rate

The Maximum Amount of Grant

Economically Weaker Section

3 Lakhs

6 Lakhs

6.50%

2.67 Lakhs

Low-Income Group

6 Lakhs

6 Lakhs

6.50%

2.67 Lakhs

Middle-Income Group-I

12 Lakhs

9 Lakhs

4%

2.35 Lakhs

Middle-Income Group-II

18 Lakhs

12 Lakhs

3%

2.30 Lakhs

South Indian Bank Home Loan - Frequently Asked Questions

What is the South Indian Bank Surrogate Home Loan programme?

In the ordinary course, applicants have to submit documentary evidence of income by way of salary slips or IT returns when applying for Home Loans. However, some people have income but do not have sufficient documentary evidence to support their claims. Hence, such people usually remain outside the purview of banking. South Indian Bank has a unique programme in place for such people. It accepts bank statements, copy of invoices, and other unconventional documentary evidence to arrive at the loan eligibility. Thus, such people also become eligible for Home Loans.

What is the rate of interest applicable to such surrogate Home Loan products?

The effective rate of interest for such surrogate programmes is 1% higher than the interest rate for the regular Home Loan.

Why is the rate of interest for surrogate Home Loan products higher than the regular Home Loan rates?

The surrogate Home Loan borrowers do not have conventional documentary evidence to prove their income. Hence, such borrowers have a higher risk perception as compared to regular Home Loan borrowers. Therefore, the rate of interest is higher in comparison.

Who can apply for the South Indian Bank Top-up Home Loans?

South Indian Bank Top-up Home Loans are available for existing Home Loan customers with an excellent repayment record. The maximum amount of top-up loan is 20% of the original sanction amount or 25 Lakhs, whichever is lower.

Are there any prepayment or foreclosure charges in South Indian Bank Home Loans?

In the case of floating rate of interest Home Loans to individuals, there are no foreclosure or prepayment charges. However, for non-individual borrowers and those opting for a fixed rate of interest have to pay foreclosure penalty as follows:

  • If closed from own sources after two years: No charges
  • If closed from own sources within two years: 1% of the prepaid amount
  • If closed through other bank takeover schemes: 2% of the foreclosure amount

Does South Indian Bank offer a Home Loan on a fixed rate of interest?

As on date, South Indian Bank does not offer Home Loans on a fixed-rate basis. All its Home Loan products are on floating rates of interest.

Can any borrower switch over from the Base Rate to MCLR now?

No, South Indian Bank does not allow its borrowers to switch over from the Base Rate Home Loan product to the MCLR product. The option once exercised is a final one.

What is the benefit allowed to women borrowers?

South Indian Bank offers an interest concession of 0.05% to its women borrowers. However, the following conditions apply:

  • The woman should either be a sole borrower or a co-applicant to the Home Loan
  • The property should be in her name, or she should be a co-owner of the property
  • The effective rate of interest should not fall below the 6M-MCLR

Are there any additional charges on delinquent accounts?

Yes, the interest rates apply to only those borrowers who are regular in their repayments. If the overdue period is more than 30 days, the accounts are classified as delinquent accounts.

  • Overdue period >30 days and up to 60 days - SMA-1: Rate of interest is 0.5% more than the contracted rate.
  • Overdue period >60 days and up to 90 days - SMA-2: Rate of interest is 1% more than the contracted rate.

How does the South Indian Bank treat the PMAY subsidy?

The PMAY subsidy is an upfront interest subsidy. The bank lodges its claim for the grant with HUDCO. On receipt of the same, the bank credits the subsidy amount to the Home Loan account of the borrower. 

South Indian Bank Home Loan Interest Rates - Latest News

South Indian Bank revises its MCLR w.e.f. September 20, 2019

South Indian Bank has revised its MCLR from September 20, 2019. These rates will now be the base for calculating the interest rate on new retail loans. The 1Y-MCLR of the bank now stands at 9.25%.

South Indian Bank seeks the approval of its shareholders to raise funds for meeting capital requirements

South Indian Bank proposes to increase its advances portfolio by 20%. Therefore, it has sought approval from its shareholders to raise funds by issuing 300 million equity shares. It also sought a proposal to increase to 500 Crores separately.

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