State Bank of India (SBI), on Wednesday, announced that it would launch a new product ‘SBI Reverse Mortgage Loan’ for the benefit of senior citizens on October 12.  

The reverse mortgage loans are released in monthly or quarterly installments or as a lumpsum payment at the beginning, against the security of their self-acquired and self-occupied houses, according to a SBI release issued here. 

Senior citizens can avail this loan and need not repay it at all, while at the same time they will also continue to stay in their houses during their lifetime. For a loan of Rs 1 lakh, the monthly payment on a 10-year loan is Rs 468 and on a 15-year loan, it would be Rs 225.  Similarly, for a loan of Rs 1 lakh, the quarterly payment for a 10-year loan would be Rs 1,423 and on a 15 year loan, it would be Rs 687, the release said. 

Discount on offer
Meanwhile, SBI has announced a reduction in interest rates on various retail loans as well as loans for transport operators and farm mechanisation as part of the festive season offer.  The bank has reduced interest rates on all new home loans, car loans, two-wheeler loans and personal loans. Home loans are now cheaper by 0.50 per cent to 1 per cent depending on loan maturities and amount of loan. It is also offering a discount if the borrower has a salary account with it and further discount if a higher margin is available.  Interest rates on new car and two-wheeler loans have been reduced by up to 1 per cent depending on the amount and maturity of loan. New car loans are now available at 11 to 12 per cent depending on the loan amount, maturity and type.

Personal loans are cheaper by 0.50 per cent to 1 per cent. The bank is offering 50 per cent concession in processing charges on all personal segment loans. For small road transport operators in SME sector, it has reduced interest rates by 1 to 2 per cent and applicable rates will now be in the range of 10 to 12.25 per cent for various loan maturities.

The offer is also extended to farm mechanisation loans (tractors, power tillers, combine harvesters, etc) by reduction in interest rates ranging from 1 to 2 per cent. The proposed rates are applicable for all new loans sanctioned on or after October 8, 2007 and are valid up to December 31, 2007.