Just imagine: You visit a bank branch to take a housing loan with all the required documents. However, the bank insists you do one more thing - get an insurance plan. Many banks even say that you won’t get a housing loan if you don’t purchase an insurance plan. But, is property insurance mandatory for SBI home loan? Read below to know:
Is SBI home loan insurance compulsory with a home loan?
Even though it’s important to purchase an insurance plan while taking a loan, you're not under any obligation to do so, not from any non-banking finance company or any bank including SBI. Neither the regulatory bodies like IRDAI or RBI nor the law have made it mandatory for people to buy an insurance plan with a home loan.
How to Handle the Situation
Is home loan insurance mandatory with a home loan? No. So, if your bank is forcing you to buy property insurance for the housing loan, then let them know that you know that it’s not compulsory to purchase an insurance plan to get a housing loan. You can also ask them to give a written document mentioning that purchase is mandatory to get a housing loan. This will deter them from forcing any non-mandatory products.
Even if that doesn’t help, then you should reach out to the higher officials of the bank or raise a complaint to the Banking Ombudsman.
Get a Property Loan without having to Purchase an Insurance Plan through NoBroker
I hope you like my answer on property insurance SBI home loan.
Read more:
Is property insurance mandatory for home loan?What is home loan insurance?Which bank is best for loan against property?What is the home loan interest rate in SBI?
Hey Prateek,
Taking insurance is no doubt a healthy choice. But it is still a choice that depends entirely on your convenience. So to answer the question: is insurance mandatory for home loan, no, it is not necessary. But there are banks that compel you to purchase insurance along with a home loan, as rightly pointed out by Miss Jayati.
I faced a similar situation when I went to a private sector bank to get a home loan. I was informed that I am required to purchase insurance for my home loan to get approved. But I had thankfully read Miss Jayati’s answer and done some research around home loans beforehand which helped me save myself from this trick of the bank. So, I would be glad to share my experience and the way in which I handled the situation. But before that let’s understand why banks try to make it compulsory for you to buy insurance along with a home loan.
Fulfil the dream of your own home by taking a home loan from leading banks without having to buy insurance on NoBroker.
There can be two reasons for this:
To safeguard their own self-interest in case we are unable to repay the loan approved by the bank.
They may also have some sort of collaboration with an insurance company. So, if they successfully convince their customers to buy insurance from that insurance company, it helps them earn huge commissions.
Is insurance compulsory for Home Loan from SBI?
The simple answer to this is no. It is not mandatory, both legally and ethically, to buy insurance for a home loan from SBI or any other bank as such. But if a bank has issued an internal guideline for home loans where it has stated that property insurance is mandatory for home loan, then you may have to buy insurance from them too. But this is only their internal guideline and they still cannot force you into buying insurance from them exclusively. They may make it mandatory to buy insurance for home loan but the choice is still with you to choose an insurance provider of your choice.
When I was asked to compulsorily buy insurance for a home loan, I stated firmly that I know there is no such legal compulsion. To this, they politely obliged. But if you are in a situation where the bank is not obliging you, you may threaten them to file a complaint with the banking ombudsman. They would cease to pressurise you then.
I hope now you clearly know is insurance mandatory for home loan or not.
You can also do a very quick check of your eligibility for a Home Loan through NoBroker. It is quite simple and gives accurate numbers. You can check it here;
[widget_homeLoan_checkEligibility_form]Read More:What is Home Loan Insurance?Is Property Insurance Mandatory for Home Loan?
Taking a home loan is a long-term commitment. You need to pay monthly EMI on time along with the interest for at least 25 to 30 years. If you fail to pay your home loan, the property you mortgaged will be seized. At times the family can need money for unavoidable circumstances. Therefore, the bank asks you to take home loan insurance. Home loan insurance can help you with paying your EMI. But is SBI property insurance for home loan? I will let you know in detail.Get home loans with minimmal paperwork at NoBroker from your preferred bank.
Is property insurance mandatory in SBI home loan?
I read what Ms Jayati and Mr Rohan G have pointed out. And what they have mentioned is totally correct. When I visited SBI bank for the home loan they also offered me insurance but I declined. I pointed out that SBI has itself mentioned on their website that it is not mandatory to avail of home loan insurance with the home loan. In conclusion, I would like to point out that banks offer home loan insurance as they don't want to risk themselves by offering home loans to borrowers. So, to secure themselves, offer a home loan. I would also like to point out that home loan insurance is costly. So, I will let you be the judge on whether or not you should opt for home loan insurance. I hope you find the answer on property insurance for home loan informative.Read more:Is property insurance mandatory for home loan?Best Home Loan Insurance Policy In IndiaWhat is home loan insurance?Which bank is best for loan against property?
The rising cost of real estate has led to a huge increase in the popularity of home loan insurance. You can safeguard future of your property just like the future of your loved ones because life's happenings are unexpected. We must understand property insurance for home loan SBI in order to understand how it helps us.Get a home loan at very effective interest rates through NoBroker here.
Is SBI home loan property insurance mandatory?
No, property insurance is not mandatory for SBI home loans. But it is advisable to get insurance for your property to safeguard yourself from unprecedented events.The cost of home loans is currently at a multi-year low. Currently, the 6.4% industry rate set by the public sector Union Bank is the lowest. Last month the State Bank of India (SBI), issued a holiday offer of 6.7% for home loans of any size. This will help you understand whether SBI property insurance mandatory or not.
How does home loan insurance work?
The insurer pays back the remaining loan amount to the creditor or the bank in the terrible event of the borrower's death.
Tax benefits are available under Section 80C of the Income Tax Act.
The borrower has the option to add extra riders or coverages to their house insurance policy. Major illness and disability riders ensure that the outstanding loan balance is covered not just in the tragic event of the borrower's death, but also while they are unwell.
If you are thinking whether SBI home loan insurance mandatory or not, I’d like to say that SBI Life Insurance is not an obligatory requirement of all house loans. However, due to the significance of life insurance, it should never be disregarded. People who are thinking about getting a home mortgage, for instance, might purchase a life insurance policy to safeguard their payments.Now that you know whether property insurance is mandatory for SBI home loan or not, I’d like to share a few key features of SBI simple home insurance policy, that will help you to make a decision of getting the same;
Offers defence against catastrophic losses like those resulting from natural disasters
Offers defence against legal actions brought about by injuries sustained on your property.
Offers defence against the theft and break-in of the insured's possessions
safeguards the lending institution's collateral
Offers a complete solution to all threats under one umbrella.
While taking a housing loan, I was informed by the SBI executive that I had to opt for property insurance. Since I was not sure, I asked a friend whether is property insurance mandatory for home loan as per SBI? He told me that it was not and also told me about the following.
Is Home Insurance Mandatory For SBI Home Loan?
My friend told me that it's not mandatory to take property insurance. Banks generally do this to safeguard their interests in case you are not able to pay the loan. He also said that banks could issue an internal guideline making it mandatory to buy Home Insurance for home loans. Even if they do that, you can still choose an insurance provider of your choice. My friend also told me that I could file a complaint to the Banking Ombudsman if the bank keeps on enforcing. When the bank asked me to take up the insurance, I told them that I was aware of the fact that it’s not compulsory to choose one. But they still insisted on it. So, I asked them to give me in writing that home insurance is mandatory for home loan. After this, they did not push me any further and I was able to get the loan. That’s all about it. I hope your queries about is property insurance mandatory for home loan as per SBI have been resolved. Avail SBI Home Loan at 8.5% Onwards through NoBrokerRead MoreHow to Cancel SBI Home Loan Insurance?
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Is property insurance mandatory for SBI home loan?
Prateek
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September 28, 2021
2021-09-28T17:10:48+00:00 2021-09-29T17:57:29+00:00Comment
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