Banks cash in on festivities to boost home loan demand
Several banks are offering limited-period discounts and freebies with home loans to boost the home loan segment during the festival season. According to experts, many other banks are likely to come out with their festival offers on the back of ample availability of liquidity coupled with subdued growth in corporate lending. So far, the Punjab National Bank, Syndicate Bank and Vijaya Bank have floated special schemes to cash in on the festival demand.
ICICI Bank has announced a “festival pricing” for home loans and is offering floating rate home loans at 10.25% for a loans below R30 lakh and 10.50% for loans above R30 lakh and up to R3 crore. The same rate of interest is applicable for fixed rate home loans for a fixed tenure of one and two years. For a fixed rate loan of three years tenure, the offering is at 10.50% for loans below R30 lakh and 10.75% for loans above R30 lakh and up to R3 crore. This special festival pricing is valid for sanctions till December 31, 2012.
Public sector banks, including the Punjab National Bank, Bank of Baroda and Vijaya Bank have reduced interest rates by about 25 to 50 basis points on home loans up to R75 lakh. Some have also decided to waive off processing charges.
Indian Overseas Bank is offering free credit cards to new home loan customers. Indian Bank has reduced interest rates for customers who opt for more than one loan, while Vijaya Bank has extended the repayment period by seven years besides reducing interest rates and waiving off processing fees.
Public sector lender Syndicate Bank has also announced a festival offer for home loans. Interest of 10.5% (equated monthly installment is R944 per lakh) is offered for loans of up to R25 lakh for 25 years and at 10.75% for loans above R25 lakh to R75 lakh. For loans above R75 lakh, the interest charged is 10.9%.
The bank has announced that there will be no processing/documentation charge for home loans during the festival offer.
Earlier, State Bank of India had reduced rates in August and now offers the cheapest home loan after a reduction in its base rate by 0.25% to 9.75%.