A home loan to suit your pocket
From women-friendly interest rates to special loans for the low income category, banks had interesting offers for everybody this festive season
So what did the banks have to offer this festive season? Here is an update on the various home loan schemes offered by various banks and housing finance companies this festive season. First things first, the property proposed to be financed should be either in the sole name of the woman borrower or she should be the first owner in case of joint ownership. This festive season has brought an icing on the cake for women borrowers with the big daddy of home loans (SBI) offering home loans 10.10% to women borrowers whereas it is 10.15% for others. Currently, special rates for women are being offered by SBI and ICICI bank.
Upbeat about the impending festive season, the biggest PSU bank SBI will offer home loans above ₹ 75 lakh at 10.15% (10.30% earlier) for male borrowers and for loans below ₹ 75 lakh, the existing rate will continue. As far as the biggest housing finance company is concerned, HDFC is offering loans of up to ₹ 75 lakh at 10.15% under a ‘Winter Bonanza’, which has been extended under the new scheme.
Another big nationalised bank (PNB) has launched a ₹ Festival Season Bonanza offer on retail loans. Under the scheme, home loans up to ₹ 2 crore will be available at the bank’s base rate of 10.25%. Following suit, other PSU banks (Oriental Bank of Commerce) has reduced home loan rates for amounts above ₹ 75 lakh to 10.25% upto March 31, 2015. Under this scheme the processing fee and documentation charges are nil.
Besides these attractive interest rates on offer by various banks and HFCs, there are many friendly offers available in the market. An EMI waiver scheme by a private sector bank (Axis Bank) is called Happy Ending Home Loan. This scheme offers a waiver of last 12 months EMI if the borrower has a clean record of repayments on a minimum 20-year home loan. To be eligible, the borrower must have serviced
the loan for at least 15 years after considering all partial prepayments, if any.
And if your budget is not big enough, banks have some options for you too. Known as Asha Home Loan, which is ideal for low income group segment, a person can avail a home loan in the range of ₹ 1 lakh to ₹ 25 lakh where your minimum combined income should be ₹ 8000 and the area of the property should be around 325 sq ft or more. Loans for these products are available in both the fixed and floating options.
Dual home loan rates are also
on offer where the rate of interest remains fixed for initial few years and thereafter gets converted to normal floating rate of interest for the remaining tenure of the loan.
Many major private sector banks and HFCs have come up with their own dual rate offering fixed rate of interest for a tenure ranging between 1 – 10 years. Here prepayment charges are payable on dual rate loans when they are in the fixed rate stage of the loan. So, for borrowers who intent to prepay the loan before the end of the fixed tenure this aspect may be looked into.
For self–employed or practising professionals, offset loans are a good solution. Here in addition to the home loan account, the borrower gets a linked current account with the same bank. He can then deposit or withdraw from this current account just like any other current account. Every month when the loan installment is paid, interest at the applicable rate is calculated on the aggregate principal outstanding after taking into account the balance, if any, in the linked current account.
The advantage of this product is that it allows you to use both your temporary and permanent cash surpluses to reduce your interest liability on your home loan and at the same time give you the flexibility of withdrawing the surpluses for other uses as and when you may require. These loans are generally priced higher than regular floating rate home loans.
Don’t you think you had ample choice being offered this festive season? Actually you were spoilt for choice.