Teaser Loans

Consumer Voice - - Home Loans -

Teaser loans are those home loans that come with lower EMI dur­ing the ini­tial years of house con­struc­tion (based on fixed rate of in­ter­est) and in ad­vanced stages of con­struc­tion in later years come with higher EMI (based on float­ing rate of in­ter­est). Such a struc­ture has been tried in State Bank of In­dia (SBI). SBI even sug­gested to RBI to con­sider wider ap­pli­ca­tions of this struc­ture at the na­tional level. How­ever, RBI was not very en­thu­si­as­tic as this might in­volve higher pro­vi­sion­ing norms while clas­si­fy­ing the as­set.

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