Everybody dreams of owning a house at least once in their lifetime and to make things easier and faster there are a plenty of bank loans available in the market to cater to the growing demands of the consumers. Many Housing Finance companies and Banks provide easy loaning facilities to let people buy plots, shops, homes, apartments and also offices. Home extension and home improvement loans are also available for the salaried class and the business section alike for Indian residents in the age group 18 to 65 years. Companies like the LIC, PNB, Bank of Baroda, The State bank of India, Allahabad Bank are some of the examples in the government sector which provide home loans. Axis Bank, India Bulls Housing, L &T Housing are some of the providers in the private sector. Co-operative banks like Ujjeevan Bank, Abhyudaya Bank and Jan Lakshmi bank also provide small home loans at easy repayment options and avail facilities.
Home loans are available for the Indian consumers at attractive interest rates for Indian residents, also NRI’S and pensioners. There are property loans to suit and cater to all. A plethora of home loans are available for the purchase, construction, extension, house repair, plot purchase and top- up loan with flexible repayment plans with quick loan processing, zero pre-closure charges and no partial pre-payment charges. The tenure of the home loans ranges up to twenty years and the amount disbursed could be from Rs. Three lakhs to ten crores. The home loans are usually given at 8.80% p.a to 12% p.a. 0.50% to 1% of the loan is charged as the processing fee. The lender will charge the processing fee, legal fee, documentation charges, MODT charges, Property Evaluation fees from the borrower. There might arise some discrepancies or volatilities in the home loan rates due to the existing market conditions. The prime lending rate or the base rate of the home loan interest decides the EMIs of the home loans. If it fluctuates then the EMIs are bound to change. The home loans are given under two sections one with fixed interest rates and the other with floating interest rates. The interest rates remain steady in case of the fixed interest loans and the interest rates change quarterly in case of the floating home loan rates.
Some experts opine that the floating interest rates are better than the fixed home loan interest rates as these fluctuate with the market patterns and offer relief to the consumers. If the rates fall then the EMI’s will lessen in tenure or worth. The lessening of tenure is far better and economic than the lessening of EMI. Predicting future interest rates could be tougher than deciding how much EMI could be paid comfortably. Regarding the restructuring of EMIs also the amount need not be decreased but the tenure. If the rates increase the repayment tenure increases if the EMI are kept constant. Indian Banks offer home loans and gadget loans at record low prices and at easy conditions. Stamp duty, notarization charges, insurance premium and documentation need to added to the kitty of home loans. Regarding the fixed home loan rates the bank bears the risk if any caused due to the change in home loan rates. In the case of the floating home loan rates the borrower bears the costs if there are any changes in the home loan interests.
So in a nutshell the home loan sector is not so easy as it seems, what is lucrative on the outside may be complicated within. So calculate your risks and then take the plunge!
Home Loan Sector: Not So Easy as it seems