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  • Category: Investments

    Home Loans by banks in India - Payment options

    Need to take a home loan? Searching for a bank providing the best pre payment option? Find responses from experts on this page.

    I am looking to purchase a resale flat in Ghaziabad. Can someone please help me according to their experience on what banks should I approach for a home loan?

    Also I need advice on the prepayment option as I would want to settle down for a bank with better pre payment options.

    Experts: do respond.
  • #136936
    The banks offer home loans only after carrying out due diligence though they always welcome eligible loan buyers for selling their home loan products. Some of the examples of available bank loans are as follows -.
    1. SBI offers 10.10% to 10.25% interest rate for women and 10.15% to 10.30% for others.
    2. LIC Housing finance offers 10% fixed interest rate for women and 10.20% to 12.25% for others.
    3. HDFC provides home loans with interest rate of 10.25% to 10.50%.
    4. ICICI offers home loan with 10.10% to 11.25% of interest rate.
    First of all the bank branch, where the applicant has his/her account should be approached as his/her financial record being available in the concerned branch, it may be less cumbersome for the bank officials to process the loan.
    Some of the factors should be considered while buying a home loan are - percentage of the loan amount offered i.e. whether 80% or 85%, interest rates and prepayment charges, loan processing charges, if any, and time involved, availability of the special concessional schemes and of course the interest rates charged.
    Nowadays online home loans are also offered.
    There are many websites which offer comparative studies on home loans offered by different financial institutions.

    Let us encourage each other in sharing knowledge.

  • #136945
    Not many banks are happy with the prepaying options or even paying in between the existing payment schedule. In such case they introduce specific tax for the entry and exit in such case. Each bank has different fees and different loan process for those who want to prepay some portion.

    I suggest you to check out both PSU and private banks. And then decide which can be good enough for you. You can find most of the banks charging 10% to 11.5% for the home loan. Also the exit fee for prepay is going to be there.

  • #136972
    You should always approach first the bank where you already have your dealings. That makes it easy to understand each other better. The bank also knows you and will be able to get you banking history and integrity apart form the financial background. That will be comfortable for both.

    In buying second hand flat, bank mainly sees the further economic life of the flat, the are where it is located, the clarity and perfection of documents, payment of all statutory liabilities on the flat, non-encumbrance etc. Then bank arrives at maximum amount of loan that can be given for that. Then it works on your financial capacity to repay smoothly and your residual number of years in job or income generating activity.. If that also is okay they will agree to give you loan subject to certain terms and conditions.

    Generally banks do not encourage pre-payment very soon after taking the loan. Some banks allow a fixed per cent of payment in addition to total EMI in a year. Most banks will allow prepayment with some penalty charges and may allow closure by recovering foreclosure charges.

    But as Home Loans are of long term payment and of lesser interest rates, it is better to continue with them. You may prepay any other loans of higher interest like personal loans, credit card dues etc first.

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