Chief minister Nitish Kumar said on Thursday that if the bankers fully co-operate, then corruption could be checked to a great extent in the state and the dream of economic prosperity would be achieved. He was speaking at a function organized here to launch a scheme of home loans for state government employees, a joint initiative of the state government and Central Bank of India. The CM also handed over loan cheques to 10 employees.
He said the loan facility extended by the Central Bank of India would benefit the government employees as they would get an opportunity to build their own houses. He congratulated the bank’s executive director, R K Dubey, who was also present on the occasion.
The CM said apart from this scheme, the government’s own loan scheme would also continue, under which a loan of up to Rs 7.5 lakh is given. The employees could now take a home loan of up to Rs 30 lakh from the bank and EMIs would be deducted from their salary every month.
Nitish said during his first tenure he wanted to implement various welfare schemes through banks, like bicycle and school uniform schemes, but failed to get requisite cooperation from the banks. As a result, cash subsidy was extended to beneficiaries. “I want to remove middlemen from all schemes and transfer government assistance to the bank accounts of beneficiaries. Scholarships to students should also be deposited into their accounts and they should be given the facility to withdraw money through ATMs,” the CM said.
He appealed to other banks also to come forward and cooperate in implementation of different schemes. The banks should also help the people of unorganized sectors, farmers, weavers and BPL people by extending them home loans, he added.
Deputy CM Sushil Kumar Modi said house was a basic necessity like food and clothes but the dream of own home is not fulfilled so easily. He expressed hope that after the Central Bank’s initiative, other banks would also come forward to extend home loans so that more people could benefit. Modi also urged the banks to come out with a scheme of home loans for legislators. “Banks should extend home loans at minimum interest to poor people for the construction of Indira Awas units,” he said.
Central Bank’s executive director R K Dubey threw light on the loan scheme and said a loan of Rs 39 crore was being extended in Bihar. Loans in education and agriculture sectors as also to the self-help groups had also been extended by the bank.
A memorandum of understanding was also signed between the state government and Central Bank of India on this occasion.
Source: Times of India
The existing home loan customers of mortgage major Housing Development Finance Company (HDFC) should prepare themselves to pay higher EMIs. Citing the rising interest rate scenario in the economy, the company on Tuesday said it has increased the rate of interest on floating rate home loans by 50 basis points (100 basis points=1%).
The hike comes a week after the Reserve Bank unexpectedly raised key policy rates by as much as 50 basis points.
The last time HDFC had raised rates was in May, but had kept its rates unchanged in June when the RBI had raised the key rates by 25 basis points.
As a result of this hike in rates by HDFC, a home loan customer who has taken a 20-year loan will have to pay roughly about Rs 34 higher as EMI for every Rs 1 lakh of loan. Similarly, for a 15-year loan, the per lakh increase in EMI will be Rs 32, Rs 30 for a 10-year loan and Rs 28 for a 5-year loan. The rise in home loan rates will affect the existing as well as new borrowers under the floating rate options, while existing borrowers under the fixed rate will not be impacted .
For HDFC’s customers, the change in rates will be effective in a staggered manner, between now and October 1, a company official said. Under the increased rate structure, for new customers, HDFC will charge 10.75% yearly rate of interest on home loans of up to Rs 30 lakh, 11% on loans of above Rs 30 lakh and up to Rs 75 lakh, and 11.50% for loans of above Rs 75 lakh.
The central bank has hiked key policy rates 11 times since March 2010 to tame rising inflation. To keep pace with the higher cost of funds in the market, banks and home finance companies too have raised interest rates for their borrowers .
Subsequently, the interest rate under the Marginal Standing Facility, an additional borrowing window, has gone up to 9% from the earlier level of 8.5 %.
A slew of lenders including Yes bank, Bank of India, Central Bank of India , Dhanlaxmi Bank, Kotak Mahindra Bank and others have raised their lending rates in the past week since the RBI announcement . Banks are a large source of funds for the housing finance companies (HFCs) and an increase in their lending rate would push up the cost of funds for the HFCs. Among the larger banks, SBI and ICICI Bank are yet to take a decision on their lending rates.
Reference: economictimes.indiatimes.com
HSBC Bank claims to payback half the interest component on three EMIs. It’s a first in the home loan sector. But does it amount to very much any way?
HSBC India has proclaimed a new home loan package offering to pay back part of the interest to the borrowers. Yes, like the foreign bank stated, it is a first in the home loans business. But if one takes a careful look it might not be such a big deal after all.
Scheme:
The scheme which was conspicuously advertised last week, promises to give back 50% of the interest on the 12th, 24th and 36th EMIs (equated monthly installments). It reads, “If the interest on your 12th EMI is Rs50,000, you get Rs25,000 paid back to you after you pay the installment.” That does seem quite a large returns. According to figures available, the interest on the 24th EMI would be about Rs48,000 and the refund Rs24,000, while the interest on the 36th EMI would be about Rs47,000 and accordingly the borrower would receive a refund of Rs23,500.
This sums up to a heavy refund of Rs72,500. Please note that this kind of refund would be available to borrowers taking a loan of Rs80 lakh. However, for the average home seeker taking a loan in the category of Rs30 lakh, the part of interest refund promised in the three installments would add up to about Rs27,000 only. Is this such a big deal?
Rate of Interest Offered:
Of course, the first thing that a borrower looks for is the interest rate on the loan. HSBC’s rates start at 10.25% on loans up to Rs30 lakh, 10.50% up to Rs75 lakh and 10.75% on loans exceeding Rs75 lakh. These rates are 25 basis points higher than the rates offered by HDFC. But HSBC’s home loan rates are on level with State Bank of India’s home loan rates.
Condition:
There is one more condition, whereby a borrower must have a savings/current account with HSBC and maintain a minimum balance of Rs25,000. The bank says it will credit the refund to this account. While, most foreign banks have this minimum balance condition for savings/current accounts, HSBC says that it is willing to forgo the minimum balance for home loan customers.
HSBC has a constant EMI for the entire loan period, in spite of the fact that some funds are parked in the savings/current account, and there is no compensation on the interest part. Possibly, the only concession from HSBC is the flat Rs10,000 loan processing fee which is lower than the 0.5% on loan amount charged commonly by home finance companies.
HSBC also has a higher prepayment charge of 3% (against the industry average of 2%) when more than 25% of the loan amount is prepaid in one go.
HSBC will not finance under construction properties through this scheme and any new property must be prepare for occupation at the time of the disbursal of the loan. The bank also allows loans under this scheme for existing properties as well. The special offer is valid on floating home loans rates, but it is not valid on Smart Home and SmartLAP schemes of the bank.
It is unclear whether the refund amount will be liable for income tax. And finally, the offer is valid only till 31 July 2011. So why is HSBC in such a hurry to pick up customers in this two months period? Maybe, there lies the answer to this new concept.
Source: moneylife.in
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Consumers servicing equated monthly installments (EMIs) on floating rate home loans have started facing the heat because of a rapid rise in bank loan rates.
Wooed by banks with concessional loan rates in the last couple of years, many mortgage borrowers are feeling the pain. State Bank of India (sbi), the nation’s largest lender, raised its minimum lending rate or base rate by 125 basis points (bps) since January while the Reserve Bank of India has hiked its policy rate by 100 bps. One basis point is one-hundredth of a percentage point.
Analysts are expecting another 50-75 bps rate hike this calendar year and this will make bank loan more expensive.
A 1% increase in rate translates into Rs.74 increase in housing loan EMI for every Rs.1 lakh loan for 15 years, according to an SBI official who spoke on condition of anonymity. The average home loan size is about Rs.19 lakh. This means, a 2% increase would lead to a Rs.2,812 rise in EMIs.
However, the actual hit could be even more severe.
Most home loan consumers took loans at special fixed rates for the first three years starting in 2009. Borrowers had to pay 8% in the first year and 9% for the next two years, and after this, the rate is to be adjusted to market rates, at base rate plus 1% or more for loans under Rs.30 lakh.
With the latest round of hike, SBI’s base rate is 9.25%, and if indeed RBI raises its policy rate by 75 bps, it can go up to 10% by the year end. This means, the home loan rate can be 11%. A 300 bps hike would lead to a Rs.4,218 rise in EMIs for a Rs.19 lakh loan.
Like SBI, ICICI Bank Ltd, the largest private bank in India, has also hiked its base rate to 9.25% now from 8.25% at the end of December.
Source: livemint.com
Say you took a 20-year, Rs 30-lakh, 9.5 per cent per annum home loan two years ago, and have paid off Rs 6.7 lakhs at Rs 28,000 a month.
If you now ask the lending institution for your amortisation schedule or use the EMI calculator, you will find that you have repaid a mere Rs 1 lakh of the principal.
Still Rs 28.9 lakh to go.
When the interest rate goes up to 11 per cent, you have two choices before you: Up your EMI (equated monthly instalment) to Rs 30,780, or extend the repayment period.
Hard to say which is better. Until someone tells you that with an EMI hike, you will have to shell out Rs 37.5 lakh as interest over the remaining 18 years.
While, if you extend the repayment period, leaving the EMI unchanged, your loan will run on for another 26 years.
As if this were not bad enough, your interest burden, too, will go up, to more than Rs 58 lakh; almost twice as large as the loan you took.
As a general rule, it is always better to go for a higher EMI. Specially if this pinches; as in the case of steep interest hikes on long duration loans which you do not wish to extend.
One last thing. A hike in the interest rate from 10 to 11 per cent, increases your interest liability by 10 per cent, not just one.
And that’s before bringing compounding into the picture
Source: thehindubusinessline.com
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Since the start of 2011, many things were in headlines, like the budget of 2011, Stock Market Crash, DB Reality Scam, LIC housing finance Fraud and other scams and the Reserve Bank of India’s Base Rate!
RBI’s decision to increase it’s base rate periodically by 0.25 per cent resulted in many Indian banks to increase it’s lending rate which directly affected the loan seekers very badly.
Home loan, personal loan, car loan rates have increased gradually. HDFC, sbi and many other banks have decided to increasing it’s prime lending rate from this month on.
To help decrease the inflation, RBI takes this step by increasing Repo Rate and Cash Reserve Ratio.
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If you are heading towards ICICI Bank for your home loan than you are moving right steps forward for your family ‘ s shelter. ICICI Bank home loans, have a really good system for its customers by offering the best price without hassles. Home Loan can help you lay the foundation for your dream home.
ICICI Bank is one of the leading home loan provider, understands how special building a new home is for you. Some plans will bring a smile to your face a little ‘, not to think about what are the conditions on the interesting features that make us feel the dream of the family.
Some of the benefits offered by ICICI Bank for home loans: -
- Treat you through-out the process.
- Offers amount suitable to your needs.
- 20 years period.
- Easygoing Documentation.
- Attractive interest rates.
- Sanction approval without having selected a property.
- Insurance options for your home loan at attractive premium.
You can make your prepayment in either part or full. There is no charge on part prepayment. In case of full prepayment, the charge levied is 2% of the principal outstanding at the time of fore closure and amounts prepaid in the last one year.
It is my experience from home loan application.
I had a tough time in getting home loan as nowadays all banks are taking a lot of time to verify personal as well as official documents.
Here is what I experienced from these three banks for home loan:
- SBI home loan-This bank was good, not when it comes to customer care experience ,but in terms of fair practice and reasonable rates. Approval of the loan took around 6weeks. One will have to do lot of running around and follow up with sbi office. You also have to force the SBI employees to get the loan process done. Which is bias in a public sector bank. What makes SBI isolate from others is that they are very fair and also honourable. Many private banks cheat customers when applying for loan. SBI is very sincere in that. SBI’s Rates are affordable. The verification of apartment documents and a copy of verification report by advocate and also a valuation report is been provided by them which is rarely seen with other banks. Apply to private banks only if you are having some trouble with SBI.
- HDFC Home Loan- Being recognised for housing finance, this bank is good for nothing and worst bank in finance market. They are immoral and more than this they are expensive. Service is bad than a public sector bank. This is worst loan provider. They don’t give you any verification report from advocate. Also ask for many documents after taking processing fee and delay loan process up to 30 days
- ICICI Bank Home Loan - Too Expensive. They offer any service with hidden charges added to it. But service is excellent. Loan process is fast. But too expensive. Their interest rates changes as soon as RBI hike its rates. Also the hope of decrease in interest rates will be less till the RBI does it.
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HDFC Home Loan, HDFC Loan, Home loan, Home Loan Experience, Home loan in India, Home Loan Scheme, housing loan, Housing Loan India, icici bank home loan, ICICI Loan, loans in india, sbi home loan, SBI Loan
The percentage of principle that is paid as a fee (the interest), over certain period of time, is called the interest rate.
Interest rates are charged specially on loans i.e- personal loan, home loan, car loan and last but not the least credit cards, every month for a period of time.
Interest rate for home loan have cut down for loan up to 20lakhs.Reducing rates can benefit some developers in small cities. Whereas in big commercial cities like Mumbai & New Delhi, it is helpless for the developer as the rate cut will not help their existing projects in these metro cities as current prices are way above the loan limit set by banks.
The cut off in interest rate will help a bit by regaining it’s demand for housing loan.
In a conference with CFO of DLF, said that some projects of DLF’s in New Gurgaon and Chennai, which offer homes for about Rs 28 lakh, will benefit in some way due to reduced interest rate.
Because of the huge demand in the Rs 20-25 lakh category and incentives extended by banks, India’s largest listed developer plans to have ‘many’ launches in the forthcoming year in said category.
In the race of developing budget homes, small developers are expecting that large developers would collaborate with them in making budget homes.
Developers are already reducing the size of apartments and offering less facilities to bring down the cost of dwelling unit.
The rate cut is not going to help developer in anyways, because at present, they are not building houses priced close to Rs 20 lakhs. And, who has the money to purchase cheaper land now to start a new project for cheaper homes?
Before buying a “home sweet home” decision is lean on price, interest rate, sentiment. Prices still need to come down by another 15-20% even in small cities to increase the afford ability.” Home buyers in smaller cities also have a lower income level and, therefore, would buy only when prices come down further.
Therefore, the government’s move is aimed at addressing the need of home buyers mainly in smaller cities besides some metropolitan suburbs.
Via: ezinearticles.com
Jaipur: ICICI Bank, India’s largest private sector bank, today announced the launch of a Hindi website, to offer convenience and a wider reach to its customers. ICICI Bank’s website is amongst the top 10 most visited banking and financial websites in the world. With wider internet connectivity, an increasing population can now access the website to suit their banking requirements.
Ms. Chanda Kochhar, Managing Director & CEO, ICICI Bank Ltd. said, “Our Bank is synonymous with growth and innovation focused on customers requirements. We have launched the Hindi version of the personal banking pages on our website to offer our customers with the power to use technology for convenient banking”.
The ICICI Bank website (www.icicibank.com) offers a virtual branch which allows customers to conduct their entire range of banking services online, anywhere, anytime. Customers can now access their bank, credit card, home loans and demat accounts; transfer money, pay bills, open fixed deposits, place a request for different types of services at their convenience.
About ICICI Bank: ICICI Bank Limited (NYSE:IBN) is India’s largest private sector bank and the second largest bank in the country, with consolidated total assets of over $100 billion as on June 30, 2010. ICICI Bank’s subsidiaries include India’s leading private sector insurance companies and among its largest securities brokerage firms, mutual funds and private equity firms. ICICI Bank’s global presence currently spans across 18 countries.
via: icicibank.com
