Showing posts with label housing loan rates. Show all posts
Showing posts with label housing loan rates. Show all posts

Wednesday, January 9, 2013

How Eligibility Calculators help in availing home loans?

Eligibility calculation is one of the important aspects of home loan processing. Banks calculate home loan eligibility of each and every customer who applied for a home loan by taking applicant and co-applicants income into consideration before giving a sanction letter to the customer. A little idea on how this eligibility is calculated will make much difference in the process of home loan.

The process of eligibility calculation varies from customer to customer depending on the income source. If the customer is a salaried customer then the sum of regular components of salary is taken into consideration along with 50% of the variable pay for the calculation of eligibility. If the co-applicant income is also considered then the same principle will be applicable to the co-applicant also. After arriving at a component both the applicant incomes is added and take a maximum of 60% of the salary for the contribution of home loan EMI. If any liabilities are there then the component of their EMI will be deducted from this amount and on the remaining amount the eligibility is calculated by dividing the amount with the per lace EMI component of the home loan interest rate charged for the desired tenure or applicable tenure which results the home loan eligibility.

The Eligibility process is the same for the NRI Salaried also the only difference is the amount is converted to Indian currency before calculating the eligibility. The calculation differs a bit for self employed whose gross income along with depreciation, Interest paid, and remunerations are considered for the calculation and remaining process is same. The calculated eligibility by the bank is final. Liabilities that a customer would like to close to avail a home loan will not be considered as a liability and liabilities below 6 months are also not considered. Having liabilities will decrease the loan eligibility and it is always suggestible to close all the liabilities before applying for a home loan for comfortable repayment of home loan.

Eligibility calculators help you to know how much amount you will be eligible for if you go for a housing loan depending on your requirement. The Eligibility calculators will take all the information about your income and your requirement's then give final eligibility depending on the values provided. The value arrived finally may vary from bank to bank depending on product and tenure considerations.


Wednesday, December 26, 2012

How to manage EMI Effectively?

EMI refers to Equated Monthly Installments a key term in all loan products which stands for the loan repayments to the bank. The EMI is calculated by taking the loan amount, Interest Rate and repayment tenure into consideration. All the Banks and Financial Institutions do the calculations in the same manner so the amount will not change from one bank to other. All the EMI are calculated on diminishing rate which is mandatory in Home Loans.

Banks provide the facility of repaying the loan in Equated Monthly Installments which is a combination of Principal and Interest Components. The EMI will have Interest Component higher in the initial stage of tenure and as the tenure goes on the Principal component increases and the interest component decreases. 

The EMI can be increased if the income of the applicant increases. But the cant be reduced once it is fixed. If the customer wants to make any part-payments during the repayment tenure then the paid amount will be directly deducted from the outstanding principle and tenure will be re-scheduled according to the latest outstanding amount by keeping the EMI fixed at the same amount. This provision is available only for the Home loan customers. 

Banks reserves the right to reschedule the loan tenure if there is any change in the home loan interest rates on the Loan that the customer has availed. If there is any change then banks will increase the tenure first and if the tenure is crossing 300 months then banks increase the EMI as there is a cap on repayment tenure for 300 months. If the Interest rate reduces then banks decrease the repayment tenure but not the EMI. Customers need to personally request the bank to reduce the EMI component and the decision is at the sole discretion of the bank. All the Home loan products attract Tax Exemption under section 80© of Income Tax Act.

Monday, October 15, 2012

Floating or Fixed which is the best to Opt?

It’s been a big myth to customers in opting the interest rate type while going for a Home Loan. Customer seeks their friends, colleagues and relatives advice that already availed a Home Loan. But still it’s been a puzzle to most of the customers how to opt and what to opt when it comes to the home loan interest rates. A little bit of understanding of the two banking terms eases the process of interest rate selection and which gives the best possible returns on the Home Loan over the period or repayment tenure.

All the home loan products are pre packed with two types of rate of interest i.e Fixed and Floating.  Fixed rate of interest is fixed for a limited period of time over the loan even if there are any fluctuations in the rates in the market. Banks will not increase or decrease the rate charged on the loan which is fixed at the time of availing the loan even if the rates comes down or goes up. Banks charge a min of 1% higher rate compared to the current prevailing rate to the customer who opts for the Fixed Rate of Interest. Post the term of Fixed the interest rate will be the rate charged on fresh loans at that time.

The Floating Rate of Interest is based on Base Rate and BPLR rates and charged according to the loan applied slabs. The floating rate can be increased or decreased if there are any fluctuations in the market. Banks revise the rates on quarterly basis on the loan amount and inform the customer about the revision of interest. If the rate is increased then accordingly the repayment tenure will be increased and if Possible banks can Increase the EMI also. 

Going for a fixed rate is better if the fixed tenure is above 3 years and taking conformation from the bank that the rate will not be revised even there are any huge fluctuations in the market makes a sense.

Tuesday, September 20, 2011

Home Loan Interest Rates

Selecting best and least applicable home loan interest rate is most important before going for loan as it is the factor which will be changing according to the market fluctuations and as per the RBI guidelines. The process is very simple and easy in deciding which is the best with a simple home loan interest rate comparison.          

Allahabad Bank
Base Rate 10.75%,Upto 20 lacs 12.00%, Above 20 lacs - 50 lacs 12.75%, Above 50 lacs 13.25%.             
Andhra Bank
Base Rate 10.75%, Upto 20 Lacs 11.75%, Above 20 lacs 12.50%                  
Base Rate 10.00%, Upto 25 Lacs 10.75%, Above 25 lacs - 75 lacs 11.00%, Above 75 lacs 11.25%.            
Bank of Baroda       
Base Rate 10.75%, Upto 30 Lacs 11.75%, Above 30 lacs - 75 lacs 12.50%, Above 75 Lacs 12.75%.           
Bank of India           
Base Rate 10.75%,Upto 25 lacs 11.00%, Above 25 lacs - 75 Lacs 12.00%, Above 75 Lacs 12.25%, Above 75 Lacs 12.50%           
Canara Bank
Base Rate 10.75%, Upto 30 Lacs 11.75%, Above 30 Lacs - 75 lacs 12.50%, Above 75 lacs - 3 Cr 13.50%, Above 3 Cr 14.75%.          
Central Bank of India        
Upto 30 Lacs 12.00%, Above 30 Lacs 12.50%.              

Citi Bank       
Base Rate 9.75%, Upto 75 Lacs 10.25%.            

Dena Bank   
Base Rate 10.70%, Upto 25 Lacs 11.65%, Above 25 lacs - 1 Cr 12.25%, Above 1 Cr - 2 Crs 12.50%, Above 2 Crs 12.75%.           
10.25% - 12.25%              

First Blue Home Finance (Deutsche Postbank)           
Salaried/Self employed professionals 10.25% Upto 25 Lacs,Self Employed Non professional 10.75% upto 25 lacs.            
HDFC Bank   
Base Rate 9.50%, 10.75% up to 30 lacs, Above 30 - 75 lacs 11.00%, Above 75 lacs 11.50%.          
Base Rate 9.50%,Upto 30 Lacs 10.25%- 10.75%, Above 30 Lacs 10.75%.                
IDBI Bank    
Base Rate 10.75%,Upto 25 lacs 11.00%, Above 25 - 30 lacs 11.50% - 11.75%, Above 30 - 75 lacs 11.75%, Above 75 lacs 12.25%                 
ING Vysya    
Upto 30 lacs 10.75%, Above 30 below 75 lacs 11.00%, Above 75 lacs 11.50%           
India Bulls    
Upto 35 lacs 10.75%, Above 35 lacs - 100 lacs 11.00%, Above 1 Cr 11.50%.            
Indian Bank 
Base Rate 10.75%, Upto 20 Lacs 12.00%, Above 20 - 30 Lacs 12.25%, Above 30 Lacs - 2 Cr 12.75%, Above 2 Cr 15.75%.             
Indian Overseas     
Base Rate 10.75%, Upto 30 Lacs 11.25%, Above 30 lacs 11.50%.                 
Karnataka Bank      
Base Rate 11.00%,Upto 25 Lacs 11.25%, Above 25 lacs - 50 lacs 11.75%,Above 50 Lacs - 1 Cr 12.75%.              
Karur Vysya
Upto 20 Lacs 12.50%, Above 20 Lacs - 30 Lacs 13.50%, Aove 30 Lacs 14.25%.                  
Kotak Mahindra      
Base Rate 9.75%, Salaried 11.25%, Self Employed 11.50%.               
Below 30 Lacs 10.50 %, Above 30 - 75 Lacs 10.75%, Above 75 Lacs 11.00%.           
Oriental Bank of Commerce         
Base Rate 10.75%, Upto 30 lacs 11.50%, Above 30 - 75 lacs 12.25%, Above 75 lacs - 3 Cr 12.50%.          
Punjab National Bank        
Base Rate 10.75%, Upto 30 Lacs 11.75%, Above 30 Lacs - 75 lacs 12.50%,Above 75 Lacs 12.75%.           
State Bank of India
Base Rate 10.00%, Upto 30 Lacs 10.75%,Above 30 lacs - 75 lacs 11.00%,Above 75 Lacs 11.25%.             

State Bank of Hyderabad 
Upto 30 lacs 11.25%, Above 30 Lacs 12%.          

Syndicate Bank       
Base Rate 10.75%,Upto 25 Lacs 11.00%, Above 25 Lacs - 75 lacs 12.50%, Above 75 lacs 12.75%.            
UCO Bank     
Base Rate 10.75%, Upto 20 Lacs 11.75% - 12.25%, Above 20 - 30 Lacs 12.00% - 12.50%, Above 30 - 50 Lacs 12.75% - 13.25%, Above 50 Lacs 12.75% - 13.25%.               
Union Bank of India           
Base Rate 10.25%, Upto 30 lacs 11.25%, Above 30 - 50 lacs 12.00%, Above 50 lacs - 2 Cr 12.00%, Above 2 Cr 12.25%.