A recent press report said that banks have offered discounts on home loans for the festival season in the country. The special offers announced by the banks include dual rate scheme, Discount on processing fee, Concessions on loan, Progressive monthly installment scheme, fixed rate scheme etc.
As per the dual rate scheme, the interest rate is fixed for the first few years and then changes to the prevailing interest rate. ICICI bank offers home loans at dual rate of interest, where the interest rate is fixed for first year and second year.
Discount on processing fee offers discount on total cost of loan. Punjab National Bank is one such bank that has done away with the processing fee. Reports said that the discount on processing fee is likely to lower down the cost of home loan by few points.
Reports also said that State Bank of India, Dena Bank, and Corporation Bank have offered discount of few basis points for home loan till the end of December 2011 as a concession on loan to their borrowers.
Reports added saying that there are banks that offer loans on progressive monthly installment scheme where the borrower’s liability or EMI will depend on increase in his/ her salary. This will allow the EMI of the borrower to be lower in first few years and then become regular after the period.