Most of us are conversant with traditional Home Loan Plans wherein we pay installment on our loan every month. But to your surprise, many home loan providers have started offering different Home Loan variants with extra features and benefits. So as to attract new customers and grab more market share, the Home Loan lenders have started promoting a wide range of Home Loan products. Availability of various alternatives helps you to pick the best plan matching your requirements. If you are planning to avail Home Loan in the near future, then this article will help you to know the most popular Home Loan variants available in the market.
Home Loan Variants with assorted features & benefits
Apart from the traditional Home Loan products, there are some distinctive HL variants available in the market. A few are listed as under:
Home Loan OverDraft:
This is a unique product as the Home Loan is given in the form of an OverDraft account (i.e. account balance initially shows as negative) in the name of the borrower, who, under this Home Loan Scheme has the freedom to use this account as a savings plus OverDraft (OD) account. Bank provides the cheque book and net banking facility to its borrowers so that they can park the surplus funds in their OD account. The borrowers can also withdraw the funds as per their requirement. With the net banking facility, it is very easy to manage your Home Loan account. This product is extremely beneficial for those who sometimes have surplus cash and want to save on the interest payment on their home loan.
If you avail the traditional Home Loan plan, then you have to approach your lender each time, you plan to pre-pay your home loan. You might have to wait in the queue, complete the documentation and other formalities for pre-payment. Whereas, opting for a Home Loan OverDraft plan helps you to avoid all these hassles. Banks like SBI (SBI Maxgain) and Citi Bank (Home Credit Advantage) are offering OverDraft facility with their Home Loan products.
Home Loan for Women:
ICICI bank and SBI are offering special rate of interest (@10.10%) to new borrowers who are women. Along with this, a few Banks are also offering longer term (up to 30 years) to repay the loan which thereby reduces their monthly EMI. Moreover, you need not walk-in to the branch to get your loan sanctioned. ICICI Bank swanks to provide doorstep service at your comfort. So this Home Loan variant is best for working women who have other financial responsibilities and cannot afford to repay a bigger EMI every month.
Home Loan Top Up:
This is a top-up loan provided by a Bank/ lender to its existing Home Loan customers. When a borrower avails a Home Loan from any lender, then after successful repayment of his loan for minimum 12 months, he/ she gets eligible for additional loan against his existing property mortgaged with the Bank. This additional loan is called a top-up to existing Home Loan. The funds from this type of loan can be availed for personal use like purchase of car, furniture, Children’s marriage or education, medical expenses and even for business requirements. Other lenders normally fund up to 80-90% of original loan amount whereas ICICI Bank extends the loan up to 100% and IDBI bank lends even more than 100% of the original loan amount under special circumstances.
Step Down Loan Facility:
After successful repayment over a time period, the borrowers are offered an option to reduce their EMI under this loan type. Axis Bank’s Empower Home Loan is an example of Step down loan facility. Axis Bank has designed this product for self-employed professionals who repay their loan installments regularly without delay. This is an instant loan offered by Axis Bank to those who have a good banking/ repayment track. In addition, the borrowers get 3 assured rate reductions on maintaining a good repayment track with the Bank for 24, 36 and 60 months from the date of first disbursement for availing the 1st, 2nd and 3rd rate reduction. In other words, Axis Bank pays loyalty bonus to its borrowers.
Home Loan Variants with ROI (Rate of Interest):
Following are a few lenders that are providing the best rates on their home loans. From the below table, we can make out that most of the lenders are offering same range of interest. However, if you have a good repayment track record and a good banking history, then you can negotiate with the lender for lower rate of interest. Most of the lenders provide discounts to their existing customers with good banking record.
|Lender Name||Maximum Funding (Loan to Value of property)||Maximum Term||Variable Rates|
|HDFC Limited||Up to 80%||30 years||10.50% – 11.25%|
|ICICI Bank||Details not available||30 years||10.15% – 11.25% (10.10% for Women)|
|Axis Bank||Up to 85%||30 years||10.25% – 12.25%|
|SBI||Up to 90%||30 Years||10.15% – 10.30% (10.10% for Women)|
|Citi Bank||Up to 80%||25 Years||10% – 11.25%|
|IDBI Bank||Up to 90%||30 Years||10.25% – 13.25%|
|HSBC Bank||Up to 80%||25 Years||10.50% – 12%|
Note: The above mentioned is the rate of interest as on May 29th, 2014. As the interest rates fluctuate from time to time, the borrower is however, suggested to check the current prevailing rate before applying for a loan.
We, at BankBazaar, always strive to provide the best Home Loan deals to the borrowers.
YOU MAY ALSO WANT TO: Figure out which plan works out for you – Home Loan EMI Calculator