Car and Home Loan Sectors Set for a Boost in 2016
The Indian economy is seeing a resurgence, with home and car loan demand on the upswing, according to the ICICI Bank CEO. Government measures to stimulate coal and iron ore production and transport projects have led to a demand for commercial vehicles. Home loans have seen a rise as more first-time home buyers are joining the workforce each year, leading to demand.
She also stated there was no competition between full service banks and small finance ones, instead saying they would complement the current system. The full service banks would provide a bigger product range and build long standing relationships with their customers, with the small finance ones emphasizing on different payment alternatives and convenience to the customer.
8th February 2016
Wooing the lady with lucrative home loan deals
Women loan applicants are being offered fabulous loan options with reduced interest rates and other perks. Yes, it pays to be a woman when you look at the customized schemes and other terms and conditions. Public and private sector lenders as well as NBFCs are competing with each other to entice women to apply for their home loan products. Some of the perks are on the platter even if you are woman co-borrower.
When buying a house or apartment with the aid of a bank loan, the interest rate will be less for a lady client. For instance, SBI’s ‘Her Ghar’ housing loan products proffer a reduction of five basis points (bps) for females. The present interest rate for women is 20 bps above the base rate of 9.3 percent. You may feel that this rebate is not much. But since the loan sum tends to be quite high, it certainly counts. For instance, you can save INR 48,000 on a housing loan of INR 50 lacs, over a 20 year tenure.
19th January 2016
19 percent contribution to home loan growth by small towns
Home loan portfolio is one arena where both public and private lenders are concentrating a lot these days. According to a report covered by Times of India, small towns are the predominant engine behind the steep upsurge in the housing loan market. A range of perks, offers and rebates are thrown in by builders and marketers to entice customers, not to mention partner banks promising swift loan approval. There is a mounting ambition to live in one’s own home, bought with one’s own hard earned money. This is especially true for two tier cities and small towns. The spotlight is now on smaller banks as shown below.
Details for home loan portfolio growth in the current financial year:
Syndicate Bank – 76 percent,
Central Bank & Andhra Bank - 30 percent,
ICICI Bank - 28 percent,
HDFC - 23 percent.
SBI – 15 percent.
25th November 2015
Home loan disbursal stands at INR 1012 crore
Commercial banks in Orissa gave out over INR 1012 crore of home loans in the first half (April-September) of the present financial year according to a statement released by the State Level Bankers’ Committee (SLBC). In house loan sector, the sum has been distributed to 11,978 customers. Giving a detailed account of remaining amount, INR 9567.05 crores is pending in the housing mortgage segment alone, which will be distributed to 180,604 loan account holders. Likewise, the remaining balance in student loan sector stands at INR 2182.59 crores as of last September in 73,072 accounts. Among public sector banks, SBI had the maximum disbursal of INR 377.28 crore to 3,733 accounts. Next comes UCO Bank with INR 66.76 crores to 586 loan accounts. Among private lenders, Axis Bank is leading with INR 101.15 crores to 454 mortgage accounts, followed by ICICI Bank with INR 96.60 crores of distribution to 312 accounts.
17th November 2015
RBI Governor Offers boost to PM’s target of ‘Housing for All’ by 2022
Honorable Prime Minister Narendra Modi’s ambitious initiative ‘House for All’ finds encouragement in RBI Governor, Mr. Raghuram Ranjan’s bold move in slashing repo rates by 50 bps. It is indeed a fillip in the plan to put a roof over the country’s populace of 1.3 billion citizens. Home loans rules and interest rates are expected to ease out a bit in time. Rajan’s schemes are beginning to bring positive outcomes in a fillip to Modi’s goal for 2 crore homes by 2022. SBI, India’s largest public bank informed on the same that it is gauging the effect of the decrease in risk weights and might contemplate further lowering of mortgaging expenses for house purchasers after having dropped its home loan interest rates recently. In the Indian real estate arena, loan penetration is pretty less and hence this move is definitely a start to expand the same.
02nd November 2015
RBI rate cut – folks not over the pleasant shocker!
One week into the path-breaking repo rate cut of 50 bps from RBI, the customers and real estate stakeholders still seem to be celebrating. This bold step of reducing the rates to 6.75 percent by RBI Governor, Raghuram Rajan, was quick to garner support with many banks announcing rate cuts in their individual home loan policies too. This decision is expected to give that much-needed lift to housing demands in our country as the economic growth had quite braked in the second financial quarter. Many financial analysts have been insistent about a rate cut at this time where inflation showed signs of going on a hiatus. Mr. Rajan too maintained this as his priority, which has paid off.
27th October 2015
RBI rate slash to give a new lease of life to home purchasers
With the RBI's reduction in home loan interest rates, this welcome step can boost the already-besieged housing loan arena. The thought was echoed by Mr. Sushil Mohta, the Chairman of Confederation of Real Estate Developers' Association of India (Credai), which is the authoritative body of all chief constructors in West Bengal. According to him, if interest rate on housing loan dipped under 10 percent, it could have a significant effect on the mindset of potential house buyers.
The rate cut will also be music to the ears of prevailing clients as many of them have availed house loans on floating rates rather than fixed rates. Once the particular bank slashes the interest rates, the EMI disbursement will be way less. And the money thus saved could be used for better investment or to settle the loan faster. It is about keeping up the morale of the customers, after all.
21st October 2015
2015 festive season sees increased loan offers
With the festive period approaching, banks and financiers, fraught with the dawdling of settling business loans, are coming up with new offers with their housing loans among others. They have even repackaged their current home loan products. Axis Bank, for example, is about to unveil celebratory offers including rebates on processing charges of house and automobile loans. The bank is also preparing to merge every one of their insurance product and have distinct vehicle loan policies and have them affiliated with renowned enterprises.
Mr. Jairam Sridharan, the head of retail banking in Axis Bank is positive about the numerous schemes that are hitting the market. Progress in the retail arena has been vigorous. He also admits that weak performance in major market like Delhi continues. He is hoping that the new schemes will bring about a paradigm shift. This trend is quickly taken up by other major public banks like Bank of Baroda and State Bank of India.
7th October 2015
Cheaper home loans with unbelievable rate cuts, RBI
RBI has publicized the much-awaited and welcome slashes in home loans, which is a 50 bps deduction in the policy rate to 6.75 percent. This is a huge relief for prospective home purchasers as most banks and financiers will be forced to bring down the lending rates. The decreased repo rate, the rate at which RBI advances to banks from 7.25 percent, has come as a huge shock to the housing loan market which had anticipated a mere 25 basis point cut. But again, it is doubtful that banks will reduce their standard lending rate even by a single point. But according to Mr. P Srinivas, the CEO and MD of United Bank of India, the transmission will soon happen, benefitting the customers in general. Mr. B K Batra, MD of IDBI too echoed the thought. India’s biggest public sector bank, SBI has brought down its base rate at 9.70 percent, while private bank, HDFC has fixed its floor lending rate at 9.35 percent.
30th September 2015
Home Loans to be offered at an interest rate of below 6% by the Maharashtra Government.
In an effort to provide affordable housing schemes to individuals, the Maharashtra Government would be reducing the interest rates on home loans. As per a senior state Government official, the home loan interest rates will range between 5.6% and 6% for a particular portion of the loan amount. Currently, the Maharashtra State Government is working with the Centre to finalize on this reduction.
This move has been initiated by the Government to help individuals who find it difficult to pay high EMIs and house rents. The Government is planning to actually ask banks to offer loans at a subsidized rate, with the difference amount being paid by them. With the final decision still pending on this, the Government has to still take permissions from the Central Bank for the same.
4th September 2015
Tax Benefits on Home Loan Repayment
One of the many things that motivate people to purchase a home is the tax incentives that accompany a home loan. However, a home loan has many purposes – construction, upgradation, repairs & renovation. It is important to understand that the tax benefit depends on the purpose of the home loan. The EMI is a combination of the principal repayment and interest component and under section 80C of Income Tax Act 1961, the principal repayment component can be presented for tax deduction with a limit of Rs.1.5 lakhs. Similarly, the upper limit for tax deduction on interest component has been set at Rs.2 lakh a year. This provision can be claimed only if the loan has been availed for a self-occupied property.
For a home loan taken for renovation, alteration or repair, tax deduction can be claimed under 24(b) and the limit for this is set at Rs.30,000 a year for self-occupied property. Also, for home loans availed on or after 1st April 1999, a person can claim deduction up to Rs.2 lakhs only. In case the loan was taken for the purpose of house construction, the same should have constructed completely within three years and the lender must certify that the home loan was taken only to construct or buy a house.
If your loan concerns a residential property that has been rented out, there is no cap for tax deduction irrespective of if the home loan has been taken for repair, renovation or construction.
19th August 2015