The Home Improvement Scheme offered by Indian Overseas Bank (IOB) is a type of home loan offered to salaried and self-employed individuals who wish to make improvements to their existing home through repairs, modifications, upgradation, etc. The interest rates on this home loan scheme starts from 8.70% p.a. with a processing fee of 0.50% of the loan amount.
IOB offers floating interest rates on the Home Improvement Scheme, where the rates are pegged to the bank’s 1-year MCLR (Marginal Cost of funds-based Lending Rate). The current 1-year MCLR of IOB is 8.50%. A ‘spread’ will be added to the MCLR that will make up your final interest rate on this loan.
The final interest rate that you will be offered on your home loan will be based on your loan amount:
|Loan Amount||MCLR + Spread||Effective Interest Rate (EIR)|
|Up to Rs.2 lakh||8.50% + 0.20%||8.70% p.a.|
|Above Rs.2 lakh||8.50% + 0.35%||8.85% p.a.|
If you are considering applying for this loan, here are the comprehensive features and benefits that are offered on this loan:
If you want to apply for the Home Improvement Scheme, here are the criteria that you will have to meet:
The maximum processing fee that you will be charged when applying for this home loan will be 0.50% of the loan amount with a maximum fee of Rs.20,000.
Your maximum loan amount will be determined based on the estimate of the work to be done and your repayment capability.
Yes. If the property you wish to renovate cannot be mortgaged to Indian Overseas Bank, then you will have to provide another property in your name having a market value of twice your loan amount as security.
The repayments on this housing loan should be made in equated monthly instalments or EMIs. It will have to be repaid in a maximum of 144 EMIs. However, remember that the repayment period will also be based on the number of years you have remaining in service.
You will have to download the application form from IOB’s website, take a print out of it, fill in the requested information, attach your passport size photograph, and submit it to a bank branch along with any documents requested by the bank.
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