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  • IOB Home Improvement Scheme

    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 7.25% p.a. with a processing fee of 0.50% of the loan amount.

    Interest Rates

    IOB offers floating interest rates on the Home Improvement Scheme, where the rates are pegged to the bank’s RLLR.The current 1-year RLLR of IOB is 6.85%.A ‘spread’ will be added to the RLLR 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 RLLR + Spread Effective Interest Rate (EIR)
    Up to Rs.2 lakh 6.85% + 0.40% 7.25% p.a.
    Above Rs.2 lakh 6.85% + 0.55% 7.40% p.a.

    Features and Benefits

    If you are considering applying for this loan, here are the comprehensive features and benefits that are offered on this loan:

    • You can use the loan amount for upgradation, renovation, or modifications including painting, fixing marbles, changing tiles, undertake routine repairs, woodwork, adding cupboards, and more.
    • You can apply for a loan amount between Rs.25,000 and Rs.15 lakh.
    • Enjoy a holiday period of 3 months on this loan after which your repayments will commence.
    • There are no prepayment charges on this home loan.
    • The repayment tenure is up to 12 years.

    Eligibility Criteria

    If you want to apply for the Home Improvement Scheme, here are the criteria that you will have to meet:

    • You should own a residential flat or house.
    • Salaried employees and self-employed individuals are eligible for this housing loan scheme.
    • For salaried employees – You must be in confirmed service where your take home pay is at least 50% of your gross salary.
    • For business people/professionals – You must have a minimum of 3 years’ experience in your field.
    • The property which you wish to renovate must be mortgaged to the bank.


    1. What is the maximum processing fee applicable on the Home Improvement Scheme?

      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.

    2. How will the bank determine my maximum loan amount?

      Your maximum loan amount will be determined based on the estimate of the work to be done and your repayment capability.

    3. The property I wish to renovate cannot be mortgaged? Can I still apply for this home loan by offering another security to the bank?

      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.

    4. How should the repayments be made on this housing loan?

      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.

    5. How do I apply for the IOB Home Improvement Scheme?

      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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