The home loan sector has been buzzing for a very long time now, particularly after the Reserve Bank of India (RBI) cut the repo rate or key policy rate for a record 5 times in succession this year. This decision came in a bid to pass on benefits faster to borrowers and also to ease in the transition to benchmark-linked lending rates as compared to the previous MCLR (marginal cost of fund based lending rate) framework followed earlier.
In recent times, several banks including State Bank of India (SBI, HDFC Bank and others have reduced their lending rates in tandem with the policy rate cut. Several banks are also coming out with special home loan offers and products which have interest rates linked to external benchmarks like the repo rate. Here’s taking a look at some of the latest updates in the sector that you should know more about.
LIC Housing Finance confirms processing fee waiver for loans
LIC Housing Finance has come up with an attractive offer for prospective home loan applicants recently. Customers opting for the maximum tenor of 30 years for their home loans will get a total refund of the processing fees for the loans. This is applicable only if they applied prior to November, 2019 and avail of the loan disbursement by the end of December this year as per the company’s official statement. Interest rates on these home loans start from 8.35%.
New customers will also be receiving an extra interest rebate of Rs. 1 lakh on the home loan along with the Rs. 2.67 lakh subsidy under the PMAY (Pradhan Mantri Awas Yojana) housing scheme. According to the senior management of the company, LIC Housing Finance has exposure of approximately Rs. 1,200 crore for infrastructure projects which have stalled. It is now holding discussions with the project developers for finishing these ventures although the entire process will require a minimum of 1-2 years.
Here are some other key details released by LIC Housing Finance:
- Growth has been steady in the affordable category with loans under the PMAY scheme comprising of 26% of the company’s overall loan basket in comparison to 18-19% in the last year.
- The commercial segment has accounted for 7% of the loan portfolio.
- Average ticket sizes for loans at LIC Housing Finance stand at Rs. 23-25 lakh.
- Demand has increased for logistics, office space and other categories of funding from e-commerce players.
- LIC Housing Finance has witnessed average home buyer age reducing to 25-30 years from more than 35 years earlier.
- LIC Housing Finance disbursed home loans of Rs. 7,342 crore or 19% of its loan book as of March this year for the southern region.
- The company is targeting disbursements of Rs. 55,000 crore for the current financial year in comparison to Rs. 48,000 crore disbursed in the last fiscal.
- 25,000 crore in loans has already been disbursed by the company till now and its non-performing assets or NPAs stand at 2.38% as per the official statements.
ICICI Bank comes up with instant loans
ICICI Bank has confirmed its Maha Loan Dhamaka which will ensure on-spot loans for customers along with manufacturer backed offers led by companies like Hyundai Motors India Limited (HMIL) in rural and semi-urban zones. The offers will also be provided at big corporate campuses for individuals including people who are not current customers of ICICI Bank. 2,000 Maha Loan camps will be organized by ICICI Bank throughout India by end-March, 2020.
Every camp will span 2 days and borrowers can visit with their documents and obtain on-spot loan approval for funding their projects. The first camp has already been started at Deesa in Gujarat’s Banaskantha district. ICICI Bank will be offering home loans, auto loans and more products like special offers for two wheelers, trucks, tractors, farming equipment, gold loans, Kisan Credit Cards and personal loans. These camps will enable people in surrounding areas to access the products at ICICI Bank. At corporate premises, home loans, two/four wheeler loans, personal loans and credit cards will be offered by ICICI Bank.
The Maha Loan camps will be showcasing vehicles from top brands across corporate and rural locations. Here are some of the key benefits on some loan offerings-
- Two-wheeler, truck and equipment loans come with zero processing fees and easy EMIs.
- Instant loans will be given up to 100% of the on-road prices of two-wheelers and up to 95% of the cost of trucks. Loans will be given up to 85% of the cost of equipment.
- 999 flat processing fee for auto loans and Rs. 1,499 for personal loans along with Rs. 2,000 for tractor loans.
- Special offers on select four-wheelers from companies like Hyundai Motors India Limited.
- 50% reduction in processing fees for gold loans exceeding Rs. 2 lakh.
- 50% discounts on processing charges and zero legal and technical verification charges for Kisan Credit Cards.
- KCC overdraft facility provision for 5 years, subject to reviews annually.
A lot is happening in the home loan sector at the moment. ICICI’s instant home loans and LIC Housing Finance’s processing fee waiver are attractive offers for borrowers in recent times.