The market for home loans has sizably expanded over the last few years and now is possibly the best time to apply for a home loan, considering the low rates of interest and other advantages. The Reserve Bank of India (RBI) has already cut the repo rate several times in succession and this has prompted most Indian banks and NBFCs to lower their lending rates as well. That’s not all; banks like SBI have also come out with repo-rate linked home loan products for customers.
As a result, interest rates are at their lowest levels in many years and with the renewed focus of the Government on affordable and mid-income housing, this is indeed a favorable time for prospective home loan borrowers. In recent times, LIC Housing has come out with an attractive home loan offer for 2020.
LIC Housing Finance Limited unveils special 2020 home loan offer
The 2020 Home Loan Offer has been exclusively unveiled by LIC Housing Finance Limited (LICHFL) on the 15th of January, 2020. This has been called the Pay When You Stay scheme and home buyers have to make the principal payment on home loans only upon getting the possession of the housing unit or post 48 months from the first disbursement of the loan, whichever comes earlier. This exclusive offer will be a major boost for the beleaguered Indian real estate sector in 2020 and will be applicable for Ready to Move and House Under Construction units alike.
In the period of 48 months or till getting possession, the borrower only has to pay interest on the amount that has been disbursed. The CEO and Managing Director at LICHFL, Siddhartha Mohanty, has already opined that the organization has included both real estate segments for greater traction, namely under construction units and ready to move properties. This scheme will ease the monthly EMI repayment burden of borrowers according to him since there is a relief from the principal payment until the maximum period of 48 months. The waiver up to 6 EMIs is a benefit upfront for the borrowers choosing ready to move properties. He also added that LICHFL is aiming at helping the Government achieve its mission of Housing for All by 2022 with such innovative offers.
Some other aspects worth knowing more about
The company, as mentioned earlier, is offering a waiver up to 6 EMIs during the loan tenor for buyers of ready to move properties. Two EMIs each will be waived at the conclusion of the 5th, 10th and 15th years of the home loan tenor. This will be done only on the condition that regular repayments have been made by the borrower without any pre-payments in the first 5 years of the loan. The Pay When You Stay offer will be valid only between the 15th of January and 29th of February, 2020. The disbursement of the loan has to happen prior to the 15th of March, 2020. Rs. 20 lakh is the minimum loan amount under this scheme while Rs. 2 crore is the maximum amount. The interest rate is expected to be 8.10% and higher, depending upon the principal amount for the loan.
SBI (State Bank of India) has also unveiled a confidence-boosting product for borrowers sometime earlier. This is called the RBBG or Residential Builder Finance with Buyer Guarantee scheme. This financially protects home buyers since a guarantee is given by the lender for the completion of the project in question to the home loan customer. The bank remains committed towards a refund for the principal loan amount in case the project is not completed by the real estate developer. Thus, buyers will be able to safeguard their investment in ongoing projects which are financed by SBI. Such home loan products go a long way towards restoring buyer confidence and should certainly play a vital role in boosting real estate sales in 2020.