A shelter is a basic necessity of life, however a home is much more than that. It is not just a place to stay but a place to live. A home is the place which strengthens the family and creates special moments in life. Therefore, every individual has a dream to build one’s own house. Unfortunately dreams are no more free and come true only with a huge price. To cater to this difficulty, the banking industry has designed the policy of home loan which allows you to borrow an amount from the bank in order to live your dream of building a house. This funding is being provided by all the leading banks of the country such as IDBI, ICICI, Axis Bank and HDFC. As in the other cases, HDFC is one of the favourites among the populace and it is therefore important to understand the features of housing loan at HDFC. Distinct features
- HDFC provides home loan for the purchase of a flat, row house, bungalow or independent floors from private developers in approved projects and properties from Development Authorities such as DDA, MHADA etc.
- Expert legal and technical counselling is provided to the clients.
- HDFC has an extensive branch network in order to reach out to the clients in remote areas too.
- HDFC takes special care of the employees of the Indian Army, having special arrangements with Army Group Insurance Fund ( AGIF).
Funding
HDFC provides funding to the applicants in consonance with the following tabular data.
Loan Amount
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Maximum Funding
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Up to and including Rs.30 lacs
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90% of the property cost
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Rs.30.01 lacs to Rs.75 lacs
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80% of the property cost
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Above Rs.75 lacs
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75% of the property cost
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It is essential to compare this data with the similar funding of other banks. This data has been presented below.
At other banks such as HSBC, the funding depends on several other factors such as the location and state. Leaving such banks aside, most of the banks offer a similar range of funding depending on certain factors. Rate of Interest
- HDFC Bank provides housing loan to women at the rate of interest of 9.4% to 9.9% per annum under the category of adjustable loan rate. TruFixed loan is lended to women at a rate of interest ranging from 9.5% to 10.2% per annum. For the other sexes the interest rate for the former category lies between 9.45% to 9.95% per annum and that of the latter ranges from 9.7% to 10.25% per annum.
- The interest rates of other banks have been compiled in the following table in a concise manner.
Bank
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Rate of Interest
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Lowest EMI per Rs. 1 Lakh for maximum tenure
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Axis Bank
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Up to Rs 28 Lakhs-9.45% to 9.55% Above Rs 28 Lakhs - 9.5% - 9.6% Floating
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Rs 837 for 30 Years
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HSBC
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Up to Rs 50 Lakhs - 9.55%, Above Rs 50 Lakhs - 9.55% Floating
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Rs 877 for 25 Years
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Bank
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Rate of Interest
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Lowest EMI per Rs. 1 Lakh for maximum tenure
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ICICI
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Up to Rs 75 Lakhs - 9.4% - 9.45%, Above Rs 75 Lakhs - 9.4% - 9.45%, Above Rs 5 Crore - 9.65% - 9.7% Floating
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Rs 834 for 30 Years
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IDBI
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Upto Rs 25 Lakhs - 9.6%, Above Rs 25 Lakhs - 9.6% Floating
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Rs 848 for 30 Years
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SBI
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Upto Rs 75 Lakhs - 9.35% - 9.4%, Above Rs 75 Lakhs - 9.35% - 9.4% Floating
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Rs 830 for 30 Years
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HDFC
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Upto Rs 75 Lakhs - 9.4% - 9.95%, Above Rs 75 Lakhs - 9.4% - 9.95% Floating
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Rs 834 for 30 Years
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Documents required
Documents
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HDFC
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HSBC
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Axis Bank
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ICICI
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IDBI
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Proof of identity and residence
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YES
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YES
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YES
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YES
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YES
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Property related documents
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Copy of allotment letter/Buyer agreement and receipts of payments made to dealers
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|
|
|
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Proof of age
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YES
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YES
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Latest salary slips
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YES
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YES
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YES
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YES
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YES
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Application form with photograph
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YES
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YES
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YES
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YES
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YES
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Processing fees cheque
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YES
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|
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YES
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YES
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Bank statement
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YES
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YES
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YES
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YES
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YES
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Form 16/ITR
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YES
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|
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YES
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YES
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Others
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Employment contract
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|
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Educational qualification and business proofs for self employed borrowers
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Educational qualification and business proofs for self employed borrowers
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Charges and Repayment
- HDFC levies processing fees of up to 0.50% of the loan amount or Rs.2,000 whichever is higher, plus applicable taxes.
- No prepayment charges are levied on account of part or full prepayments of the loan granted to individual clients.
- There are no prepayment charges payable for any amount up to 25% of the opening principal balance for a given financial year.
- Any part prepayment in excess of 25% or full prepayment bears a prepayment charge of 2%, plus applicable taxes, if made within 3 years from the date of first disbursement of the loan (such amounts include all amounts prepaid during the given financial year).
- There are no prepayment charges payable for any part prepayment if such a part prepayment is made after 3 years from the date of first disbursement of the loan.
- Full prepayment made after 3 years from date of first disbursement of the loan bears a prepayment charge of 2%, plus applicable taxes, if the prepayment is made by borrowing from a Bank / Housing Finance Company (HFC) / Non Banking Financial Company (NBFC) or Financial Institution. (such amounts will include all amounts prepaid during the given financial year).
- Conversion fees, as applicable, is charged on switching by a client.
- Other charges include property insurance, cheque dishonour charges, incidental charges, regulatory charges, fees on account of external opinion and charges on account of delayed payment. Charges levied by leading banks are quite similar to each other.
- Borrowers are given several repayment options at HDFC -- Set up repayment, Flexible loan installment plan, tranche-based EMI, Accelerated repayment scheme and Telescopic repayment options. These alternatives have been provided in order to suit the requirements of different clients and hence accommodate the wide range of clients.
On a closing note, it is not incorrect to infer out of this data that HDFC is one of the convenient options among the leading banks. The rates of interest are not irrelevantly high and the process has been made hassle free. There are several repayment options with distinct schemes. Nevertheless other alternatives must also be analyzed and the appropriate bank should be chosen which suits one’s requirements.
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