For the majority of people, owning a home is both an expensive endeavor and one of their fondest goals. Giving such a dream living takes a lot of work from the buyers, and the greatest thing they can do to fit the house into their budget is through a home loan.

Home loans can be used to purchase a new home or apartment, a piece of land, or even to build on an existing plot of land yourself. They can also be used to transfer the remaining balance of an existing home loan from one institution (bank) to another.

Housing loans are available from a variety of housing financing firms, public banks, and private banks. You can borrow money to buy the home of your choice and repay the loan over time in monthly instalments.

Home loan options range from 80% to 90% of the house's market value. The Loan taken Property will be kept by the lender as a mortgage until the loan is fully repaid.

In home Loan service here we are (PROPERTY GUIDE) particularly focusing on nationalized bank for our customers.


Why PROPERTY GUIDE particularly offering home loan service with nationalized bank?

Let’s see the reason in briefly

Difference between NATIONALIZED BANK Vs PRIVATE BANKS & NBFC’S (non-banking finance corporation)

Taking a loan from a public sector bank as opposite to a private bank has significant differences. While our parents would always advise us to purchase it from a public sector bank, Private banks are always a choice for the younger generation

Here are some points for

Differentiating Home Loan process and advantages from a public sector bank when compared with private bank in terms of Processing costs, interest rates reduced by RBI on REPO basis, prepayment facility & fees, part-payment period & amount and customer service.

PROCESSING FEES

               This cost is assessed in order to examine, assess, and complete the documents necessary to process your loan. Despite selling you the product, the bank does not bear this expense most of the time

• Private sector bank on processing fee

Method 1: A lump sum amount determined for the loan amount (e.g. INR 5000/- for loans up to 20 lakhs)

Method 2: calculating in percentage 0.4% or 0.5 % (based on the profile) of the total loan amount

• Public sector bank on processing fee

For first two quarters (April-September) calculating in percentage 0.35% to any customer profile and loan amount in common but with minimum 2,000/- and maximum 10,000/- ceiling amount without GST

Note: Some time from (July - September) public sector banks may consider 50% offer on overall processing fee. For second and third quarter (October - March) bank will surely offer processing fee waive off to their customers.

INTEREST RATES

• Private bank

     Private Banks will raise interest rates immediately in response to RBI (Reserve Bank of India) hikes in REPO rates, however they don't decrease in the same speed while the rate of interest came down for their existing loan borrowers.

• Public sector bank

     In comparison to private banks, public sector banks have more transparent interest rate conversion policies. All loan customers are subject to the same rules, and the lower rate applies to existing customers immediately as well as when the RBI decreased.

PREPAYMENT FACILITY & FEES (charges)

• Private bank

     Private Banks maximum will not let you to prepay the loan without prepayment penalties because if they permit you to prepay, they lose interest revenue. So they will have some hidden terms and condition for their prepayment facility which would cost some charges when the customer decided to pay their loan in advance.

Generally Prepayment charge is mostly 2% of the remaining loan amount during prepayment in private sector so you have to read their terms and conditions of service very carefully before entering into the loan process

• Public sector bank

     You won't be charged anything for prepaying at public sector banks at any time.

PART-PAYMENT PERIOD & AMOUNT

• Private bank

     CASE 1: Typically, private bank may include a restriction for prepayment to any of the amount before to the 90-180 days (3-6 month) mark. Cleverly, the EMIs are created so that the interest component is at its highest during the beginning stages of the loan. This lets the bank earn the most interest possible before you make any prepayments.

     CASE 2: private sector may restrict and limit the prepayment by allowing you to pay once in a quarter while with minimum and sealing amount. Like Above two EMI amount could be considered as minimum part payment which should not be accepted through net banking or online transfer in major of the private banks. To do this part payment, customer have to visit branch with cheque leaf to complete the transaction.

• Public sector bank

     In public sector bank you can start pre-payment from day 2 of the loan starting period itself without any minimum and sealing amount restriction. Public sector banks allowing their customer to make part payment through net banking and online transaction with En-Number of times and with En-number of amount.

CUSTOMER SERVICE

      Customer service can be defined in two various position

•  Pre Loan service

     Pre Loan service is nothing but providing door step service for collecting all the loan related documents from customer and coordinating between customer and loan sanction authorities until the loan gets sanction and loan disbursement.

• After loan service

     Every loan customers requires after loan service without any doubt. Here according to the RBI norms currently banking ROI, Terms & conditions can be revised or changed for every quarter of the year as per the RBI guidance. So, for the product update and to the change for the updated product to their loan account existing loan customers should be taken care by the loan sourcing person for their entire loan tenure.

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