Everybody wants to live with his family independently in their own house, but most of us don’t have enough money to buy a house. ‘Home Loan’ is an easy solution to this problem. There are many banks, that provide solace to the needy people by granting home loans.
Most of the banks have their own home loan department that cater to the needs of their customers. It is a good news for the Indian people that the interest rates have fallen down from the last 10 years and thus, it’s not a difficult task to take home-loan these days.
Now many new schemes are provided for the ease of the home-loan aspirants. Some innovative plans are mentioned below:
Step-Up Plan : According to this newly introduced plan, one can get more loan if his income level increases in the span of time. It is based on the principle that if one’s income increase so does his capacity to repay the loan, thus he can opt for less repayment option in the beginning and thereafter keep on paying higher equated monthly installments, as their income increases with the span of time. But, one also must make sure that the lower EMIs in first few years, means that you have to pay more interest in the later years.
Top-Up Plan : It is a wonderful scheme for the home-loan aspirants who want to take loan for other purposes besides the building of the house. For instance, one wants to buy a car, home theatre system or go for a holiday. He can take the top-up-loan alongwith the home loan, and use it for all purposes that solve his financial problems.
Transaction Account : Under this innovative scheme, the bank opens up a bank account of the borrowers, that works like a normal bank account with a little difference. In normal savings account one earns 3% rate of interest but in transaction account, the person can earn more than twice the rate of interest; as the rate of interest of transaction account is 7-8%, but the difference between normal savings account and transaction account is that the deposits of saving account could be used for all purposes, while the deposits of the transaction account could only be used to repay or prepay the home-loan.
Hybrid Loan : This is a plan introduced by high standard banks. These banks offer a scheme in which the loan amount is split into two parts—one on a floating rate of interest and other on a fixed rate. The floating rate of interest is linked with the market-rate of interest. If the rate of interest in the market goes up, it shall too increase, if it goes down, it shall too decrease, but the fixed rate shall remain the same, as it is not inter-related with the market rate. In Hybrid loan plan, the home aspirant would have to pay both the floating rate of interest and fixed rate at a specified ratio. For instance, 50:50, that means the borrower would have to pay 50% floating rate and 50% fixed rate of interest on the loan amount.
This plan is quite beneficial for the borrower who has taken the loan for a long tenure, due to two reasons—firstly, that if the market rate of interest decreases, the floating rate of interest shall too decrease thus, the borrower shall be benefitted for the same. Secondly, since on one part of loan amount, he has to pay fixed rate of interest, that shall remain fixed irrespective of market rate, therefore if, the rates go up, it shall remain unchanged and thus the borrower shall not have to pay more interest.
These new innovative schemes have added joy in the life of home-aspirants, as now they can turn their dreams of owning a ‘Home, Sweet Home’ into a reality and live in comfort for their whole life in their own house.
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