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From Pensioners To Young Salaried, 3 Home Loan Variants To Help All

Adhil Shetty

Buying a home of your choice is not easy. It involves thorough research and lots of leg work. Besides this you also need to have finances to support your home buying plan. Although there are a number of players in the market to extend you support in home buying, you should do thorough research before zeroing in on a lender. While looking for a home loan, people often look at the interest rate, processing charge and other associated charges. However, not many are aware that many banks also offer home loan variants that are tailored to suit the unique needs of some borrowers. If you are looking to buy a home and you may feel the home loan you are looking at in not meeting your requirements, here are three variants you can seek.

Home Loan Overdraft Facility

This innovative product is akin to a current account with an overdraft limit. Here is how this innovative offering works. If you have surplus funds, you can deposit them in the home loan account. This amount is considered as a pre-payment on the principal amount. But this is different than the usual pre-payment method. Here is how. When you make a pre-payment for a home loan, you reduce your liability, but the prepayment once made does not come back to you. In an overdraft account, the money remains in your account and is considered as pre-payment. You are not charged any interest on this and if you need funds in the future, you can simply withdraw the money from your account, and the loan balance and interest would be readjusted accordingly. This kind of loan facility is meant for individuals who do not have fixed income or who rely on seasonal income and who may need their own money back. Before going for this option, be sure about having a surplus amount in the future. This scheme however is not eligible for tax benefit under Sec 80 (C).

Step Up Home Loan

Meant for young salaried individuals, this innovative home loan option helps those who are looking for higher amount but are not eligible as per the regular home loan norms. So, if you have just begun your career but cannot afford a higher EMI, this can be a handy option. This enables a home buyer to pay lower EMIs in the initial year, and thereafter the EMI increases in the subsequent years. While sanctioning this loan, the lender takes into account the expected growth in your income during the loan period while giving you this repayment option. A prominent bank offers Step Up Home Loan for amount up to Rs. 3 crore and for a tenure of 20 years while charging interest rates same as standard home loans. You can avail this loan even if your income is Rs. 20,000 per month. You can also choose to prepay in this loan option whenever you have surplus funds.

Home Loan For Pensioners

Catering to pensioners, this comes handy for retirees, who do not have co-borrowers to rely on. The loan is offered for a fixed tenure decided by lenders with the final repayment age up to 76 years. The EMI is directly debited from the pension account of the pensioner.  However, the loan amount offered is low, but it can be clubbed with the surplus money you have to help you achieve your goal of buying a home. Do assess your repayment capacity or EMI affordability before opting for this loan.

Before availing a loan, it would be wise to understand the options available and take help of an expert to understand the option that works for you.

The writer is CEO,