Canara Bank Home Loans Review

Company Profile

Canara Bank was founded in July 1906 at Mangalore. The Bank has gone through the various phases of its growth trajectory over hundred years of its existence. Growth of Canara Bank was phenomenal, especially after nationalization in the year 1969, attaining the status of a national level player in terms of geographical reach and clientele segments.

Over the years, the Bank has been scaling up its market position to emerge as a major 'Financial Conglomerate' with as many as nine subsidiaries/sponsored institutions/joint ventures in India and abroad.

As of March 2010, Canara Bank has extended its services to 3043 branches spread across all geographical segments. Keeping customer convenience at the forefront, the Bank provides a wide array of alternative delivery channels that include over 2000 ATMs- one of the highest among nationalized banks- covering 728 centers, 1959 branches providing Internet and Mobile Banking (IMB) services and 2091 branches offering 'Anywhere Banking' services.

Canara Bank offers Personal, Corporate, NRI, Priority and SME Credit Banking. It has truly emerged as a "Global Bank with Best Practices".

Analysis

Loan To Value Ratio – Canara Bank Home Loan can be applied for a maximum of 80% of the property value subject to credit discretion and are accompanied by a specially-designed insurance cover. This feature is very much comparable to other products in the market; other banks like Bank of India, Standard Chartered, PNB and HSBC offer loans up to 80% of the property value. Few banks are more lenient when it comes to loan to value ratio.

Tenure – Canara Bank home loans are available for a maximum tenure of up to 25 years.

Interest Rate – Base rate of Canara Bank is fixed at 8% w.e.f. 01.07.2010.

Prepayment Charges – Canara Bank does not levy any prepayment penalties except in case of takeover of the loan by other bank/Financial Institution where 2% is charged on the outstanding liability. This feature is very much comparable to IDBI, PNB, BHW Birla and HDFC Bank’s offering.

Processing Fees – Canara Bank charges 0.50% of the loan amount or minimum of Rs. 500 and maximum of Rs. 1,000. There is no hidden costs/application fee. This is at par with UCO Bank’s offering.