Central Bank of India Home Loans Review

Corporate Profile

Under the Direct Housing Finance Scheme offered by the Central Bank of India, loans are extended for construction/acquiring of new or existing house/flat not older than 30 years; for extension in the existing house/flat and/or for repairs/renovation/alteration of existing house/flat.

Analysis

Loan to Value Ratio – The quantum of margin extended by Central Bank of India to borrowers is as follows:

• 75% of the cost of construction/purchase of new/existing flat/house or cost of extension of existing house/flat up to 10 years old.
• 75% of the cost of repairs/renovations/alterations of existing house/flat subject to a maximum of Rs. 10 Lakhs.
• 75% of the cost of purchase of plot subject to a maximum of Rs.25 Lakhs.

Central Bank of India may facilitate/support financing for the additional margin amount of 10%/15%, as Personal/Gold Loan depending upon sanctioned limit.

Banks like ING Vysya, BHW Birla, Kotak Mahindra, Axis, UCO, IDBI, HDFC and GE Money offer loans upto 85% of the property value subject to credit discretion. Few banks are more lenient when it comes to loan to value ratio.

Tenure – Central Bank of India home loans are available for a maximum tenure of 25 years or age of retirement or on borrower reaching the age of 70 years, whichever is earlier.

Interest Rates –

Interest rates applicable on repairs/renovations are repayable in 10 years and above i.e. maximum applicable rate of interest (presently 9.75% and 10.25%).

Prepayment Charges – Nil in case borrower repays entire loan amount out of his/her own sources. 1% of outstanding amount is charged if account is taken over by other Bank/FIs. As against this, banks like IDBI, PNB, SBI and UCO levy 2% as prepayment whereas; Axis Bank does not levy any charges for prepayment.

Processing Fees – Central Bank of India levies 0.50% of the loan amount subject to maximum Rs.20,000 as processing fee. As against this, IDBI Bank’s processing fee is one of the lowest in the market at 11,000/- or 0.5%, whichever is lower.