IDBI Bank Home Loans Review

Company Profile

Industrial Development Bank of India (IDBI) Limited is counted amongst the leading public sector banks of India, apart from claiming the distinction of being the 4th largest bank, in overall ratings. It is presently regarded as the tenth largest development bank in the world, mainly in terms of reach. This is because of its wide network of 509 branches, 900 ATMs and 319 centers. Apart from being involved in banking services, IDBI has set up institutions like The National Stock Exchange of India (NSE), The National Securities Depository Services Ltd. (NSDL) and the Stock Holding Corporation of India (SHCIL).

IDBI Bank offers Personal Banking, Corporate Banking, SME Finance and Agri-Business products. Under its personal banking, IDBI Bank offers hassle free and customer friendly home loans. Home Loan can be availed for constructing a house, purchase of a ready built house/flat or a flat in resale, the takeover of existing loans from approved banks / housing finance companies, the purchase of a plot of land, for renovation of the house and extension of the house.

Analysis

Loan To Value Ratio – IDBI Bank Home Loans can be applied for a maximum of 85% 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; banks like Axis and HDFC too offer loans up to 85% of the property value. Few banks are more lenient when it comes to loan to value ratio.

Tenure – The maximum possible tenure for a Resident Indian is 25 years if salaried and 15 years if self employed. While the same for an NRI is 15 years. But normally, they offer 20 years to the employed customers, and this is commonly being offered by other banks too in the market.

IDBI Bank offers to structure loan repayments to suit an individual customer’s convenience. For instance, the installments could be lower in the initial years and could gradually increase over a period or vice versa.

Interest Rate -

Prepayment Charges – In the event of a customer opting to pre-pay the home loan with IDBI Bank, a nominal fee of 2% is payable in case, it is transferred to another bank or housing finance company. However, no charges are applicable if a client prepays from own sources after 6 months of commencement of EMI. This feature can be compared to banks like SBI, PNB and Bank of Maharashtra.

Processing Fees – They charge a marginal processing fee but no admin charges. Their processing fee is one of the lowest in the market at 11,000/- or 0.5%, whichever is lower.