IDBI (Industrial Development Bank of India) Bank is one of the largest private commercial bank in India with its headquarters in Mumbai. Apart from banking and finance domain, it has huge presence in capital market, mutual funds and investment banking. As of March 2012, IDBI Bank had a strong presence in India with over 973 branches across the country.
IDBI Bank continues to grow in banking segment and one of its popular products has been IDBI Bank Home Loan. If you are looking to fulfill your long cherished dream of owning a house, IDBI Bank provides you with impressive solutions with an option to choose between fixed, floating and home loan interest saver.
IDBI Bank Home Loan is available for construction of residential property, purchase of new or resale residential property or plot of land and transfer of existing home loan from another lender.
Normally bank finances 80% of the agreement value of the property, however for property costing below Rs. 20 lacs, it finances 90% of the agreement value. Of course the maximum finance also depends on your annual income and your ability to service the loan.
To be eligible for IDBI Bank home loan, you should be either salaried, self-employed professional or businessman or an NRI and your loan repayment should terminate before 65 years of age. You can add earning spouse, children or parents as co-borrower to increase the eligibility of your home loan amount.
The maximum tenure for IDBI Bank home loan is 20 years for salaried individual and self-employed professionals and 15 years for self-employed businessmen and NRIs. IDBI bank charges a processing fee of 1% of loan amount and prepayment charges for only fixed rate home loans at 2% – 3% of outstanding balance amount.
Currently IDBI Bank offers home loan on floating, fixed and interest saver option. Let’s look in brief what it means to the borrower:-
Floating rate: Under floating rate whenever there are changes in the repo rates announced by RBI or any changes in base rate of the IDBI Bank, the interest rate on your home loan will have corresponding changes. Your interest rate can either increase or decrease with the changes in base rate.
Fixed Rate: IDBI Bank offers fixed rate of interest with a reset clause of 3-5 years, which means that every 3 or 5 years depending on the option you choose, the interest rate will be reset to then prevailing conditions.
Home loan Interest Saver: In this scheme, in addition to your home loan account, you also have a linked Current account with the IDBI Bank. You can then deposit or withdraw from this Current account just like any other current account. Every month when the loan installment is paid, interest at the applicable rate is calculated on the aggregate principal outstanding after taking into account the balance, if any, in the linked current account. Putting money in the linked account is as good as prepayment. Additionally it gives you the flexibility to take back the prepayment if you so desire.