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Home Loan

The Oriental Bank of Commerce was founded by Rai Bahadur Lala Sohan Lal, at the city of Lahore in the year 1943. However, it later closed down its branches in what became Pakistan and had its registered office shifted to the city of Amritsar. It became a nationalized bank in 1980 and in 1997, it acquired the Bari Doab bank and the Punjab Cooperative Bank. In 2014, Oriental Bank of Commerce amalgamated the Global Trust Bank. 


The vision statement of Oriental Bank of Commerce is “To be a customer friendly premier bank committed to enhancing stakeholder value”. Its mission statement has three points, which are to provide quality, innovative services with state-of-the-art technology, to enhance professional skills and to create wealth for its customers and stakeholders.


To achieve their purpose, the bank has launched technology-based and customer-centric services such as mobile banking, phone banking, internet banking, etc. OBC has also launched projects at the grassroots level in order to help alleviate poverty. These projects are already in progress in the districts of Dehradun and Hanumangarh.


What is the Purpose of the Oriental Bank of Commerce Home Loan?


The Oriental Bank of Commerce’s Oriental Home Loan Scheme has two subcategories, which are the Housing Loan and the Home Furnishing Loan. As the names of the subcategories suggest, the two have different purposes.


The Housing Loan may be used for buying a land and to construct a house upon it thereafter. It may be used to finance the construction of a house upon a plot of land that was already owned by the loan applicant. With this loan, the loan applicant may purchase an already built up or semi-built up flat or house, which may be either completely new and never occupied or previously owned and occupied. Loan applicants may purchase a flat that is under construction or that is proposed to be constructed, with this loan. They may also use this loan to finance improvements or repairs of an existing flat or house.


Loan applicants who wish to furnish their homes with furniture and fixtures may use the Home Furnishing Loan under the Oriental Home Loan Scheme to finance their dreams and wishes.


The Oriental Bank of Commerce Home Loan Scheme may be available as a takeover of home loan accounts.

Oriental Bank of Commerce Housing Loan

  • The OBC Housing Loan may be availed by businesspersons or self-employed professionals who can show a minimum of three years in their field of business or activity. Applicants who are salaried employees should have a regular and permanent job with a reputed company for at least two to three years. Groups of individuals, including a Hindu Undivided Family may avail this loan. This loan is available to Non Resident Indians and to people such as farmers, etc.
  • The Oriental Bank of Commerce calculates the maximum possible amount that it may disburse as housing loan to the loan applicant, on the basis of the income earned by the loan applicant as an individual or the income earned by the loan applicants when applied for jointly with one or more people.
  • Special rates of interest are given to existing customers of Oriental Bank of Commerce so that they may prefer to avail a home loan from OBC, rather than go to another bank. Similarly, an applicant who is currently a home loan borrower or certain employees of OBC, receive concessions on the rates of interest when they apply for a new home loan from the Oriental Bank of Commerce.
  • Borrowers of the Oriental Bank of Commerce Housing Loan have maximum repayment tenure of 300 months or 25 years; this is inclusive of the holiday period or moratorium period during which the borrower does not have to pay any EMI. It is usually in the borrowers’ interest to opt for a longer repayment tenure as it will correspond with a lower EMI (Equated Monthly Installment). However, if the borrower has the financial stability and freedom to pay off his or her loan at a quicker pace with shorter repayment tenure, OBC will not dissuade the borrower from doing so. The shorter repayment tenure will correspond to a higher EMI, but if the borrower is comfortable with it, there is no problem.
  • The Oriental Bank of Commerce Housing Loan offers a holiday period or moratorium period of 18 months from the date of loan disbursal.
  • Loan applicants may mortgage the property that they are looking to buy or construct to provide a form of security for the Oriental Bank of Commerce. The plot of land should therefore, be in the applicants’ name or held jointly with the applicants’ spouse or parents. The loan applicant will need to have a clearly marketable title over the said property.

Oriental Bank of Commerce Home Furnishing Loan

  • This subcategory of the Oriental Bank of Commerce Home Loan Scheme is for those customers who want to renovate or repair their existing home. This includes adding fixtures and furnishings to the home, which may or may not necessarily be embedded to the structure of the house.
  • The OBC Home Furnishing Loan may be availed by businesspersons or self-employed professionals who can show a minimum of three years in their field of business or activity. Applicants who are salaried employees should have a regular and permanent job with a reputed company for at least two to three years. Groups of individuals, including a Hindu Undivided Family may avail this loan. This loan is available to Non Resident Indians and to people such as farmers, etc.
  • The Oriental Bank of Commerce calculates the maximum possible amount that it may disburse as housing loan to the loan applicant, on the basis of the income earned by the loan applicant as an individual or the income earned by the loan applicants when applied for jointly with one or more people.
  • Special rates of interest are given to existing customers of Oriental Bank of Commerce so that they may prefer to avail a home loan from OBC, rather than going to another bank. Similarly, an applicant who is currently a home loan borrower or certain employee of OBC, receive concessions on the rates of interest when they apply for a new home loan from the Oriental Bank of Commerce.
  • Borrowers of the Oriental Bank of Commerce Home Furnishing Loan have maximum repayment tenure of 10 years or 120 months; this is inclusive of the holiday period or moratorium period during which the borrower does not have to pay any EMI. It is usually in the borrowers’ interest to opt for a longer repayment tenure as it will correspond with a lower EMI (Equated Monthly Installment). However, if the borrower has the financial stability and freedom to pay off his or her loan at a quicker pace with shorter repayment tenure, OBC will not dissuade the borrower from doing so. The shorter repayment tenure will correspond to a higher EMI, but if the borrower is comfortable with it, there is no problem.

Agricultural Loans

The bank also offers agricultural loans for constructing or buying purposes. The two types of agricultural loans are described below:


Purchase of Land for Agricultural Purposes
 

This loan is given to farmers so that they can purchase a plot of land for carrying out agricultural related activities. The features of this loan scheme are highlighted in detail in the following points:
 

  • The loan is issued for the purpose of buying land for agricultural purposes.
  • Small and marginal farmers, share croppers and tenants who own 5 acres of non-irrigated land or alternatively 2.5 acres of irrigated land including the land under consideration for purchase are eligible for availing this loan
  • The maximum amount of loan issued under this category is limited to Rs.10 lakhs
  • For security, the land which is purchased using the funds from the loan would have to be mortgaged with the bank
  • The loan is to be repaid within a period which should range from minimum 7 years and 12 years maximum. The loan installments can be yearly or half-yearly depending on the choice of the borrower. There is also a moratorium period which is allowed when no installments are payable. The moratorium period could be for a maximum of 24 months and the loan repayment tenure mentioned earlier would be inclusive of the applicable moratorium period granted under the loan

Loans for agricultural buildings and agricultural business centers
 

These are also agricultural loans which are issued for construction or establishment purposes. The features of the loan are as follows:
 

  • The loan is issued to provide the required financing which might accrue in setting up of an agricultural building or an agricultural business center.
  • Individuals who are graduates in Agriculture or allied subjects are eligible to apply for this loan. If a group of individuals apply for the loan, the group should consist of a minimum of 5 members. In the group at least one member should be a management graduate or be experienced in management or human resource development.
  • The maximum amount of loan which is available under this scheme will be based on the actual cost of the project. Individuals applying for the loan can avail a maximum of Rs.20 lakhs in absolute terms. If a group of individuals, apply for the loan, the amount of loan which can be availed is increased to Rs.100 lakhs. (The minimum members in this case should be 5)
  • For security requirements, the amount of loan would be considered. For loans which are up to Rs.5 lakhs, hypothecation of such assets which are purchased using the loan funds would have to be provided. For loans above the value of Rs.5 lakhs, only hypothecation of the assets won’t be sufficient. Mortgage of the property which is constructed using the loan would also be required.
  • Loans up to Rs.5 lakhs require no margin while higher amounts of loans would have a margin of 15% to 25% of the project cost
  • The repayment tenure allowed is 10 years with a grace period of 2 years.

Who is Eligible for the Oriental Bank of Commerce Home Loan?

Indian residents and Non Resident Indians may avail this loan; groups of individuals may apply for this loan, including a Hindu Undivided Family.  The loan applicant has to be at least 18 years of age, with a maximum age of 70 years for the salaried individuals and 60 years for non-salaried applicants.. Loan applicants need to have a regular and assured source of income via business or salary that is more than the minimum income required.


Factors that Affect the Eligibility of a Person


There are certain factors that have an effect on the eligibility of a person, these are:
 

  • Income earned by the loan applicant
  • The age of the loan applicant
  • The loan applicant’s qualifications
  • The income of the spouse
  • The number of dependents that the loan applicant has
  • The stability and continuity of the loan applicants’ occupation
  • The loan applicants’ assets and liabilities

How does one Increase one’s Eligibility for the Oriental Bank of Commerce Home Loan?


In order to increase one’s eligibility for the Oriental Bank of Commerce Home Loan, the loan applicant may take the following steps: They may make his or her spouse as a co-applicant, thereby adding his or her income for the eligibility criteria. They may also choose to add his or her parents to increase income and eligibility. They may choose longer repayment tenure, as a longer tenure corresponds to lower EMIs, which would be more affordable for the borrower to repay.

Oriental Bank of Commerce Home Loan Interest Rates

The Oriental Home Loan Scheme has a floating interest rate of 9.55% to 10.20%. Its one year MCLR is 9.55%.


Oriental Bank of Commerce Home Loan Applicable Charges


The Oriental Bank of Commerce Home Loan has charges 0.50% of the loan amount as the processing charges, to a maximum of Rs. 20000. OBC does not charge anything for pre-payment, upfront fees or documentation fees.


Repayment Period of the Oriental Bank of Commerce Home Loan


Borrowers of the Oriental Bank of Commerce Housing Loan have to repay their loan within 300 months or 25 years, which is inclusive of 18 months that is considered as the moratorium period. The moratorium period is a period of time during which the borrower does not have to pay the loan. In this case, the moratorium period is of 18 months.


Borrowers of the Oriental Bank of Commerce Home Furnishing Loan have to repay their loan within 120 months, or 10 years.


Maximum Loan Amount Available under the Oriental Bank of Commerce Home Loan


The Oriental Bank of Commerce Housing Loan does not have a ceiling limit; however, it is subject to certain conditions. A businessperson may get a loan of a maximum of 40 times his or her Gross Monthly Income. A salaried employee will get this loan at a maximum of 60 times his or her Gross Monthly Income.


The Oriental Bank Home Furnishing Loan may be availed for a maximum amount of Rs. 10 lakhs. This amount is restricted to thirty percent the value of the existing house.


Margin on the Oriental Bank of Commerce Home Loan


For the Oriental Bank of Commerce Housing Loan:

For a loan amount up to Rs. 30 lakhs

Margin is 10%

For a loan amount between Rs.30 lakhs and Rs. 75 lakhs

Margin is 20%

For loan amount more than Rs 75 lakhs

Margin is 25%

 

For the Oriental Bank of Commerce Home Furnishing Loan:

For a loan amount up to Rs. 10 lakhs

Margin is 25% of the total furnishing or renovation costs

 

Interest Switch over Option


Oriental Bank of Commerce gives its customers/borrowers the freedom to switch over to a prevailing rate of interest if he or she is of the opinion that the prevailing or current interest rate is more favourable to them.


Security Accepted by Oriental Bank of Commerce for its Home Loan


Oriental Bank of Commerce accepts equitable/registered mortgage of the financed property or property that is to be furnished. Oriental Bank of Commerce does not ask for any collateral for its home loan.

Documentation

Loan applicants have to provide the following to apply for the Oriental Bank of Commerce Housing Loan:
 

  •  An application form-cum-process note
  • Proof of identity should be furnished in the form of a passport, or PAN Card or driving license or Voter’s ID Card
  • Salaried applicants have to provide their salary certificate as proof of income
  •  Businesspersons and self-employed professionals may provide their profit and loss statement, etc as proof of income
  •  Applicants have to show the agreement for the sale of flat/house that they wish to buy and proof of membership (for co-operative societies)
  •  Businesspersons and self –employed professionals should show proof of existence in the line of business or activity
  • Applicants have to provide their previous six months bank account statement
  • Applicants have to provide a Title Clearance report from a bank-approved advocate as well as a valuation report from a bank-approved engineer or architect
  • Two passport sized photographs of the loan applicant/s
  • If it is a case of a bank take-over, the applicant will have to provide a copy of the home loan account statement and a certificate from the lending institution mentioning the pre-closure amount
  • Except for the passport-sized photographs, the loan applicant will have to provide the above documents in original and in self-attested copies for the purpose of verification for the Oriental Bank of Commerce.

EMI Calculator

Given below are a few illustrations of EMIs that have been calculated using the EMI Calculator.
 

  • Vikram is a salaried professional working for the past five years with a reputed multinational company in the city of Bangalore. He has a bungalow in a posh district that he has inherited from his grandfather and now wishes to renovate and repair as it is very old and requires the same. To achieve this end, he requires a home loan of Rs. 10 lakhs. Vikram checks online for a home loan that is suitable for him and decides to take one from the Oriental Bank of Commerce. He applies for the same via the banks’ website and in time, after the bank completed the verification process, he receives the loan of Rs. 10 lakhs, for ten years, at a rate of 10.20% and an EMI of Rs. 13326 only.
  • Sandra is an entrepreneur living in the city of Mumbai. After having achieved considerable success in her line of business, she sets a new dream, of building a beautiful house in the suburbs of Mumbai. In order to finance this dream, she seeks a loan from the Oriental Bank of Commerce, as she has been a faithful customer of the bank for many years and is happy with the services rendered to her in the past. She applies for the loan and after the bank completes the necessary verification checks, she receives a loan of Rs. 90 lakhs for a period of 25 years, at a discounted rate of 9.70% and an EMI of Rs. 79888.
     

Applicant

Loan amount (Rs.)

Tenure

Interest Rate

EMI (Rs.)

Vikram

10 lakhs

10 years or 120 months

10.20%

13326

Jyotika

90 lakhs

25 years or 300 months

9.70%

79888


Why take a Home Loan from Oriental Bank of Commerce?


Oriental Bank of Commerce provides many services for their customer, among them, is the Oriental Home Loan Scheme. This scheme has two sub-categories: the Housing Loan the Home Furnishing Loan. Customers can enjoy an unlimited Housing Loan or a very generous loan of (a maximum of) Rs.  10 lakhs for furnishing their home. Additionally, Oriental Bank of Commerce provides special rates of interest on its home loan for existing and loyal customers of its banking services. Furthermore, those who already have a loan from the bank and certain groups of employees also enjoy special rates of interest on its home loan.


Keeping in mind the mission statement of Oriental Bank of Commerce and its vision, customers are left reassured that their wealth and satisfaction is the top-most priority for OBC. Oriental Bank of Commerce focuses on providing customer-centric quality services. The personnel at OBC are highly trained and professional; the bank keeps them up-to-date with the latest technologies and provides them with the training to be empathetic and customer oriented. Thus, customers of Oriental Bank of Commerce are in safe and capable hands when they take a home loan from OBC.