Vijaya Bank is a leading player in the banking space of Southern Indian and it offers a wide range of products ranging from personal loans to gold loans and savings accounts. One of the most popular loans it offers to individuals across India is a home loan.
The Home Loan, also called Housing Loan, offered by Vijaya Bank is a multi-purpose loan offered to individuals to meet their range of housing related needs. Let us discuss the complete set of features of the loan offered by Vijaya Bank in detail.
1. Housing Loan from Vijaya Bank
This loan has various attractive features the list of which includes:
- The loan is given to individuals so that they can utilize it for various housing related purposes which may be :
- To purchase a house or a flat
- To finance the construction of a house or a flat
- For renovating or improving the existing house or flat
- For taking over the balance of a home loan already availed from another bank or any other financial institution
- To purchase a site or a plot and then construct a residential property thereon.
- This is a unique loan which has no maximum limit on the quantum of loan which is granted. The applicant can apply for any amount of loan and it would be sanctioned provided the bank perceives that the creditworthiness and the repayment capacity of the borrower is favorable and the loan would be duly repaid.
- Though the quantum of loan granted, does not have a maximum limit, yet the bank assesses the loan to be granted based on multiple factors including credit score and the income of the borrower. The assessment is done taking into consideration up to 75 months’ average gross income of the borrower with respect to the take home income after the minimum margin requirement sought by the bank. If the borrower wishes to enhance his loan eligibility with respect to the quantum of loan granted, he can club the income of his spouse or children, the expected rent, depreciation and any other income from other sources to increase the gross take home income based on which the loan would be issued
- The loan would require a security which would be the house or flat purchased or constructed using the finance availed from the loan taken.
- The total finance required to purchase or construct a house or flat is not granted by the bank. There is a requirement of margin money in this loan scheme. For loans of the value up to Rs.75 lakhs, 20% of the project’s cost is kept as margin while for loans above Rs.75 lakhs, the margin requirement increases to 25% of the project cost. For evaluating the total cost of the project, stamp duty and any registration charges are excluded from the total cost
- The rate of interest charged on the housing loan scheme is the Base Rate on a floating rate which is currently 9.65%
- There is a concept of repayment holiday during which no repayment of the loan installment is required by the bank. For this scheme, there is a maximum repayment holiday of 18 months after which the equated monthly instalments would have to be paid to start the repayment of the loan.
- The maximum repayment tenure allowed to borrowers to repay the housing loan is 30 years. However, the age of the borrower also plays an important role. For borrowers above the age of 40 years, the repayment tenure would be a maximum of 30 years or the age at which they attain 75 years, whichever is earlier.
2. Vijaya Top-up Loan
The Vijaya Top-up Loan is a type of home loan which is issued to home loan borrowers of Vijaya bank for additional finance requirements. The loan can be put to any use as long as it is not speculative in nature.
- Eligibility requirements: For availing this loan, the following eligibility criteria are required to be met:
- The loan is available only for the bank’s existing home loan customers, i.e. borrowers who have availed a home loan from the bank
- The minimum amount of home loan that the borrower must have availed should not be lower than Rs.10 lakhs
- The home loan must also have a repayment track record of a minimum of one year where the EMIs have been paid regularly
- The amount of loan available is 75% of the amount which has been repaid in the home loan account. The minimum and the maximum absolute amounts are Rs.1 lakh and Rs.10 lakhs respectively. However, the bank would scrutinize the repayment capacity of the borrower before issuing the amount of loan.
- The loan is issued at a floating rate of interest. If the loan is availed as a secured loan, the rate of interest would be 1 year MCLR + 2.45% and if the loan is issued as an unsecured loan, the applicable rate of interest would be 1 year MCLR + 3.45% per annum
- A maximum allowable tenure granted for paying back the loan availed with the applicable interest accrued is 60 months or 5 years
3. Golden Jubilee Rural Housing Scheme
This is a rural housing loan scheme which is available for the rural population to meet their housing loan requirements. The aim of the scheme launched by the bank is to cater to the rural housing problems faced by rural population by providing an improved access to housing credit. This would enable an individual to successfully build up a modest new house for residential purposes or carry out any required renovation or extension to an old existing house for better living comfort. The loan is available only in rural areas. The definition of a rural area for the purpose of the loan scheme would be any area in a village or a town where the total population is not more than 50, 000 as per the census data of the year 1991.
If the loan is taken for buying or constructing a new dwelling unit, the maximum amount which would be available would be Rs.5 lakhs. However, if the purpose of the loan is to carry out repairs, renovations or extensions to an existing dwelling unit, the maximum available amount of loan would be Rs.50000.
Since the loan is granted to the rural population with modest means of sustenance, the repayment tenure which is allowed for the loan repayment purpose is stretched to 15 years within which the loan can be repaid in suitable affordable instalments. To ascertain the repayment capacity of this borrower of this home loan scheme, the ratio of loan repayment instalment and the income should not be more than 35%.
This means that 35% of the gross income of the applicant would be the allowable limit of loan subject to the minimum and the maximum limits. For security purposes, an equitable mortgage of the house property which is financed using the loan is required or any other appropriate security could also be pledged. The rate of interest on this loan scheme would be equivalent to the rate of interest charged on the normal housing loan scheme of the bank.
4. MSME Housing Loans
These loans are issued to individuals for up to Rs.28 lakhs if they reside in metropolitan units or Rs.20 lakhs for residences at other units. The loan is meant for the purchase or construction of dwelling unit per family. The cost of the unit should not exceed Rs.35 lakhs and Rs.25 lakhs in metropolitan and other areas respectively. Loans for repairing damaged units are also available to the tune of Rs.5 lakhs and Rs.2 lakhs depending on the location of the units. Loans to government agencies for the purpose of rehabilitation of slum dwellers are provided up to a maximum of Rs.10 lakhs. Loans to Housing Finance Corporations are also provided which can be used for refinance or for on-lending and the loans must be used for rehabilitation of slum dwellers and their uplifting.
Individuals aged 18 years and above and up to 65 years can avail of this scheme of housing loan. However, the maximum repayment age is 75 years. So, if the borrower is 65 years of age at the time of taking the loan, the loan should be repaid by the age of 75 years i.e. within 10 years.
After implementation of the MCLR regime, Vijaya Bank Housing Loan is being offered at a floating rate of 0.20% above 1 yr. MCLR i.e. 9.65%. The margin on housing loans from Vijaya Bank is 20% in case of loans of Rs. 75 lakhs or less, while margin is 25% on loans greater than Rs. 75 lakhs.
If the current floating rate of interest payable on the housing loan is provided, one can easily compute the relevant EMI (Equated Monthly Installment) payable by him if one seeks this loan. The option is available on the home page of the bank’s website and by clicking it would take the applicant to a new page. One would have to enter the amount of loan required, the rate of interest applicable, the repayment tenure chosen (in months) and hit ‘Compute’. The corresponding EMI would be displayed. For illustration, the following three instances of loan have been quoted:
- A loan of Rs.20 lakhs at a floating rate of interest of 9.65% payable in 15 years or 180 months would require an EMI of Rs.21, 066 payable every month for 180 months to repay the loan entirely
- Another loan of Rs.40 lakhs availed to be paid back within 20 years which is equivalent to 240 months would give an Equated Monthly Installment of Rs.37, 678 at the same rate of 9.65% floating.
- The third instance is a loan of Rs.75 lakhs taken for the maximum allowable period of 30 years. At the same applicable rate of interest of 9.65%, the EMI would come to Rs.63, 887 payable for 360 months.
After application of the loan, checking the status of application is also simple. This can be done online by visiting the bank’s website and choosing the ‘Online Retail Loans’ tab. Apart from the applying online option, there are two other options on this page. These options are for checking the loan application status whether applied online or through the branch. By entering the application number, one can track the loan status easily.
The bank offers online as well as offline mediums of loan application and the applicant can choose the medium best suited to him. For online application, the process is simple. The applicant would have to visit the Paisabazaar.com website and hit the ‘Home Loans’ tab and on the new webpage, the applicant can fill details to check if he or she meets the bank-prescribed eligibility criteria. If the applicant meets the eligibility requirements, the application formalities would be completed online on the website and the applicant can successfully apply for the loan and also avail the funds when the bank sanctions his application.