Loans Made Easy

The new government has brought in a lot of changes in the country’s financial structure, especially few changes that will affect the real estate market in a positive way. Due to the changes in the financial structure, there are many new flats in Chennai which are being promoted by well known builders and promoters.

Home loans have become very easy with the changes that have been made in the new financial budget. The ready-to-serve home loans on wheels have been recently flagged off in Chennai as an initiative to expand the bank’s support to housing sector. Banks have been offering loans to customers at their door steps for a long time but the sanction of a loan is a new development in this sector. Housing loans usually has a lot of procedures like verification of the buyer, value of the property, value of the security that is given by the buyer and inspection of the site etc. This is usually time consuming and people will have difficulty with the substantial ground work for availing a home loan. The new budget has provided for affordable housing and allowing banks to raise bonds for finding resources to finance such which has been a shot in the housing sector.

The RBI has issued few guidelines to the banks which are as follows:

• The Affordable-housing projects will not exceed Rs. 65 lakhs and a loan component of Rs. 50 lakhs in all the six metros in India and in other centres the ceiling will be Rs. 50 lakhs with Rs.40 lakhs loan amount.
• The applicant who is eligible for such a loan will be a family and can avail the loan for either construction or purchase of only one unit.
• The banks can raise funds for financing the projects by issuing g long-term bonds for a period not exceeding seven years. The funds so raised will be exempted from reserve requirements.
• Apart from these loans, an exclusive loan for Rs. 10 lakhs can be provided as priority sector lending to families with annual income of Rs. 1.20 lakh, irrespective of the location.
• Loans which are given for housing finance corporations with the approval of National Housing Bank to individual houses or slum clearance or slum dwellers is subject to a ceiling to Rs.10 lakh per borrower at an interest of 2 percent above the low lending rate.

All these guidelines have been given by RBI is to renew the interest in lending to the housing sector. This will surely encourage builders to develop many new flats in Chennai and other metros.