Home loan top up is cheaper than personal Loan

These days if you have Home Loan on your house you can get top up on that loan for your personal use. The top up Loan on your home Loan is much cheaper as compared to the Personal loan. It’s come with a interest rate of 13-14% p.a. as compared to the Personal loan whose Rate of Interest is ranging from 15-20% as well as higher Processing Fees.

So if you need personal loan for your personal use like sisters or daughters marriages etc. you can go for home Loan Top up on the existing Loan or loan against property as the same is much cheaper than the personal loan & very easy to process.

If you already have home loan you just need to approach your existing financer for top up on the same. The financer will provide you the loan faster as the property is already mortgaged to them if the financier have margin for the same. Since the end use of the loan is different & not for home purchase or construction, obviously the rate of interest for the top up loan will be higher. However the interest rate on your home loan portion will be same as of earlier & will not be effected by your top up loan interest rate. Financer will just treat those as two separate loan account though the property is same.

Same way if a person does not have any loan on his home can approach financers for his/her business loan/ personal loan needs by offering house as mortgage for cheaper rate of interest.

[For any query on the said matter write your query to Housingfinance.advisor@gmail.com]

Home Loan Calculator

Home Loan Calculator

Prepayment charge on Home Loan

Prepayment Charge

RBI as well as NHB (National Housing Bank) has abolished prepayment charge/penalty on prepayment of home loan from this April 2012 onwards. Some Banks were charging 1-2% penalty on prepayment of their home loans.

Now from April 2012 onwards Bankers are bound to waive the prepayment penalty on pre payment of Home Loans. The borrowers on floating rate of interest will need not to pay prepayment charge whether its paid from own source or it’s a takeover by any other banks. However borrowers on fixed rate of interest would get this benefit only on payment from its own sources.

The borrowers on fix-o-floaty scheme (where interest rate is fixed for certain period & floating thereafter) will be considered as fixed interest rate borrower without considering the fact that whether the borrower is at the time of prepayment is under fixed or floating rate of interest. Therefore they will get the benefit of prepayment charge abolishment only if they pay the amount from their own sources.

The borrowers with good track record & paying a high floating rate of interest, mainly the borrowers who borrowed long time back, can consider for takeover of their loan from any other bank to minimize the interest burden. By the same time borrowers with idle money in hand can consider for prepayment to utilize the idle money by saving interest on their home loan.

For any query on the above article mail us at housingfinance.advisor@gmail.com

Average Property Price in Mumbai

Average Property Price in Mumbai

Average Residential Apartments Price in Delhi NCR

Average Residential Apartments Price in Delhi NCR

Special Rate of Interest from LICHFL for LIC Policy Holders

Special Rate of Interest from LICHFL for LIC Policy Holders

LICHFL is offering 25 basis point off on their Floating Interest Rate for the customer having LIC policy of Rs.15 Lakh or more. Therefore LICHFL will charge 0.25% less Interest rate from the customer who is having a policy from LIC of Rs.25 Lakh or more.

Average Property Rates in Delhi NCR

Source: Times of India, 30th June, 2012