About DHFL Home Loan and its current interest rates

Dewan Housing Finance Corporation Ltd(DHFL), established by Rajesh Kumar Wadhawan in 1984, is known for making available affordable housing finance to the lower and middle income groups in semi-urban and rural parts of India. It is one of India’s largest housing finance companies (and the second largest in the private sector).

The company provides home loan products tailor made to suit the needs of customers. It has tie-ups with leading public and private sector banks namely Punjab & Sind Bank, United Bank of India, Central Bank of India and YES bank to provide home loans to customers through a home loan syndication agreement. It has set up representative offices in London and Dubai to serve the ever increasing NRI population in these regions, and tied up with UAE Exchange to offer its home loan products through the various UAE Exchange centres in the GEC countries.

DHFL believes in reaching out to a vast majority of the low and middle income group customers. As a value-added product option to housing finance, it provides double protection to insure the life and property of customers, subject to terms and conditions. In association with leading financial Insurers in India, the company offers unique home loan linked insurance plans which could be customised to suit customer requirements. The basic intent is provide security to the family in the unfortunate event of the death of home loan borrower.

If you vail loan from DHFL, you can be assured of fair terms, total transparency and flexibility.  You can avail DHFL home loan for ready built-up or under construction house/flat purchase. The loan does not exceed 85 per cent of the cost of property (including stamp duty and registration fees) or 80 of the market value, whichever is lower. If you want further enhance the loan amount, you should have a co-applicant, whose income can be clubbed together with yours to enhance your home loan eligibility.

Your home loan amount will be determined taking into various account factors such as your repayment capacity, age, educational qualifications, stability and continuity of income, number of dependents, co-applicant’s income, assets, liabilities and your saving habits.

The tenure of your DHFL home loan ranges from 1 to 30 years. The term, however, won’t go beyond the retirement age or 60 years whichever is earlier (65 years for self-employed individuals). If you opt for loan period of 30 years, you can reduce the EMI amount on your home loan, enabling you to spend more money on your lifestyle and other needs.

DHFL offers one of the most competitive rates in the market (see the table below). The Interest rate applicable is based on the DHFL’s Retail Prime Lending Rate (RPLR) which fluctuates from time to time based on the money market conditions.

Bank Name	Up to 30 Lacs	From 31 Lacs to 75 Lacs	Above 75 Lacs	Processing Fee	Prepayment charges
DHFL	10.50% (for salaried), 10.75% (For SEMP)	11% (for salaried), 11.50% (For SEMP)	11.50% (for salaried), 12% (For SEMP)	1% for Salaried & 1.5% for SENP	NIL

In case of salaried individuals (SAL), home loan processing fee is 1 per cent of the loan amount, whereas for self – employed professionals / non-professionals, it is charged at 1.5 per cent of the loan amount, plus service tax and cess as applicable.

Home Loan Delay Bugs Customers

Home loans can easily be termed as the best financial schemes that allow borrowers to build their own dream house. In India, all the major banking institutions are known to offer high quality home loan schemes to customers who are willing to buy a new home. Even though the process of applying for a home loan is simple and straightforward, you might face certain delays due to various reasons. If you feel that home loan bugs customers, then you’d be wrong as by avoiding certain mistakes, you could easily make the process run smoother.

Home loan delay bugs customers who are in search of a quick loan advance; and the best thing that you could do as a borrower is to go through the reasons why you might have to face a delay. This will surely help you in improving your situation and putting the best foot forward.

Applicant’s income

The borrower must have a certain amount of monthly or annual income for being able to apply for a home loan. So, if you don’t submit the right salary slips that show your monthly income, then you might have to face a lot of delay because the bank is going to delve further into the matter before granting you a loan.

Opening cash reserves

Even if you meet all the eligibility requirements, the bank might ask you to open a cash reserve in which you’ll be asked to maintain a certain amount of balance in one of the bank accounts. This amount is kept aside as a security for the bank in case you fail to make further payments.

Credit history

Most of the banking institutions spend a lot of time in conducting a background check. They carefully go through your credit history to determine the fact that you’re a capable borrower who can easily repay the loan. So, it’s advised that you keep your credit history and report clean prior to applying for the loan.

Employment details

It is best to put forward your employment details in front of the bank as and when you submit the application form. If you fail to submit your documents, the bank might spend a lot of time doing a comprehensive check on your employment history which in turn would delay the whole procedure.

Incomplete or missing documents

If you fail to produce any kind of documents or even your photographs on time, then you might face an unwanted delay during the application procedure. A home loan cannot be granted to a borrower unless he has submitted all the documents in the head branch.

Applying on the Closing Day

You could even face some delays if you’re visiting the bank on the closing day. Banks usually don’t deal in any kind of customer services on this day and so you might have to delay the procedure by a day or two. So, you got to plan out your visit beforehand so that you can secure the loan easily.

These are some of the reasons why a home loan delay could bug the customer. Try to create proper strategies for making the home loan acquisition process a smooth and simple one! 

How Profitable is it to Invest in Real Estate?

Since the beginning of time, real estate has been a high paid investment. Not only does it double the value of money, but also keeps it secure. The trend in India for different real estate investments have been on the rise, owing to its immense potential.

How is home loan connected to real estate?

When it comes to real estate, thae first thing that comes into our mind is the amount of money required. With the growing inflation rate, it is not possible for everybody to arrange and accumulate huge sums in a short time. The common man is bounded by different money constraints, which propel him not to think about real estate investment. This is where the concept of home loan comes into the picture.

A home loan gives you the facility of investing in property that will reap benefits in the future. There are many banks, which have initiated different home loan schemes for the common man. Some of them are:

• ICICI: Being one of the pioneers in the banking sector, ICICI bank helps you build your home or invest in a feasible real estate option. With longer tenures, lower EMIs and low home loan interest rates, this bank has been able to fulfill the investment needs of many customers. The simplified documentation and flexible repayment procedure has captured the attention of many people.

• SBI: State Bank of India has been voted “The most preferred home loan provider” in AWAAZ Consumer Awards along with “Most preferred bank award” in a survey conducted by TV 18 in 21 cities across India. With its low home loan interest rates that are calculated on a daily reducing balance, the bank is able to save a lot for the customer. Also, its huge network of branches in the country has enabled many people to opt for home loans from SBI.

Benefits of real estate investments

There are many benefits of investing in real estate. Some of them are:

Ø  Ability to enhance value: When it comes to real estate, an investor can build or rebuild his or her asset in order to raise its value in the market. Being a tangible asset, property investment gives you more control over your investment compared to other forms.

Ø  Yield: The main reason why you should invest in real estate is the high yield value. Your investment portfolio would have some investments, which do not have regular or healthy returns. Invest in property compensates for losses incurred in stocks or bonds.

Ø  Effect of inflation: The real estate business does not get influenced by the inflationary conditions in the economy. You will find many rent leases that get renewed with new rent rates. Being directly linked to the rents paid by the tenants, the returns keep on increasing during inflation.

Ø  Diversification: When making your investment portfolio, always look into diversification in order to ensure better asset allocation. Real estate returns are not at all co-related to any other investment in your portfolio. This not only diversifies your investments, but also take care of the risk involves in it.

You should have investments that will reap benefits and monetary gains in the future. To ensure the proper circulation of the hard earned money, real estate is the safest option for any investor.

SBI Home Loan New Scheme 2014

State Bank of India is one of the most trusted banks in India. Owing to its nationalized status, it has a loyal customer base. Along with this, it has been voted in AWAAZ Consumer Awards as “The most preferred home loan provider” and “Most preferred bank award” in a survey conducted by TV 18.

SBI home loans are considered a solid foundation of transparency and trust, which are some of the main aims of this bank.

Advantages of SBI home loan

Customers always prefer SBI compared to other banks for home loans, owing to its advantages. Some of them are:

• There are many benefits for a customer as SBI home loans are a package of different facilities.
• SBI home loan interest rates are very low, which initiates savings at the borrower’s end.
• The interest rate for SBI home loans is charged on daily reducing balance.
• There are no hidden costs or administrative charges for any SBI home loan.
• In case the customer wants to prepay the home loan before term expiry, there is no prepayment penalty charged.
• The customer can avail the loan from any of the 15,350 branches of SBI across India.

Different SBI schemes for home loan

In order to fulfill the diverse needs of a customer, many SBI schemes have been formulated for home loans. Some of the main SBI home loans available are:

SBI Yuva Home Loan

This home loan is tailor made especially for youths.

Eligibility	Repayment	Interest rate
Age: 21 years to 45 years Income: Minimum net income should be Rs. 30,000	The interest applied on the SBI home loan is payable during the first 36 months. The actual monthly EMI starts after 36 months.	Upto Rs. 75 Lakhs - 15 bps above the Base Rate (Spread over the Base Rate that is 10%) and 10.15 % p.a (Effective rate) Above Rs. 75 Lakhs - 30 bps above the Base Rate (Spread over the Base Rate that is 10%) and  10.30% p.a (Effective rate)

Her Ghar

This SBI home loan is especially meant for the women.

Eligibility	Loan amount	Interest rate
The woman should be the sole applicant or first co-applicant of Home Loan. The property proposed to be financed should be either in the sole name of the woman borrower or she should be the first owner in case of joint ownership.	Maximum 30 years or to the age of 70, whichever is early.	Upto Rs. 75 Lakhs - 10 bps above the Base Rate (Spread over the Base Rate that is 10%) and 10.10 % p.a. (Effective rate) Above Rs. 75 Lakhs - 25 bps above the Base Rate (Spread over the Base Rate that is 10%) and  10.25% p.a. (Effective rate)

SBI Realty

This SBI home loan is meant for the construction of a house or purchase of a plot.

Loan amount	Repayment	Interest rate
Rs. 10 Crores	Up to 15 years	Upto Rs. 75 Lakhs - 15 bps above the Base Rate (Spread over the Base Rate that is 10%) and 10.15% p.a (Effective rate) Above Rs. 75 Lakhs - 30 bps above the Base Rate (Spread over the Base Rate that is 10%) and  10.30% p.a (Effective rate)

The above mentioned SBI home loans are the primary ones; however, apart from these, you will also find SBI home loans for NRIs, tribal areas and many others. 

Why you must thank RBI for ending penalties on pre-paying home loans

The Reserve Bank of India has given millions of loan borrowers respite from pre-payment penalties.It had done away with pre-payment penalty on home loans long ago. This time, the apex bank has instructed all banks to abolishpre-payment penalty on all floating interest loans. The ruling applies to home loans, corporate, vehicle and personal loans, auto loans, personal and education loans that are repaid with a floating rate of interest.

RBI’s new regulations, especially on prepayment penalties, have brought a lot of cheer for the common man.In its first bi-monthly monetary policy statement for 2014-15, the RBI has directed banks to consider allowing their borrowers the facility of prepaying floating rate term loans without any penalty."...it is advised that banks will not be permitted to charge foreclosure charges or pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect," RBI said in its notification.

Prepayment penalty has been a demotivating factor to all loan customers, whenever they are in a position to pre-pay their loans. Especially, home loans are usually in lakhs and even a pre-payment penalty of 2 per cent of the total loan amount causes a big dent on your pockets – on a 20 lakh loan, it would comet Rs 40,000. Thanks to the RBI, you don't have to pay such huge sums of money to repay your loan. 

Many of you tend to go for pre-payment of loans when you find that interest rates show a continuous upward movement. Some of the customers opt for switch-over of their loans with existing banks to the lenders offering lower interest rates on loans.

Banks and other lending institutions have been very reluctant to part with the extra interest charge on the pre-payment charges on loans as it is their main source of income. The expansion plans of these institutions usually hinge upon their income on loan repayments. So, if you pre-repay your loan, in part or in totality, they lose a lot of their future income. So, customers are discouraged by banks to close off loans by way of levying-these penalties with considerable monetary implications.

As the prepayment penalties now-stand annulled, lending institutions would have to explore channels of raising their funds from alternative resources. But it is not that much of your concern as borrower.

As mentioned earlier, the RBI had forbidden foreclosure charges or pre-payment penalties on home loans on floating interest rate basis. The move aimed at ending the discrimination between existing and new borrowers and bringing uniformity across the banking system in the home loan segment, which was a logical course. Now the benefit same has been extended to floating rate term loans, which will help small and medium enterprises as well. Banks will no more be allowed to deny the benefit of lower loan liability to all their customers.

So, you have every reason to profusely thank the RBI for ending penalties on pre-paying all debts taken on floating interest rates, including home loans.

Financial institutions offering special home loan rates for women

As women are getting economically independent, they are increasing participation in financial decisions and planning, whether it concerns themselves or their family. Financial awareness is no longer a male bastion. Not surprisingly, home financiers have come up with special schemes for woman borrowers of home loan products. Prominent among them are State Bank of India (SBI), LIC Home Finance, Tata Capital Housing Finance (TCHF) and Dewan Housing finance Corporation Ltd (DHFL).  

The country's largest bank, SBI has launched a special home loan scheme offering concessional rate to women borrowers. Under this scheme, it offers women borrowers loan at 10.10 per cent for loan up to Rs 75 lakh and 10.25 per cent for loan above Rs 25 lakh. These rates are 5 basis points lower than other customers. In simple terms, if loans up to Rs 75 lakh are offered to new borrowers at 10.15 per cent, for women borrowers, the concessional rate would be 10.10 per cent. This scheme is valid for women borrowers in a number of ways: as sole applicants; the first of the co-applicants; the sole or the first of the co-owners of the property.

The TCHF has a discount scheme, under which it offers women home loans of up to Rs 40 lakh at a discounted rate of 10.15 per cent vis-a-vis its present rate of 10.50 per cent for other borrowers. Thus, women borrowers can save as much as Rs 864 a month on a 15-year loan and Rs 935 a month on a 20-year loan. To avail this facility, the property must be in the single/joint name of the borrower and the borrower must have sufficient income to service the EMIs.

As woman borrower, your choice should not be limited to a few housing finance institutions. Home loan is a very competitive market these days, so enquire about home loan interest rates of all financial institutions for women, and you may end up getting the lowest rate.

Similarly, LIC Housing Finance has a special scheme ‘Bhagya Lakshmi’ forwomen borrowers where it offers them a fixed rate of 10.10 per cent for loan up to Rs 75 lakh.

Dewan Housing finance Corporation Ltd (DHFL) also offers a home loan product exclusively for women customers, the ‘DHFL Home Loan for Women’. Under the scheme, all single/first woman applicants who are also the sole/co-owners in the property are eligible for a 25 bps (0.25 per cent) waiver on the rate of interest. As Rakesh Makkar, president, DHFL, puts it, the special loan for women is a part of the company’s endeavour to empower women by encouraging them to invest/buy a home.                                                                                           

Going by the above trends, it is clear that it helps to be a woman. Already, in several states, the stamp duty for registration of property is lower for women. For a male property-buyer too, it makes sense to register the property in his wife’s name as well as make her first co-applicant in the home loan.

What are the eligibility conditions for a home loan?

Home Loans are generally given to three categories of individuals by banks - salaried individuals, self employed professionals and self employed non professionals. The eligibility conditions vary for these three categories in most banks. The repayment capacity and eligibility of the borrower is determined based on several factors like age, tenure of loan, income, employment type and status, spouse's income, stability and continuity of occupation etc.

Let’s look at the main eligibility conditions:

Age of Borrower: Banks prescribe a minimum and maximum age of the borrower. The minimum age is usually 21 years of age. The age of the co-applicant is also specified by banks. The maximum age is given in terms of the age of the borrower at the time the loan ends. So while ICICI specifies this to be 65 years of age or retirement age, Axis Bank is more stringent for salaried borrowers at 60 years on loan maturity. Self employed individuals and professionals in Axis Bank have the maximum age at loan expiry criteria to be 65 years. Some banks like HSBC give different age limits for salaried individuals in private companies, government companies and self employed individuals.

Employment: Generally, all borrowers are expected to be either salaried with private or government companies, self employed professionals or self employed non professionals. As a home loan is a large liability, banks would want to make sure of the stability and continuity of employment while granting the loan. It is for this reason that in some cases, the eligible loan amount is lower, as the job may be viewed to be more risky compared to others.

Income criteria: Banks determine eligibility criteria based on the income of the individual. Although many public sector and private sector banks do not specify this amount in black and white, some banks like HSBC do so. For example, HSBC has minimum net income criteria of Rs. 5 lakhs per annum for salaried borrowers and Rs. 7.5 lakhs per annum for self employed borrowers. Some banks look at income on gross basis, while others consider the net take home salary for determining eligibility.

Spouse’s income: Most often, borrowers take a joint home loan along with the spouse to enhance loan eligibility. Banks also suggest this option. In this case, both the applicants’ incomes are considered. As the income base is increased, the repayment capacity is higher and therefore the amount of loan you are eligible to borrow increases.

Other loan commitments: When you borrow a home loan, the repayment capacity is of paramount concern for the bank. Therefore, the loan eligibility is worked out by calculating backwards on the Equated Monthly Installment (EMI) amount. This is compared with your monthly outflows, most important of which are payment of other loan commitments like car loan, education loan, etc. and the ability to pay is determined. This is a major determinant of the loan eligibility.

Other factors: Banks have internal stipulations on minimum and maximum loan amount, maximum tenure etc. Although these do not determine your eligibility directly, they have an indirect effect. For instance, the tenure you choose will determine your EMI, which in turn will be checked to determine the repayment capacity and hence the eligible loan amount.

BankBazaar.com online eligibility calculator can be used to check the eligibility for a home loan. This calculator would ask for details such as the monthly income, current loan obligations, loan tenure, interest rate, age of borrower and employment type, based on which the borrower’s loan eligibility is calculated and given instantly.