Check Aspire Home Finance Rate of Interest & Apply Online Now!

As the name suggests, Aspire Home Finance company gives you the opportunity to make your wish come true! As the famous saying says, ‘Home is where the heart is’, this housing finance company helps people get their dream home and their heart together. Having said that, this housing finance company also provides a specialized scheme for female borrowers wherein it give affordable home loan scheme. The name of this scheme is MALA – Mahila Awas Loan from Aspire. Isn’t it beautiful that a woman can get a home loan at an affordable price? It is indeed!

Aspire Home Finance Corporation Limited is a Motilal Oswal Group company which aims to provides one of the best home loan deals in the market. Here at Aspire, you get the loan for the ready/under construction, residential property/construction of a residential property of a residential property on own land. In addition to this, the refinance facility is also offered by AHFCL to the customers who have a running loan from another bank.

Have a look at the interest rates offered by Aspire Home Finance as per the different profession:

  • Salaried- 12.00% to 15.00% p.a.
  • Self Employed- 12.50% to 15.00% p.a.
  • Self Employed/Non Professional- 12.50% to 15.00% p.a.

After going through all these attractive benefits, don’t you want to apply for a home loan online at AHFCL? Well, to apply for home loan, a person must meet the eligibility criterion set by AHFCL. So, have a look at the eligibility criteria below:

Eligibility Criteria-

Aspire Home Finance gives home loans to the below-listed applicants only:

  • Salaried, self-employed and non-professional.
  • The minimum loan amount is ₹2 Lakhs and the maximum loan amount is ₹25 lakhs
  • The minimum tenure for a home loan is 5 years; maximum tenure is 25 years only for Salaried Customers and 20 years for self-employed customers.
  • Loan tenure should not extend the age of retirement or on reaching sixty years of age in case of Salaried and Seventy in case of self-employed customers

Now, other than the eligibility criteria, the list of documents required to get a home loan are as follows:

  1. Application form duly signed by the applicant along with the photograph
  2. ID proof & Resident Proof
  3. Processing fee cheque
  4. Last 6 months bank statement
  5. Documentation for salaried applicants:
  • Last 3-months salary slips
  • Form 16 along with recent salary certificate
  1. Documentation for self-employed applicants
  •      Last 2 years Income tax returns
  •      Last 2 years computation of income

After you have got everything ready, you would look for the application process, right? But, before applying, you should also check the monthly installments in advance so as to be prepared for the smoother repayment.

Home Loan EMI Calculator-

Just like any other loan calculator, a home loan calculator or a home loan EMI calculator is the tool that is used to calculate the monthly EMI, the total interest outgo, and the total amount (interest+principal) for your chosen loan amount. This calculator takes into account the loan amount, interest rate and the tenure for your loan. For example, if you have taken the home loan of ₹25 lakhs for 25 years at the annual rate of interest of 12%, the details of your payment are as follows:

  • EMI- ₹2,22,122
  • Total Interest Outgo-₹1,65,464
  • Total Amount (Interest+Principal)- ₹26,65,464

You must be thinking why is it important to know the above details before getting the loan? Well, you must know that there are many benefits of a loan calculator and some of them are as follows:

 

Benefits of using Home Loan Calculator or Housing Loan Calculator-

Accurate results– One of the main advantages of using an EMI calculator is that it gives you accurate results, unlike manual calculation where the possibility to make mistakes is more.   

Time-Saving– Since everyone is getting busier each day, a tool like this makes it convenient for people to save time.

Flexible Adjustable-You will be surprised to know that you are free to use the calculator n number of times.

Easy Comparisons– With the help of the calculator, you can compare all the home loan offers available in the market and then choose the best one for yourself.

More than EMI– The calculator gives the information more than the monthly installments like the total interest outgo and the total amount (principal+interest).

Suits your Budget– When you check the installments in advance, you can see if you will be able to manage that particular amount without affecting your other financial liabilities.

Accounted Processing Fee– The interest rate offered by the banks do not count processing fees, a loan calculator would let you know the payment excluding the other charges. However, there are some calculators that would count the processing fees also.   
Thus, with all the above information in hand, your home loan journey will definitely be smoother.

 

 

Article Source: http://wishfin.weebly.com/blog/check-aspire-home-finance-rate-of-interest-apply-online-now

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Fill Bandhan Bank Loan Application Form & Get Quick Funds

Times do not remain same forever. How much we earn and save, at times it falls short to meet some of the requirements. And in those times, we need an institution that can lend help. Though there are multiple banking and financial institution but it becomes difficult to select the one. The one that can provide you right remedy and guidance. Therefore, it is necessary to know the lender first.

Bandhan Bank is the private sector bank that was inaugurated on 24 August 2015. The head office of the bank is located in Kolkata. Initially, the bank opened 501 branches, 50 ATMs and 2,022 door step service centres. In the short span of 2 years, the bank has extended its touch points to 3,383. It delivers a wide range of banking products to cater the variant needs of the people. It has developed a pack of customized loan products from which the customer can select the one that best suits his/her requirement. It has kept the process simple and steady to provide the aid timely. So, all that you need to do is fill the Bandhan Bank loan application form and get funds to reach your financial objectives.

How to Apply for Loan Products-

To apply for the loan, submit the Bandhan Bank loan application form with required documents at the nearest branch and after complying all terms and conditions loan will be disbursed.

Different Loan Products Offered by the Bank-

The details of various loan products offered by the bank are mentioned below:

Home Loan: The bank provides home loan for the longest tenure of 15 years to the eligible candidates at the interest rate of 12% p.a. The eligibility criteria for a home loan is:

Eligibility:

  • The home loan facility can be availed by the salaried/ self-employed professionals/ self-employed non-professionals.
  • Minimum age of the applicant should be 23 years.
  • Maximum age at the time of loan maturity should be 65 years.  

Documents Required for Home Loan:

  • Identity Proof- PAN Card/Passport/Voter ID/ Driving License/Aadhaar Card
  • Address Proof- Utility Bill/Passport/Aadhaar Card/Voter ID
  • Income Proof- Latest Salary Slips & Form 16 for Salaried
  • Profit & Loss A/C Statement & Audited Balance Sheet for the Last 3 Years
  • Bank Account Statement for the Last 6 Months
  • Track record of existing loans, if any
  • Property details

Two Wheeler Loan: Bandhan Bank lends funds to potential two-wheeler buyers to buy the desired motorbike or scooty. It lends ₹ 10,000-1,50,000 for the flexible period of 1 year to 3 years.

Eligibility Criteria:

  • The minimum age of the applicant at the time of application should be 23 years.
  • The maximum age at the time of maturity of loan should not be more than 65 years.

Documents Required:

  • Identity Proof- PAN Card/Passport/Voter ID/Driving License/Aadhaar Card
  • Address Proof- Utility Bill/Passport/Aadhaar Card/Voter ID
  • Income Proof- Latest Salary Slips & Form 16 for Salaried
  • Profit & Loss A/C Statement & Audited Balance Sheet for the Last 3 Years
  • Bank Account Statement for the Last 6 Months
  • Track record of existing loans, if any
  • Quotation or proforma invoice of vehicle to be purchased

Loan Against Property: The bank sanctions loan against property to finance the impending goals and responsibilities. The loan amount depends on the disposable income or surplus income of the candidate.

Eligibility Criteria:

  • The loan against property is available to Salaried / Self-employed Professionals / Self-employed Non-Professionals.
  • The minimum age of the borrower should be 23 years & above and maximum age at loan maturity to be 65 years or retirement age, whichever is earlier.

Documents Required:

  • Proof of ID: PAN Card/Passport/Voter ID/Driving License/Aadhaar Card
  • Address Proof- Utility Bill/Passport/Aadhaar Card/Voter ID
  • Age Proof
  • Income Documents
  • Statement of operative bank accounts for last 6 months
  • Repayment Track record of existing loans
  • Details of property proposed to be mortgaged

SME and Agri Loan:  To help small and medium scale enterprises and agricultural units expand their business, the bank provides multiple types of credit facilities and they are as follows:

  1. i) Agri loan – The loan amount disbursed under this loan depends on the type of agricultural land and activities. The repayment tenure too varies with the loan amount and type of agricultural activity. However, it ranges from one year to 5 years.

Documents Required:

  • Duly Filled loan application forms
  • KYC documents like ID Proofs and address proof
  • Financial statements from the last two years if available.
  • Details of Land, Equipment Etc.
  1. ii) SME Loan- The bank grants term loan and working capital loans to the trading, manufacturing and service providing units and help them scale up their operations.

Documents Required:

  • Duly filled Loan application form
  • Incorporation documents and Bank statements for the last 6 months.
  • KYC documents like ID Proof, address proof etc
  • Financial statements from the last two years.
  • Proof of address for office and factory

Want to Fulfill Your Needs? Avail Personal Loan Apply Option

There comes a time when you require some funds to meet your personal aspirations or the contingency needs. This is where your old friend personal loan can come to help you. Banks and non-banking finance companies (NBFCs) provide a personal loan for various purposes like the wedding, education, medical emergency, purchasing a durable or car, etc. So, no dream is bigger with a personal loan. Let’s get through the journey of a personal loan from its basic features to the lender offers.

Basic Features-

  • Personal loan amounts range from 50,000-20,00,000
  • Loan tenure equals to 5-6 years
  • Interest rate 11%-25% per annum
  • Both salaried and self-employed can apply for personal loan
  • Processing fee amounts to 1-3% of the loan amount
  • Prepayment charges calculated at upto 5% of the outstanding loan balance

personal loan apply

Top Banks Providing Personal Loan In India-

SBI Personal Loan-

  • State Bank of India (SBI), with more 14,000 branches across India, provides a personal loan at attractive interest rates of 11.90%-14.90% per annum.
  • The maximum loan amount offered by the bank equals to 24 times the net monthly income, subject to a limit of upto 15 lakh.
  • The amount of processing fee is calculated to be 1% of the loan amount plus service tax as applicable.
  • Borrowers can prepay the loan without having to pay any penalty on the same.

SBI Personal Loan Eligibility-

  • Both salaried and self-employed are eligible for a personal loan.
  • The minimum net monthly income (NMI) required is ₹ 7,500.
  • The ratio of EMI to NMI must not be over 50.

SBI Personal Loan Application-

You can apply for a personal loan by visiting the branches of SBI or the website. The latter option could well be the most convenient of the two. Being online allows you to get the receipt of the application form easily instead of asking for the same at the branches of the bank. You can easily fill the details online to submit your application to the bank, which would then process your case further. If all goes well, the bank would disburse the loan within 2 days to a week.  

HDFC Bank Personal Loan-

  • The personal loan from HDFC Bank is available to all the salaried professionals at an interest rate of 11%-20% p.a.
  • The loan amount offered by the bank ranges from ₹ 15 lakh-25 lakh.
  • You can avail a personal loan for a maximum period of 5 years.
  • Processing fee charged upto 2.50% of the loan amount subject to a maximum of ₹ 25,000.
  • Prepayment charges are calculated at 4% of the principal outstanding plus service tax as applicable.

HDFC Bank Personal Loan Eligibility-

  • Individuals with an age of 21 years at the time of application and a maximum of upto 60 at the maturity are eligible for a personal loan.
  • The total work experience should be a minimum of two years with a year of employment with the existing organization.
  • The minimum net monthly income should be ₹ 12,000-15,000.

HDFC Personal Loan Apply-

Want to apply for personal loan at HDFC Bank? Visit any of the bank branches. If visiting the branches is not what you like, there is an option of going online to apply for a personal loan. Within 2 days to a week’s time, you would get the disbursal if there is no discrepancy in the documentation.  

Axis Bank Personal Loan-

  • You can also apply at the third largest private sector bank i.e Axis Bank for your personal needs.
  • Axis Bank Personal Loan interest rates are in the range of 15.50%-24% per annum.
  • The maximum loan tenure for the same is 5 years
  • The processing fee is computed at 1.50%-2% of the loan amount along with applicable service tax.
  • No prepayment charges

Axis Bank Personal Loan Eligibility-

  • Both public and private sector employees are eligible for a personal loan at Axis Bank.
  • The minimum age which you can apply is 21 years and the maximum age permitted at the time of loan maturity is 60 years.
  • You should earn a minimum net monthly income of ₹ 15,000.

Axis Bank Personal Loan Apply Online-

Bring home the needed funds by applying for a personal loan at Axis Bank. You can either visit the branch or opt for the online option. The second option will add to your convenience as you can apply via your mobile or computer with the help of an Internet connection.

Calculator Personal Loan-

You can use the calculator to find out the loan servicing cost. The personal loan eligibility calculator will determine the amount of loan you are expected to receive based on your income and savings. The EMI calculator will show the amount of installment you need to be ready with to pay off the loan each month. The EMI constitutes a portion of both principal and interest amounts. The amortization calculator, on the other hand, gives a schedule of the interest and principal and interest repayment each year. It also shows the outstanding balance of the loan amount every year.

Now I guess, the path for a journey full of happiness is clear with the comprehensive know-how of a personal loan. Use this as a guide to steer yourself comfortably amid all the challenges that the life presents from time to time.

Axis Bank Home Loan Eligibility: Get All the Information About It

The home loan is the product given by the financial institution which helps the people to attain and realise the dream to own a house. A house is one such thing which is the basic requirements of every individual and after a point of time, they think to be an owner of their own home. Sometimes, the financial situation does not permit you to have a home for yourself. You can opt for the home loan in such situation and it will fulfill the financial requirements that you need. The amount you pay rent can be diverted to pay the monthly installment. There are many banks and NBFC that offer the home loan. The Axis bank home loan is one of the best among the banks. The Axis bank home loan eligibility is easy to attain and the bank needs minimal documentation.

The Axis bank being the third largest private sector bank in India has been providing the home loan with compatible rates. The application process is easy and transparent. You can avail the minimum amount of ₹ 3 lakh and the maximum amount depends on your combined income. The home loan is available to you in both the floating as well as fixed rate of interest. The bank does not charge the prepayment charges if you have availed the loan in the fixed rate of interest while for floating it charges only 2% on the outstanding amount. 

axis bank home loan eligibility

Also, the home loan has the maximum repayment period of 30 years. It allows you to take the big amount while you pay the small monthly installments. The home loan can be taken to purchase the house or land, construction of house, renovation or enlargement of the house. You can utilize the home loan for any of these purposes.

The eligibility criteria required by Axis Bank –

  • The applicant of the home loan should be a minimum age of 21 years at the time of filing the loan application and the maximum age of 60 years for the salaried individual while 65 years for self- employed at the time of loan maturity.
  • The applicant should be either salaried individual or self- employed.
  • The applicant should have the regular source of income.

Documents Required-

For salaried individual:

  • Proof of Identity: Passport/ Voter’s ID/ Driving license/ Pan card
  • Proof of Residence: Utility bill/ Passport/ Registered lease agreement with the Utility bill in the name of the landlord.
  • Proof of Income: Latest 3 months salary slip/ certificate for fixed income/ latest form 16
  • Bank statement: Last 6 months bank statement/ Passbook of the salary account.

For the self- employed:

  • Proof of Identity: Passport/ Voter’s ID/ Driving license/ Pan card
  • Proof of Residence: Utility bill/ Passport/ Registered lease agreement with the Utility bill in the name of the landlord.
  • Proof of Income: Last 2 years details for IT returns along with the computation of the income certified by CA.    
  • Bank statement: Last 6 months bank statement of operative accounts both personal and business.

The factors that affect the Axis bank eligibility:

Age– The age is one of the factors that determines the eligibility. The age of the applicant should be legal and valid. It is necessary to know if the person has attained the legal age to earn and be responsible for the financial matters or not.

Nature of profession- The applicant should be working and have the regular source of income. It is necessary as the home loan is the amount taken from the bank and you will have to return it. The regular income will come only if you are working. You might be a salaried individual, a professional, or self- employed with the stable job and regular income. It is the important factor to determine your eligibility.

Minimum income and expenses– The minimum income of the applicant should be enough to support the individual’s expenses and to pay off the EMIs. The amount that is remaining after the total expenses should be more than the EMIs.

Job stability-The work experience should be more than 2 years for the salaried individual and should have 3 years for the self- employed. The more you are stable with the job the chances of getting the home loans are more.

Credit history- One of the important factors is to have good credit score. The main aim of the credit score is to reflect your past credits and repayment history. Accordingly, the credit bureaus give you the scores. Thus higher the score chances to avail the loan become more.

Any other loan– Any other loans taken at the time can lessen your chance.

The Axis bank home loan eligibility is one of the factors that will determine whether your loan application will be accepted or not. Thus it is necessary to take all the factors into account before applying for the home loan. Once you are eligible then within 15 to 20 days after the approval of the application the funds will be disbursed. Axis bank gives you the opportunity to have your own home through its home loan.

Important Note in Credit Card Bill Payment

The credit cards are small rectangular cards that are made out of plastic. The credit card is one of the important inclusion that is important in the digitalised world. It is the card that is used to make payment anywhere and everywhere. You can purchase all the items which are sale in this world with the small card. It is a type of loan that you take from the credit card company for a brief period of time. You make the credit card bill payment to repay the company.

It is one of the important things that is necessary for you to remember. The bill contains all the details about the uses and payments made through it. The credit card is one of the powerful tools when it comes to the making payments. It is always handy when you are short of cash and during emergencies. The interest rate is high on the late bill payment while if you purchase the items through credit card and submit the bill on time then no charges are levied on it.

credit cards

So, if you are the responsible buyer then it is one of the best modes of payments. The credit cards can be used to make payments online as well as offline. To continue the benefits of the card and get the best out of it, making the bill payment is the necessary step.

What are included in the Bill?

You should have the knowledge about what is included in the bill of the credit card:

Credit card number : The number of your credit card that is engraved in your card.

Summary of the account : All the purchases made by the card, a summary of it is mentioned with the address of the store or place of purchase, and amount of purchase made.

Payment due: The amount of payment due for the month.

Minimum amount due: Minimum amount payable in order to avoid the blockage or discontinuation of service.

Available credit limit: The credit limit available to the card holder.

Applicable interest rate: The interest rate that will be applicable in the case of late payment or minimal amount due for payment.

Payment due date: The due date up to which you can pay the bill.

How to make bill payments?

The bill can be paid through both online as well as offline method. For the offline method, you can visit the branch of the credit card company and make the payment through cash or cheque.

For the online mode of payment, there are several options like through net banking, debit card, other portals, directly through the credit card portal, mobile applications etc. In the digitalised world there are many options available to us through which we can make the payments at any point in time and from everywhere. You can save your time and energy by paying the bill online. The time to reach the branch can be saved. Also, the money that is required to physically travel to the branch is saved. You can sit in the comfort of your home and make payment. Also, the mobiles have been such powerful tool that if you suddenly have to pay your bill you can do it practically anywhere and everywhere because of it.

ICICI bill payment of credit card-

Through net banking- you have to follow 4 simple steps:

  1. Select your bank.
  2. Provide the details of your credit card.
  3. Confirm payment amount and make payment.
  4. Receive online confirmation of the payment.

Through debit card- It also has 4 steps to complete the bill payment;

  1. Select your card type.
  2. Give all the credit card details
  3. Confirm the amount and it will be debited instantanenously from your account.
  4. Receive the online confirmation.

HDFC bank bill payment of credit card-

  1. Provide the credit card details
  2. confirm payment
  3. get the confirmation

SBI bill repayment- You can pay the bill through NEFT payment, credit card, debit card, electronic payment etc.
Thus, the online payment is the best way to do pay the credit card bills. Since now you have all the information about the credit card bill payment you will be able to pay it easily and quickly. As a cardholder, you should be responsible and smart about the uses of the credit card. It is important to handle it with care and pay the bills regularly to avoid any interest rate that can be levied in the case of late payments. So we can extract the best benefits if we are responsible enough to handle the card and make smart and careful purchases through it.

Ways to Reduce Your Home Loan EMI Payments

EMIs are preferably one of the most consequential outflows from your monthly income and it is always a better idea to try and minimize your burden! But let’s find out what exactly is your home loan EMI? EMI stands for Equated Monthly Installment which refers to a predefined amount you have to pay to your bank/lender on a fixed date, every month, for the full tenure of your loan period, until you have completely repaid the loan with the interest due.

Each EMI involves payment towards the principal amount and the interest for the entire duration of the loan. During initial years, a higher proportion of the EMI is generated by the interest payment on the principal amount. As the home loan matures, the interest component tends to decrease and the principal amount creates a higher percentage of the monthly payment.

home loan emi calculator

Higher down payment : Once a loan is sanctioned, choose to make a large down payment so that the principal amount is reduced. The calculation of interest payment is done on the principal, so smaller the principal, the lower would be the interest payment and EMIs would be smaller. It might appear difficult to arrive at a large down payment, but it will be useful in the long run and result in considerable savings in EMI payments. This is applicable in the case with long-tenure loans like a home loan which includes EMI payments over decades.

Choose a longer tenure : In the case of a long tenure loans, the EMI tends to reduce proportionately as your principal and interest are divided over a maximum number of months. However, your actual monthly outflow will be smaller, you will be paying out your EMIs for a longer period of time along with payment of interest for a longer period. So while your monthly burden tends to be smaller, you might be paying extra throughout the tenure of the loan.

Making an early prepayment : While making early pre-payment, you will considerably reduce your EMI for the majority of your tenure. It is better to consider prepaying part of your loan during early months/years of the tenure so that your principal decreases, hence you save interest on further payments.

Negotiating with the bank : If you have a good reputation with your lender and have been disciplinary making your repayments on time, then you may seek permission from your lender for a reduction in the interest rate. If you have exhibited good repayment behavior, there might be chances for a reduction in the interest rate by your lender, therefore, reducing your EMI burden.

Shifting your loan to another lender : If you find a lender who’s providing you better terms and conditions on your loan, it might be a good alternative to change your lender. However, it is necessary to calculate the costs involved in prepayment of your loan with your current lender and to ensure that the costs do not exceed your savings  you will benefit from your new lender.

Home Loan EMI Calculator Formula-

EMI Calculator uses the following formula to calculate your EMIs applicable on a home loan :

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

where,

EMI= Equated Monthly Installment

P= Principal Loan Amount

R= Monthly Interest Rate

N= Number of Monthly Installments

For example : To calculate EMI for a principal value of ₹ 1 lakh, 10% interest rate and 12 months tenure; following will be the calculations:

Principal amount : ₹  1,00,000

Rate of Interest : 10%

Tenure : 12 months

Calculated EMI : ₹ 8792

It is to be observed from the above example, there are three underlying factors behind EMI payments: principal amount, interest rate, and tenure. The EMI payment is directly proportional to the amount of loan and interest rates, and are inversely proportionate to the tenure of the loan. The higher the loan amount or interest rate, the EMI payments tend to become higher and vice versa. In the case of tenure of the loan, the total interest amount payable increases with the increase in tenure, hence, the EMI payments subsequently fall with an increasing tenure.

Home Loan EMI Calculator Excel-

The applicants of home loan can easily calculate their home loan EMI on MS Excel. They need to use the function PMT in order to calculate EMIs.

The following syntax needs to be used while calculating EMI in MS Excel.

Syntax : PMT (rate, nper, pv)

The variables used in the above formula are :

rate – Rate of Interest on the loan

nper- Total number of payments for the home loan

pv- Present value/principal

Home Loan Rate Saga Difficult to Fathom without Understanding MCLR

The demonetization of higher currency notes, as expected, brought about a massive rise in the bank deposits, making it easy for the lenders to lower their home loan rates. While Bank of Baroda (BoB) has slashed its 1-year MCLR to 8.35%, State Bank of India (SBI) cut the same by 90 basis points to 8%. Whereas, the private lender ICICI Bank cuts its 1-year MCLR to 8.20%. So, do you know how does MCLR influence the home loan rates? If not, then this article could tell you the same. So stay tuned as we crack the mystery of MCLR below.

Origination of MCLR

The Reserve Bank of India developed the concept of Marginal Cost of Lending Rate (MCLR) to reverse the trend of the inadequate response from the banks with respect to the changes made in the repo rate by the central bank. The repo rate signifies the rate at which the commercial banks borrow from the RBI for their short-term needs. All floating rate loans from April 1, 2016, onwards have already come under the MCLR regime. Typically, it’s home loan that is readily available at floating rates by most lenders. And when you think of its tenure that’s as long as 30 years, you can make hay in times of falling MCLR. However, the downside is the escalating lending rates in the wake of increasing MCLR induced by the hike in repo rates. But since the MCLR is on a declining trend and could continue to fall for a fair length of time, the home loan rates are expected to plunge further. So, the time is ripe for home loans as one would speak of.

home loan rates

What Does MCLR Include?

The bank arrives at MCLR based on the following points.

Operating Expenses-The day-to-day operational cost of the bank is referred as operating expenses

Cost for Maintaining Cash Reserve Ratio– Cash Reserve Ratio (CRR) determines the amount of cash that the commercial banks have to keep with the RBI. The bank does not receive any interest on the said deposit, thus becoming its cost.

Marginal Cost of Funds- The costs borne by the banks in the form of interest offered on savings and fixed deposit accounts, as well as the short-term borrowing rate i.e. repo rate.

Tenor Premium-This is an additional interest slab over the base rate based on the loan tenure.

Approach of Bank Towards Setting MCLR

The bank publishes the MCLR on a monthly basis subsequent to revising it once a quarter. The MCLR for different periods is announced by the bank. The bank publishes MCLR for a fortnight, month, a year, two years and three years. Whatever changes are brought in the 1-year MCLR, the interest rates on a home loan undergo a change. The banks are mandated to specify the rate reset frequency in the loan agreement paper.

There is a catch here to unfold. Want to know what is it? Many borrowers carry the false notion that every MCLR change brings a change in the lending rates. Actually, the loan will be serviced at 1-year MCLR as applicable on the date of loan disbursal for 1 year. For example- You got the receipt of the home loan on 31st August, 2016. The 1-year MCLR applicable at that time was 9.05%. The benchmark rate will continue to apply for a year i.e 31st August 2017. After that, the loans will be repriced. The MCLR changes are applicable for new loans only.  

Differentiate between Benchmark Rate and Lending Rate

The lending home loan rates are a sum of 1-year MCLR plus the spread. At the start of the ongoing year 2017, SBI bowled a ‘Googly’ to stump out many of its competitors by announcing a 90 basis point cut in the benchmark lending rate. At the beginning, everyone thought that the home rates had fallen to 8%. But in reality, the MCLR was brought down to 8% from 8.90% earlier. The lending rate was 8.60%-8.65% per annum, 60-65 basis point above the benchmark rate. Even though the lending rates fell, but the spread over the 1-year MCLR was more than what was earlier. Before the development, the spread over SBI’s 1-year MCLR was 20-25 basis points, lower than what it is now. In this way, the bank has reduced the transmission of rate cut benefits even by offering the home loan at lower rates.

Home Loan Rates of Few Banks and Housing Finance Companies

State Bank of India- 8.60%-8.65% p.a.

Bank of Baroda- 8.35%-9.35% p.a.

ICICI Bank- 8.65%-8.85% p.a.

HDFC Limited- 8.65%-8.75% p.a.

Indiabulls Housing Finance- 8.65%-8.85% p.a.

So, this was MCLR and its impacts on the floating rate home loans. Hope you have understood the phenomenon well to get your dream home soon.