Analyzing the skyrocketing property prices, most houses or flats would necessarily have to be purchased with the help of a housing loan by the common salaried people. The overall Nett cost which includes the location, budget, and many other charges like stamp duty, registration charges etc. must be considered before going ahead with your plan of purchasing a home loan.
Introduction
Corporation Bank offers a suitable way to fulfill your dreams with Corporation Bank Home Loans.
In this article, we study all possible aspects related to Corporation Bank Home Loans.
A home loan is usually a high amount and is generally taken for a longer period upon which a rate of interest is levied. An important tool like Home Loan EMI calculator is therefore much needed to help you evaluate and plan your budget beforehand.
Interest Rate
Corporation Bank Home loan interest rate starts from 8.85% which is one of the best interest rates available in the market. The rates vary depending upon certain criteria like occupation, the quantum of income, nature of home loan, etc.
Loan Amount
Corporation Bank Home Loan Interest Rate
Upto Rs. 25 Lakh
8.85%
Rs. 25 Lakh – 75 Lakh
8.85%
Rs. 75 Lakh – 2 Cr
8.85%
Above Rs. 2 Cr
9.10%
You definitely want to ensure that your lender provides auto-adjusted benefits on interest rates that extends into the future. That’s the reason why you need a credible lending institution with a dedicated and experienced workforce who will guide you through the entire process.
Features of Corporation Bank Home Loan
Corporation Bank Home Loans are available for both salaried and self employed.
Special rates for women customers.
Home Loans granted to age group between 18 to 65 years.
Security: Generally Mortgage of property you are planning to purchase, renovate or construct.
Loan to Value Ratio is 90%.
Maximum Tenure of loan is 30 years.
Interest rates range from 8.85% to 9.10%.
EMI of Rs. 794 per lakh
So, are you ready to buy a house?
If the answer is YES, you must be having a lot of questions in your mind like:
Where will I arrange the money from?
Am I eligible for the loan?
How much down payment do I have to make?
How much EMI will I need to pay every month?
How can I compare the EMIs of different banks on my own?
Where will I arrange the down payment amount and EMI amount from?
Let’s understand this with a simple example:
Let’s assume that your children are growing up and you want to renovate your ancestral house into a luxurious villa, so that children have more space to study, live and play. You go to corporation bank to enquire about the home loan. The cost of renovation is estimated to be 75 lakhs and you want to take a loan for 5 years. The bank is offering the loan at 8.75%.
Now, you have many options since there are a number of banks offering home loan for renovation. You need to calculate and check what the best fit is for you. Here, you can use the Home loan EMI calculator to check and compare.
The second obvious question is the source from where you will arrange the initial down payment?
The simplest option you have is to approach any relative or friend. But if you want to arrange it on your own then you must really think smart and be calculative in your decision. A great way to begin is ClearTax SAVE!
You have options like Savings account, RD (Recurring Deposit), SIP (Systematic Investment Plan) and many other ways to save enough for the initial down payment.
Let’s find out the best way to save your money, for down payment and for other expenses too:
Loan Value
75 lakhs
Time
5 yrs. (60 months)
Down payment
20% of Property Value = 15 lakhs
Now, consider different methods for saving 15 lakhs down payment at Corporation Bank for the next 2 years:
Type of Investment
Interest Rate
Maturity Amount after 2 Years
Savings Account
3.50%
Rs. 15,55,930 (Gains=Rs. 55,930)
Recurring Deposit
6.60%
Rs. 16,07,608 (Gains =Rs. 1,07,608)
SIP
14-18%
Rs. 1816439 (Gains = Rs. 3,16,439)
Hence from the above table SIP is the most logical saving’s scheme; as an SIP, will enable you to invest regularly keeping in mind your goal by diversifying your investment to get desired results. You will have a renovated home you dreamed for you children sooner than you expected.
Home Loan EMI Calculator, how does it work?
An EMI Calculator is a handy tool that calculates the monthly amount payable to the lender (Bank) every month. To calculate the EMI applicable on your loan amount, you need to use the sliders above to adjust the values of the Principal amount (P), Time duration (N), and Rate of interest (R).
Follow these steps to calculate your EMI Amount.
Use the slider for selecting the loan amount
Select the loan tenure in months using the slider
Move the slider and select the interest rate
Recalculate your EMI anytime by changing the input sliders
EMI will be calculated instantly when you move the sliders
Parameters to decide Interest Rates:
Loan amount: Loan amount will decide the interest rate you are going to pay. The more the loan amount, the lesser the interest rate
Your Salary:Salary amount will also be one of the deciding factors for the interest rate you are going to pay to the bank. Higher the salary lower would be the interest rate
Type of loan opted for: The concessional rate of the home loan is offered for certain borrowers. Say, women borrowers enjoy a lower rate of interest compared to others, under different schemes. This way the interest rate could be higher or lower
It is generally advantageous to take a housing loan as it will allow you to get tax exemptions. However, you must consult your CA/ income tax advisor to know the benefits/disadvantages in your specific case.
Eligibility Criteria
To get Corporation Bank’s home loan, the eligibility standard must match. That becomes an important deciding factor for your loan amount. Following points fall under the eligibility criteria:
Salaried, Self- Employed Professional or a Businessman
Income
Age
Qualifications
Number of dependents
Co-Applicants Income
Assets, Liabilities, Stability, and Continuity of Occupation of the borrower
Savings History
Further, the loan eligibility will also be dependent on the value of property selected by you.The deciding factor of the loan amount that would be granted to you will be the close assessment of the value of the property, the capacity to repay the loan amount and many others to determine the potential borrowers. So, an eligibility calculator can be used for the same.Some of the key eligibility factors are listed below:
Interest Rate
8.85 % – 9.10%
Age
18 – 65 years
Job Stability in case of Salaried (in years)
2 years
Loan to Value Ratio
Up to 90%
Penalties/Other Charges
In addition to the mentioned interest rates, home loan also carries the processing fee, foreclosure charges, actual charges towards valuation fee, advocate’s fee for property search, title investigation report, stamp duty and other charges that are applicable.Let’s discuss some charges in detail:
Processing Fee – Corporation Bank charges 0.50% processing fees of the loan amount and a maximum of Rs. 50,000
Technical and Legal Charges – Corporation Bank also charges technical and legal fees which differ with time according to the criteria.
Prepayment Charges: If you decide to foreclose or transfer your housing loan to another bank, you need to submit an application for the same to Corporation Bank and follow RBI rules, which states nil charges on floating rate home loans.
Process of Applying
You can directly go to the bank or apply online by going through the bank website. You can avail the loan at low rates and low processing charge if you opt for the online mode. They will initiate the process by collecting your documents, will check your credit score, the value of your property for which you wish to take the loan and all other associated technical and legal terms. Once it is all done, you will be intimidated.
Documents
The following documents are required along with your Home Loan application:
Agriculturists
Salaried Customers
Businessmen – Professionals
Application form with photograph
Application form with photograph
Application form with photograph
Identity and Residence proof
Identity and Residence proof
Identity and Residence proof
Last 6 months bank statements
Last 6 months bank statements
Last 6 months bank statements
Processing fee cheque
Processing fee cheque
Processing fee cheque
Income Documents
Copies of Title Documents of Agricultural Land depicting Landholding
Latest Salary Slip
Educational Qualifications Certificate and Proof of Business
Copies of Title Documents of Agricultural Land depicting crops being cultivated
Form 16
Business Profile and Previous 3 years Income Tax returns (self and business)
Statement of previous 2 years of loans availed
Previous 3 years Profit/Loss and Balance Sheet
Corporation Bank Tax Benefits
The income tax laws in India provide certain benefits for taxpayers who avail a home loan. Such taxpayers are eligible for a deduction of the interest paid on such house property to the extent of Rs 2 lakhs. In case of a self-occupied house in that particular Assessment Year (AY) they can claim the entire interest paid during the AY as a deduction without any limit, that is if they have given the property on rent.
Further, the principal component of such loan repayment can be claimed as a deduction from the total income under Section 80C, up to a maximum of Rs 1.5 lakhs.
