As a salaried home buyer today, you should keep in mind the overall costs of land,apartments or villas which includes the location, budget, and many other charges like stamp duty, registration charges etc. before going ahead with your plan of processing a home loan.

Introduction

Union Bank of India, one of India’s largest government owned banks offers a suitable way to fulfill your dreams with Union Bank of India Home Loans.

In this article, we study all possible aspects related to Union Bank of India Home Loans.

A home loan in general is a large amount of money 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

Union Bank of India Home loan interest rate starts from 8.30% 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.

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 Union Bank Home Loan

• Union Bank Home Loans are available for both salaried and self employed.
• Special rates for women customers.
• Home Loans granted to age group between 21 to 60 years.
• Security: Generally Mortgage of property you are planning to purchase, renovate or construct.
• Loan to Value Ratio is 90%.
• Tenure of loan is between 5 to 30 years.
• Interest rates range from 8.35% to 8.55%.
• EMI of Rs. 772 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 daughter is graduating in 2 years and you plan to invest in a luxurious villa for her, so that she may have a roof over her head resulting in a secure future. You go to Union bank of India to enquire about the home loan. The cost of a luxurious villa is estimated to be 75 lakhs and you want to take a loan for 5 years. The bank is offering the loan at 8.35%.

Now, you have many options since there are a number of banks offering home loan for villas. 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:

Now, consider different methods for saving 15 lakhs down payment at Union Bank of India for the next 2 years:

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 luxurious home you dreamed for you child sooner than you expected.

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 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.

Calculate your EMI

Parameters to decide Interest Rates:

Union Bank home loan will have criteria on which interest rates will depend and vary. The loan amount you are opting for, your occupation and your salary are factors that will determine the interest rates for you. Range of interest between 8.35% – 8.35%

• 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 would enable 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 Union 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:

• Income, Age, Qualification
• of Dependants
• Assets, liabilities, stability, and continuity of occupation
• City in which property is based
• Saving history
• Purpose of the Loan (Purchase/construct on identified property /Transfer your existing home loan Purchase not yet identified property )
• Residency status ( Resident Indian/ Non-Resident Indian )
• Type of Employment (Salaried/ Self Employed Business/ Self Employed Professional /Salaried Professional/ Retired /Student/ Homemaker )
• Co-applicant Income

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 – Union Bank charges 0.59% processing fees of the loan amount and a maximum of Rs. 11,800
• Technical and Legal Charges – Union 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 Union 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

Union Bank of India 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.

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