Home loans have helped countless people realize their dream of purchasing their dream house. As a result of a number of benefits associated with the home loan, a large number of people have started relying on it to purchase a house. This increasing popularity of home loans has prompted banks and other financial companies to launch a number of products for small value home loan customers. Let’s take a close look at the features of these products and what benefits can they bring to you.
What are small value home loans?
Banks and other lending institutions usually classify Home loans up to the value of Rs.30-35 lakhs as ‘small value’ home loans. The common notion is that small value loans are just for low-income group. However, contrary to popular belief, small value home loans can be availed for many reasons.
Some of the common reasons to avail a small value home loan are mentioned below:
- You are buying a small value property .
- You only require a small loan amount, since you have enough funds saved up.
- You wish to opt for a home loan balance transfer, with an outstanding amount less than Rs.30 Lakhs.
Let’s have a quick look at some special products financial institutions have recently launched for this segment.
To avail a usual home loan of Rs. 40-50 lakhs, borrowers are required to have a stable source of income. But in recent times, the home loan providers, especially Non-Banking Financial Companies have tried to cater to the needs of self-employed borrowers through small value home loans.
Some of the other customers who usually avail a small home loan are:
- Customers with low income
- Customers who need a high loan to value
- Customers who cannot provide standard documents like income proof, Form 16, pay slips, etc.
Here are the features of small home loans for borrowers who cannot provide all the mandatory documents:
- Mandatory KYC documents
- Maximum loan value Rs.20-35 Lakhs
- Higher interest rates than regular home loans
- Home loan tenure up to 20 years
- Loan amount up to 85% of home value
- Female co-applicant is mandatory
On the other hand, if borrowers have all the required documents, they can avail a small value loan at comparatively lower interest rates. Discount for women borrowers and high Loan to Value (LTV) ratio are some of the added advantages of having all the required documents in place.
So if you are planning to buy a new property for less than Rs. 30 lakhs, you can certainly consider availing small value home loan. With proper documentation, it is possible that you can obtain a loan amount of upto 90% of the home value at a low-interest rate. Lastly, with leading Non-Banking Financial Institutions, you can avail a small value home loan through a hassle-free online application process,
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