In recent years, the Indian government has been focusing on developing schemes, missions, and plans to provide Indian citizens housing facilities. “Housing for all by 2022” mission is one such initiative that primarily focuses on providing ample services and facilities to Indian citizens to avail of affordable housing, either through direct or indirect methods. Thereby know more about home loan and its factors.
The Government of India is now focusing on developing different schemes. They are specifically tailored for each income category so that everybody can achieve their dream of constructing a house that they can call their “home.”
With the help of schemes like “Pradhan Mantri Awas Yojana (Urban and rural)” and “Credit linked subsidy scheme(CLSS),” citizens can not only avail of housing through directly from the government but also now citizens can avail of low home loan interest rates especially from government-controlled banks. As always, SBI is one of the leading public sector banks; they usually provide the lowest interest rates among all other public and private sector banks.
Before moving on in the article to talk about how different schemes Of Central and state government and banks are affecting the Indian citizens, We should first talk about home loan interest rates in major public and private sector banks. SBI is the leading public sector bank, providing the lowest home loan interest rates at around 7% onwards. In the private sector, HDFC Bank provides the lowest interest rate of 6.95% onwards. The second and third largest private sector banks, ICICI and Axis Bank, provide interest rates of 7.05% onwards and 7.75%. We can see stiff competition between private and public sector banks.
New loan schemes being developed
Due to government directive and encouragement, more and more banks are developing new schemes to lure customers into buying their home loan scheme. In recent years, approximately six different Home Loans types have been schemed by the major banks Providing home loan schemes. These are “home loan for the land purchase,” “home purchase loan,” “home loan for construction,” “home extension loan,” “home improvement loan,” and “home loans for NRI.”
Many major banks have come up with new lucrative schemes to attract a large customer base. ICICI bank’s 1% cash back scheme on home loan EMI is one such scheme launched recently, which attracted many customers to their bank. Axis bank’s EMI waiver scheme has also helped many customers complete their dream of constructing a house.
Many multinational Housing Finance Companies have also entered this competition. Tata Housing and Indiabulls Housing Finance is one such example. The partnership between these two major housing Finance Companies has led to an extremely attractive scheme with a 3.99% home loan interest rate. However, this was a special and Limited time scheme. But the Generation of schemes like these shows that major banks and Housing Finance Companies are now curating schemes to attract individuals from each income category group. Overall schemes like these, in the long run, affect mostly the customers.
To complete their target of providing houses to families and individuals of the Economic weaker section and low-income group, India’s Government has developed multiple schemes targeting specifically this income category. Schemes like credit-linked subsidy scheme class and missions like Pradhan Mantri Awas Yojana Urban and rural have resulted in improved housing conditions of economically backward and lower-income group families. Also, the Government of India has announced to relax the lengthy and complicated loan sanctioning process by simplifying the documentation process and many other fees charged by the banks.
Not only the Central Government but many state governments have also joined the race to provide housing facilities to middle and lower-income groups. Many state governments are actively recognizing and reconstructing suitable unused lands in their cities, which can then be transferred to people of these income categories. Many state governments have already started allocating unused land in the outer boundary of their capital cities to comply with the housing demands of the middle-income group.
All of these schemes by the central government, State Government, and major banks and Housing Finance Companies show that Housing Finance is now the emerging economic sector in which most companies want to invest and spread their business. This is very good for the customers as the competition would keep the common man’s pricing checked.
As more and more banks are entering the home loans sector, this becomes a Win-Win situation for the customers. The presence of many different companies ensures that in this sector, the “home loan schemes” and “home loan interest rates” are always affordable due to competition between these companies.