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Smart Home loan from HSBC
The world’s local bank has smart offers for those
Indians keen on owning a home: Smart Home.
BY OUR CORRESPONDENT
11 June, 2005: HSBC’s Smart Home lets the person availing the loan decide the interest you can afford to pay. The procedure is simple. The person in need can put all savings into Smart Home account. The quantum of interest paid gets slashed by up to 50 per cent, depending on the amount of savings.
HSBC calculates the principal on which your loan interest is calculated is the principal outstanding minus the savings deposited in the Smart Home account, above the EMI. If you pay an excess amount over the EMI, the excess amount will remain available for use but at the same time reduces the amount of interest. The interest is calculated by deducting the available current balance amount from the principal outstanding amount.
Isn’t it smart. The loan amount also reduces as per the EMI set at the beginning of the loan tenure. Smart Home is available for property under construction also.
The facility for pre-payment is also allowed foe Smart Home. A maixmum of 25% of the loan is allowed as pre-payment every financial year. For amounts above this, payement charge of 2% is levied by the bank. Pre-payment can be opted for only after a minimum 6 months after the loan is availed.
The interest rate of Smart Home is linked to HSBC mortgage lending rate (MLR), which is at present (As of June 11, 2005) 9%. Any change in MLR would have an impact on interest rate also. Tax benefits under the Income Tax act for principal and interest can also be availed.
The Smart Home account serves as your main bank account as well, offering you a 2-in-one facility. This means you would also enjoy free access to 10,000 visa ATMs with your power vantage debit card. Cheque book, debit card and internet banking access gives you full access to this account.
Eligibility
Resident Indians and NRI should have a minimum Rs 1,50,000 net income, with a minimum age of 21 to be able to avail the Smart Home loan. For salaried employees, the maximum age is 58. For sef-employed customers, the maximum age has been set at 65 years. The minimum loan amount is Rs 5 Lakh. The maximum loan amount is Rs 2 crore for applicants in Mumbai and Delhi. For others, it is Rs 1 crore. The maximum loan period permissible is 25 years. For resident Indian professionals and NRIs, the maximum tenor is 20 years. For self-employed resident Indians and NRIs the maximum period is 15 years.
The interest rate is s floating, which means it can fluctuate. The bank offers the facility to club incomes of three persons to avail the loan. But the income should be that of the spouse or parent and should be part of household income. The loans can be availed by only people living in and for properties in and around cities where HSBC has branches.
A 10% service charge and a 2% education cess would be applicable on all fees and charges.
Documents required
For proof of identity, the applicant should submit either Passport, Photo PAN card, defence identity card, voter’s identity card, driving license, photo ration card or government identity card.
For proof of residence, any of the documents like passport, ration card, telephone/electricity or society bill, driving license, voter’s identity card or Life Insurance Policy can be submitted.
For proof of age , passport, driving license, voter’s identity card, birth certificate
School leaving certificate, LIC policy of premium receipt which indicates applicants age, letter from the employer stating the age of the employee or photo ration card can be submitted.
Salaried employees should submit pay slip indicating deductions as well as Form 16, or latest IT returns and bank statements. For self-employed persons, last 2 years’ income certificate by a chartered accountant or profit and liability and balance sheet certified by CA and IT returns copies for last 2 years and bank statements of last 6 months is needed.
Salaried Non Resident Indians should submit copy of passport with visa stamps, copy o work permit indicating NRI status, contract copy for salary proof and overseas bank accounts of the last 3 months.
Self-employed NRIs need to submit trade license or equivalent document, overseas banking account /statement of 6 months, certified profit and liability statement and balance sheet of last three years. Passport copy and a brief profile of the applicant as well as the business should also be submitted.
Loan Against property
With residential property as collateral, HSBC offers loans with floating interest rates for a maximum tenure of 10 years. The option to transfer existing loan against residential property from another bank can also be availed. A processing fee of 0.5% will be applicable. Prepayment option is offered, subject to a maximum of 25% of outstanding loan once in a financial year. If the amount is more than 25%, a prepayment charge of 4% would be levied. Applicants should have a net income of Rs 1,50, 000 per annum in Bangalore, Chennai, Mumbai and Delhi. For applicants of Chandigarh, Pune, Hyderabad and Calcutta, the amount is Rs 1,00,000. For Jaipur, the amount is 75,000 per annum.
Loan against property is available to residents of these cities only.
Minmum age of the applicant is 21 years. The maximum age is 58 for salaried class and 65 for self-employed. Salaried applicants should have at least 3 years employement without break, while self-employed should be in the same business for at least three years.
All the documents listed for home loans for proof of identity, age, proof of income and proof if residence is required for loans against property.
BY OUR CORRESPONDENT
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