Bangalore, also known as Bengaluru, is the IT hub of India. It is also known as the Silicon Valley of India and is one of the ideal cities to live in. The city has one of the best infrastructure amenities as well as several prestigious educational institutes, medical facilities, and shopping centres, making it a popular choice to settle in. Its population of around 2 million employees has stretched the city’s residential population. Bangalore is India’s third-largest city and currently ranks as one of the world’s fastest-growing urban cities.
Features of Home Loan in Bangalore
Bangalore ranks among the top five populous cities in India, therefore the demand for residential property is ever-increasing in the city. Many private IT giants and public sector firms have their headquarters in Bangalore, which attracts people to settle here for better job prospects. A larger population pushes for increased demand for housing facilities, which in return drives the demand for home loans.
Eligibility for Home Loan in Bangalore
Any citizen of India above the age of 21 years, either salaried or self-employed, is eligible for availing of a home loan in India. The documentation process is easy in Bangalore as compared to the other cities in India. The documentation required for eligible applicants for a home loan in Bangalore includes KYC (identity proof and residence proof) along with bank statements and a home loan application form. Further, the latest salary slips for salaried applicants and proof of business continuity of at least 5 years for businessmen or self-employed applicants is mandatory to avail of a housing loan in Bangalore.
Subsidized home loans can be availed of under the Pradhan Mantri Awas Yojana Urban (PMAY-U) scheme by Economically Weaker Sections (EWS) and Low-Income Groups (LIG) with an annual household income of Rs.3 lakh and between Rs.3 to Rs.6 lakh. respectively. The applications for Middle Income Group closed on 31st March 2021. However, those falling under the EWS and LIG categories can apply until 31st March 2022.
Benefits of Home Loan in Bangalore
There are multiple benefits of availing of a home loan in Bangalore
Multiple Pre-approved Housing Projects to Choose From
Many builders are investing in Bangalore due to the ever-increasing demand for residential property in the city. The real estate projects are pre-approved which provides the buyers multiple options to choose from.
Eligible for Subsidised Interest Rate under the PMAY-U Scheme
Those eligible for a subsidized interest rate under the PMAY scheme can apply for a subsidy of around 6.5% interest rate on a loan amount of Rs.6 lakh.
Lower Interest Rate
A large number of housing projects in the city provides buyers with the option to negotiate with builders as well as lenders for better prices and better interest rates, respectively.
Balance Transfer and Top Up Facility
All leading facilities, such as balance transfer and top-up loan facilities, are available in the city. A home loan applicant can easily apply for a balance transfer of a home loan whenever there is an attractive offer or if a lender is offering lower interest rates.
Income Tax Benefits
Those applying for a home loan in Bangalore are eligible for tax exemption benefits on home loan principal and interest amount under Section 24(b) and Section 80C of the Income Tax Act, 1961.
Pre-approved Home Loans:
This is a unique scheme offered by lenders based on a borrower’s credit score, liabilities, and financial liabilities. The lender provides sanction of home loan limits before finalizing the property, this gives the borrowers an edge to negotiate with the builder.
Types of Home Loan Offered in Bangalore
The city offers multiple types of home loan choices as it is one of the most developed cities in India. Some of the types of home loans available in Bangalore are:
- PMAY Home Loan: This loan can be availed of from any bank or housing finance corporation by applying through the official website of PMAY. The borrowers are provided subsidized relief in the form of a lower interest rate for a fixed amount, and the remaining amount is paid off based on the standard interest rate of the market.
- Home Purchase Loan: A home purchase loan is offered by banks and housing finance corporations to buy an under-construction property, resale residential property, or ready-to-move-in property.
- Composite Loan: Loans are granted under a composite loan scheme when the applicant plans to purchase a residential plot to construct a house within three years.
- Step-up Loan: Here, loans repayment is divided into two shifts at the time of the disbursal of the loan amount to the borrower. Borrowers can exercise their right to pay lower EMI in the initial stages, and increase their EMI during later stages as per the increment in their disposable income.
Bridge Loan: A bridge loan is a short-term loan that helps in bridging the gap in funds between the time a borrower purchases a new property and the sale of an existing property. This loan serves as a buffer and helps the borrower in the timely payment of EMI.
