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Product crack: Asha Home Loan

This home loan product caters to the income group that earns `8,000-10,000 per month

What is it?

Axis Bank Ltd has launched a home loan product called Asha Home Loan, meant for the low income group.

What does it offer?

This home loan product caters to the income group that earns 8,000-10,000 per month. Individuals with income over 10,000 can also apply for this loan. The bank will look at the family income rather than the individual’s income. Hence, you can pool your family income and apply for the loan. The bank will offer both fixed and floating rate loans to salaried and self-employed individuals.You can avail of this loan to buy a ready flat, an under-construction or resale property, or a plot or get a loan for constructing a house on a plot already owned. If you take a home loan of up to 20 lakh, you can get 90% of the property value as home loan.

Loan amount: The loan amount can be as low as 1 lakh. For small towns (where the population is less than 1 million), the maximum amount you can get is 15 lakh. For larger towns (population over 1 million), the maximum limit is 25 lakh.

Interest rate: The bank is offering the floating rate home loan at 10.75% for salaried individuals and 11% for the self-employed; and fixed rate loan at 11.75%.

Tenor: The maximum loan tenor is 30 years, where the age of a salaried borrower cannot exceed 60 years and that of a self-employed person cannot exceed 65 years, at loan maturity. But if you take a fixed rate loan under this scheme, the maximum tenor will be 20 years.

Documents: You will have to fill the application form and submit it with a photograph. You will also have to submit your co-applicant’s photo. You have to give an identity card, address proof, signature and age proof, your Permanent Account Number or Form 60 of the applicant or co-applicant, bank statements for the past six months and proof of income.

Mint Money take

The target customers for the loan are those who are looking to buy an affordable house. The customer segment is lower income strata and those aspiring to own their first house in the peripheral areas of Tier I cities or within Tier II and III cities. The bank states on its website that individuals who get their salaries in cash can also apply. All other charges such as processing fee, cheque/instrument swap charges, duplicate statement issuance charges and issuance charges for photocopy of title documents will be the same as for other customers.

Though the home loan product is an additional source of funds, do remember that the interest rate on the floating rate loan is 50-75 basis points higher than the bank’s usual home loan product (one basis point is one-hundredth of a percentage).

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