What is housing Loans?
Housing loans are loans allowed by financial institutions,
especially banks. Earlier, banks in India were not allowed housing loans to
general public, in easy terms and conditions. But, as per instructions from
Reserve Bank of India, housing loans became priority sector advances and it is
one of the fast selling products in in Indian banks.
Priority sector lending under housing
loans, as per budget, for 2012-13 is as follows.
1. Loans up to Rs. 25 lakh, irrespective of location, to
individuals for purchase/construction of a dwelling unit per family, excluding
loans granted by banks to their own employees.
2. Loans given for repairs to the damaged dwelling units of
families up to Rs. 1 lakh in rural and semi-urban areas and up to Rs. 2 lakh in
urban and metropolitan areas.
3.Assistance given to any governmental agency for
construction of dwelling units or for slum clearance and rehabilitation of slum
dwellers, subject to a ceiling of Rs. 5 lakh of loan amount per dwelling unit.
4.Assistance given to a non-governmental agency approved by
the NHB for the purpose of refinance for construction/reconstruction of
dwelling units or for slum clearance and rehabilitation of slum dwellers,
subject to a ceiling of loan component of Rs. 5 lakh per dwelling unit.
5.Loans granted up to March 31, 2010 to Housing Finance
Companies (HFCs), approved by National Housing Bank for the purpose of
refinance, for on-lending to individuals for purchase/construction of dwelling
units, provided the housing loans granted by HFCs do not exceed Rs.20 lakh per
dwelling unit per family.
Whereas, loans up to Rs. 25 lakh to individuals for
purchase/construction of dwelling unit per family (excluding loans granted by
banks to their own employees) and loans given for repairs to the damaged
dwelling units of families up to Rs. 1 lakh in rural and semi-urban areas and
up to Rs. 2 lakh in urban and metropolitan areas.
Priority sector loans are, comparatively with smaller rate of
Interest. So banks allow housing loans, under priority sector, with a limit as
shown above.
General public individuals are eligible for housing loans
under non-priority sector also, beyond the above limit, provided that they have
enough repaying capacity.
[Source: http://yourhouse4u.blogspot.in/]
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