Bajaj Finserv Home Loan Interest Rates
Interest Rate

Starting @ 6.9%

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Processing Fee

Upto 1.00%

Loan Tenure

3-20 years

Lowest EMI Per Lakh

₹ 769 for 20 years

Prepayment Charges

Nil charges for floating rates loans

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About Bajaj Finserv Home Loan

Bajaj Finserv is one of the most trusted Home Loan providers among the non-banking financial companies (NBFCs) that provide housing finance. Bajaj brings with it an element of trust and commitment gradually built up over years of providing exemplary customer service. Bajaj Finserv provides one of the most affordable interest rates in the housing finance segment in India.

Home Loan Interest Rate - A Crucial Aspect

A Home Loan is a long-term liability with a repayment tenure that can extend to 30 years. Hence, the rate of interest plays a vital role in deciding which Home Loan service provider to choose. A difference of 0.5% in the interest rate over the entire loan tenure can prove to be a substantial amount. Bajaj Finserv should prove to be the right choice because they offer one of the lowest Home Loan interest rates when it comes to NBFCs. Besides, Bajaj Finserv ensures complete transparency when it comes to charging other fees such as processing fees, foreclosure charges, and so on.

Bajaj Finserv Home Loan Interest

Bajaj Finserv offers Home Loans with interest rates starting from as low as 8.60% per annum. The Bajaj Finserv Home Loan interest rates are linked to the Bajaj Finance Limited Floating Reference Rate (BFL-FRR). Depending on the loan amount and credit rating of the borrower, Bajaj Finserv calculates the margin. This margin is deduced from the BFL-FRR before being offered to the customer. Therefore, the rates of interest of Bajaj Finserv Home Loan can vary from one customer to the other.

Types of interest rates Applicable rates to customers (per annum)

The promotional interest rate for the salaried class of employees

8.60% onwards

Regular housing loan interest rate for salaried individuals

BFL-SAL FRR - Margin = 9.05% to 10.30%

Regular housing Loan Interest rate for self-employed individuals

BFL-SE FRR - Margin = 9.35% to 11.15%

Reference rate - BFL SAL FRR (for salaried employees)

20.90%

Reference Rate - BFL SE FRR (for self-employed individuals)

20.90%

These interest rates apply for all Home Loans up to 30 Lakhs

  • The BFL-FRR for Home Loan accounts before 20th June 2018 was 12.95%
  • Apart from the floating rate of interest, Bajaj Finserv offers a fixed rate option for customers
  • Fixed rate of interest for salaried customers: 9.05% to 10.30%
  • Fixed rate of interest for self-employed customers: 9.35% to 11.15%
  • Customers have a choice to switch over from a fixed rate to a floating rate and vice versa

Factors That Affect BFL-FRR

Bajaj Finserv floating rate of interest on Home Loans depend on various factors. The BFL-FRR is a critical aspect, as the rate of interest is linked to it. BFL-FRR depends on market-related factors such as demand and supply position. NBFCs are governed by the Companies Act 1956 and do not come under the direct control of the Reserve Bank of India (RBI). Hence, the changes in the repo rates announced by the RBI from time to time do not usually affect the BFL-FRR. However, the market rates depend on the RBI repo rates. Therefore, there is an indirect influence on the Home Loan rates offered by NBFCs like Bajaj Finserv.

Factors Affecting Bajaj Finserv Home Loan Interest Rate

If you look at the interest rate table carefully, you will notice that Bajaj Finserv charges Home Loan interest rates in a specific range. Therefore, it entails that every borrower will not necessarily have the same interest rate on Home Loans. Various factors go into deciding the margin that Bajaj Finserv stipulates.

  • Salaried employees have an advantage because of the regular source of income they have. Therefore, the rate of interest for salaried employees is comparatively less than that for self-employed individuals.
  • Other factors that affect the rate of interest are the credit rating of the borrower, the profession/occupation of the borrower, the age, and the loan amount. Women borrowers get a benefit of 0.5% across the board in almost all cases.
  • The better the credit rating, the lower is the interest rate
  • Loans for amounts exceeding 30 Lakhs have a different rate structure. Bajaj Finserv offers interest rates on a case-to-case basis.
  • Another factor that influences the Home Loan interest rates is the loan-to-value (LTV) ratio. The marketability of the security is also an influencing factor that decides the margin levied by Bajaj Finserv.

Fixed Rate of Interest

A fixed rate of interest is one that does not fluctuate with the changes in the market forces. Thus, you can refer to it as a market-independent rate. This rate remains the same throughout the loan tenure.

Advantages of a Fixed Home Loan Interest Rate

  • As the rate of interest is fixed for the entire Home Loan tenure, there will be no change in either the EMI or the loan repayment tenure. It enables the borrower to plan the Home Loan instalment liability better.
  • This rate does not depend on market fluctuations. Therefore, it is advantageous when the reference rate rises.

Disadvantages of a Fixed Home Loan Interest Rate

  • Lenders forecast the market position before deciding on the fixed rate of interest. Usually, you find the fixed rates of interest to be at least 0.75% to 1% more than the corresponding floating rate of interest. It is to cater to the market fluctuations that could occur in the future.
  • The higher base rate makes the Home Loan expensive as compared to a floating rate of interest Home Loan. The Home Loan borrower ends up paying a higher EMI.
  • Borrowers who opt for a fixed rate of interest have to incur foreclosure penalty if they intend to close the loan prematurely. This penalty is applicable even if you choose for a Balance Transfer to another institution.

Bajaj Finserv Home Loan - Floating Rate of Interest

Bajaj Finserv Home Loan floating rate of interest is linked to BFL-FRR. At present, BFL-FRR is 20.90%. Bajaj Finserv deducts a margin on this rate depending on various factors. These factors include the repayment record of the borrower, the loan amount, and the occupation of the borrower. Salaried employees having a regular source of income are eligible for a higher margin as compared to self-employed individuals. Similarly, loans for amounts more than 30 Lakhs have a different rate structure.

 Advantages of Floating Rate of Interest

  • The floating rates of interest are lower than the fixed rates. Hence, the borrower gains by way of a reduced EMI burden. It can enhance his/her loan eligibility.
  • Under circumstances where the interest rates fall, the floating rate of interest is the ideal option to go for.

Disadvantages of Floating Rate of Interest

  • The rates can fluctuate every quarter. Hence, there can be a change in the EMI or the loan tenure. Usually, banks and NBFCs prefer to maintain the EMI constant and alter the loan repayment tenure. If the rates go up, the tenure increases and vice versa. At times, there can also be a change in the EMI amount. Therefore, it can affect the budget of the borrower.
  • The borrower does not incur any prepayment or foreclosure charges when they opt for a floating rate of interest. RBI has introduced clear-cut guidelines in this regard for both banks and NBFCs.

Fixed Cum Floating Rate of Interest

Many Home Loan providers provide the option of having a fixed-cum-floating rate of interest. Under such circumstances, the rate initially remains fixed for a specific tenure (3 to 5 years) following which it automatically shifts to a floating regime. The borrower can thus have the advantage of both the fixed and floating rates of interest.

Bajaj Finserv Home Loan Charges

There are a few charges associated with the Bajaj Finserv Home Loan, such as:

  • Processing Fees
    • For salaried individuals: Up to 0.80% of the sanctioned loan amount
    • For self-employed individuals: Up to 1.20% of the sanctioned loan amount
  • Charges for loan statement: 50
  • EMI bounce charges: 3,000
  • Secure fee (One time): 9,999
  • Penal interest: 2% per month
  • Mortgage origination fee (non-refundable): 1,999
  • Part Prepayment charges
Type of Borrower Period Prepayment charges

Individual borrowers - Floating rate of interest

Above 1 month

NIL

Non-individual borrowers - Floating rate of interest

Above 1 month

2% of the part payment amount

All borrowers - Fixed rate of interest

Above 1 month

2% of the part payment amount

Foreclosure Charges

Type of Borrower Period Foreclosure charges

Individual borrowers - Floating rate of interest

Above 1 month

NIL

Non-individuals borrowers -Floating rate of interest

Above 1 month

4% of the foreclosure amount + applicable taxes

All borrowers - Fixed rate of interest

Above 1 month

4% of the foreclosure amount + applicable taxes

Bajaj Finserv Home Loan Interest - Method of Calculation

Bajaj Finserv calculates Home Loan interest on daily reducing balances. Therefore, regular repayment of EMIs is beneficial to the borrower. Bajaj Finserv accepts repayments in the form of EMIs. EMI denotes Equated Monthly Instalments and comprises of two components, the interest component, and the principal repayment component. In the early stages of the loan, the interest component is higher than the principal repayment portion. As time progresses, the principal reduces, whereby the principal repayment component of the EMI becomes higher than the interest portion.

Bajaj Finserv Home Loan Interest Rate - PMAY Subsidy Treatment

Bajaj Finserv is one of the member lending institutions authorised by the Government to offer Home Loans under the Pradhan Mantri Awas Yojana (PMAY). This program provides the benefit of interest subsidy to the different categories of borrowers. This subsidy is credited upfront to the loan account. This interest subsidy is available on the PMAY - Urban Home Loan Scheme only. As a result, the borrower has a lower interest burden and EMI.

Category of Borrower Income Criteria Loan amount range eligible for the subsidy Maximum interest subsidy

Economically Weaker Section - EWS

Annual Income up to 3 Lakhs

6 Lakhs

6.5% subsidy with a maximum of 2.67 Lakhs

Lower Income Group - LIG

More than 3 Lakhs and up to 6 Lakhs

6 Lakhs

6.5% subsidy with a maximum of 2.67 Lakhs

Middle Income Group - MIG-I

More than 6 Lakhs and up to 12 Lakhs

9 Lakhs

4% subsidy with a maximum of 2.35 Lakhs

Middle Income Group - MIG-II

More than 12 Lakhs and up to 18 Lakhs

12 Lakhs

3% subsidy with a maximum of 2.30 Lakhs

Bajaj Finserv Home Loan Interest Rate - FAQs

What types of interest rates does Bajaj Finserv offer to its customers?

Bajaj Finserv offers fixed and floating rates of interest on its Home Loans.

The rates of interest depend on various factors, such as:

  • Category of the borrower (Salaried/Self-employed)
  • Loan Amount (Loans over 30 Lakhs have a different rate structure)
  • The credit score of the borrower (higher the credit score, lower is the interest rate)

What is the difference between the fixed rate and the floating rate of interest?

The fixed rate of interest remains the same throughout the loan tenure. The floating rate undergoes changes depending on the market conditions. There is a concept of a floating-cum-fixed rate of interest where the borrower pays interest at a fixed rate for a specific period. Subsequently, the rate structure changes to a floating one.

How do you calculate the Home Loan EMI for a Bajaj Finserv Home Loan?

The Company specifies the EMI payable on the Home Loan in your loan sanction letter. However, you can verify the same by using the Bajaj Finserv EMI calculator. Entering necessary information such as loan amount, rate of interest, and loan repayment tenure gets you the EMI.

How is the floating rate of interest better than the fixed rate?

At the time of fixation of the interest rate, you will notice that the fixed rate of interest is invariably higher than the floating rate of interest. It is to compensate for the market fluctuations that could happen in the future. Therefore, you end up with a higher EMI. It can also reduce your loan eligibility amount. Secondly, there are no foreclosure charges for individuals who opt for a floating rate of interest.

Why there are no foreclosure charges on fixed interest rate Home Loans?

The Reserve Bank of India has made it explicitly clear that banks and NBFCs should not charge foreclosure penalties from individual borrowers opting for a floating rate of interest Home Loan.

Will my EMI change with a change in the rate of interest due to the floating rate regime?

Your EMI should vary according to the fluctuations in the rate of interest. However, banks and NBFCs prefer to keep the EMI constant and increase or reduce the loan tenure accordingly.

Is it beneficial to vary your EMI or loan tenure?

It is always beneficial to vary your EMI according to the fluctuations rather than alter the loan repayment tenure.

Are income tax benefits available on my Home Loan interest charged by Bajaj Finserv?

Yes, every borrower gets income tax benefits under Sec 24 and Sec 80C of the IT Act, as per Government guidelines.

What are the benefits in the interest rates for PMAY borrowers?

PMAY-U borrowers get interest subsidy on the Home Loans depending on the category to which they belong. This subsidy is an upfront subsidy. Hence, these borrowers get concessions in the EMI.

Why do salaried individuals get benefits in the interest rate as compared to self-employed individuals?

The nature of income is critical for the repayment of the Home Loan. Salaried employees have a regular income structure, whereas it is not the case with self-employed individuals. Therefore, there is a benefit in the interest rate structure for salaried persons.

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