Central Bank of India home loan interest rates start from 6.85% p.a for maximum of up to 30 years. You can instantly check the Central Bank home loan interest rate online using a home loan EMI calculator. You can avail home loan for purchase, construction or renovation of a housing property. Your Central Bank of India home loan eligibility will be determined according to EMI/ NMI ratio.
Central Bank of India has the distinction of being India's first commercial bank to be owned and managed by Indians. The credit for establishing this Swadeshi Bank goes to a visionary, Sir Sorabji Pochkhanawala in 1911. Earlier known as Central Bank of India Ltd, the bank was the first one to introduce recurring deposit scheme. It was also among the first banks to be nationalised along with 13 other banks on July 19, 1969.
The bank has the credit for introducing the first credit card in India. From its humble nationalistic origins in 1911, the bank has demonstrated exponential growth to spread its wings throughout the country. Today, it has more than 4650 branches situated in every state and union territory in India. The bank has earned a solid reputation for being people's bank over years of exemplary customer service.
Central Bank of India caters to every section of the Indian society from the richest to the poorest of people. It has introduced tailor-made products to suit the requirements of every Indian. An array of loan products of Central Bank of India includes the housing loan as the most prominent one. The bank offers Home Loans for purchase or construction of houses and apartments.
There are loan products that cater exclusively to renovation and home improvement. As a premier nationalised bank in this country, the bank is a frontrunner in the Pradhan Mantri Awas Yojana (PMAY), as well. The positive features of Central Bank of India Home Loan include attractive pricing. Its Home Loan interest rates are among the lowest in the banking industry in India.
Central Bank of India offers Home Loans linked to its Marginal Cost of Funds-based Lending Rate (MCLR). This concept came into force on April 01, 2016. The bank has expressed its intention to offer Repo rate-linked lending rates (RLLR) on its Home Loans on Central Bank of India and other retail loans very soon. RBI (Reserve Bank of India) has strictly instructed all banks to link their lending rates to an external benchmark rate with effect from October 01, 2019. The bank will announce its plan of action in this regard soon.
The intention behind introducing the MCLR concept in April 2016 was to ensure that the customers get the benefit of the market-linked rates. The MCLR was the ideal step in the direction. However, banks were late in passing on the market rate effect to customers due to various internal factors. Secondly, the computation of MCLR is a complex process.
It consists of multiple factors, such as:
Compared to the MCLR, the RLLR is a direct reflection of the market rates. It comprises of three factors that make it easy for banks to pass on the market rate effect to its customers.
The critical aspects of RLLR are:
Central Bank of India will be introducing the RLLR concept soon by linking its Home Loan and other loans to it.
Central Bank of India uses the benchmark rate of one-year MCLR to link to its lending rates. These rates are floating rates of interest. Hence, with every change in the MCLR, the rate of interest applicable to the respective loan products will change. It can bring about a difference in the monthly EMI. Alternatively, the loan repayment tenure can increase/decrease by maintaining the EMI as constant.
|Home Loan Product||Rate of Interest||Effective rate|
|Cent Home Loan||One-year MCLR||8.25%|
|Cent Home Loan Double Plus (OD)||One-year MCLR||8.25%|
|Cent Home: 3rd or 4th House||One-year MCLR + 1%||9.25%|
|OD Top Up: Existing Home Loan borrowers||One-year MCLR + 1%||9.25%|
Central Bank of India has a pan-India presence. Hence, it is one of the leading banks offering Home Loans under the PMAY. The interest rates on offer on this product are the same as that for the regular Home Loan. However, the PMAY loans have an interest subsidy component. The scheme envisages the grant of an upfront interest subsidy that is credited to the loan account of the borrower. Therefore, the borrower has a reduced liability. The EMI changes accordingly.
Central Bank of India - PMAY Subsidy Table
|Category of Borrower||Annual Family Income Criteria||The eligible loan amount for subsidy calculation||Rate of interest subsidy||Maximum Subsidy amount|
|Economically Weaker Section - EWS||Up to 3 Lakhs||6 Lakhs||6.50%||2.67 Lakhs|
|Low Income Group - LIG||More than 3 Lakhs and up to 6 Lakhs||6 Lakhs||6.50%||2.67 Lakhs|
|Middle Income Group-I MIG-I||Above than 6 Lakhs and up to 12 Lakhs||9 Lakhs||4.00%||2.35 Lakhs|
|Middle Income Group-II MIG-II||More than 12 Lakhs and up to 18 Lakhs||12 Lakhs||3.00%||2.30 Lakhs|
Central Bank of India calculates Home Loan interest on the daily reducing balance method. It debits the interest amount on the last working day every month. The best mode of Home Loan repayment under such circumstances is the EMI method.
EMI stands for Equated Monthly Instalments and it comprises of two components, i.e., the interest and principal. Thus, regular repayment of the EMI not only ensures the servicing of the interest, but also reduces the principal amount accordingly. Therefore, you experience a decreased interest liability with every succeeding month. However, if the borrower fails to pay the EMI on time, the bank charges penal interest on the overdue amounts, thereby increasing the interest liability of the borrower.
Home Loans sanctioned to agriculturists based on agricultural income have a different method of treatment. The bank charges simple interest on all types of agricultural loans. Secondly, the mode of repayment depends on the harvesting pattern of the crops. Usually, it is on a quarterly, half-yearly, or annual basis. Under such circumstances, the bank stipulates repayment of interest and principal amount accordingly. Therefore, the EMI concept does not come into effect in such loans.
|Cent Agricultural Farm House Scheme - Interest Rates|
|Loan Amount||Rate of Interest||Effective rate|
|2 Lakhs to 5 Lakhs||One-year MCLR + 1%||9.25%|
|More than 5 Lakhs to 25 Lakhs||One-year MCLR + 1.50%||9.75%|
|Above 25 Lakhs||One-year MCLR + 2%||10.25%|
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Reserve Bank of India guidelines are clear, as it prohibits any bank or NBFC from charging a penalty on Home Loans availed by individuals on a floating rate basis. Hence, Central Bank of India does not charge any foreclosure penalty on individual Home Loans.
Central Bank of India does not have any Home Loan product that offers Home Loans on a fixed-rate basis today. All its Home Loans have links with the one-year MCLR of the bank. The present one-year MCLR of the bank is 8.25%.
Central Bank of India allows its customers to make a part prepayment in Home Loans without incurring any penalty. It is one of the best ways to save on your interest commitments.
PMAY loans come with an upfront subsidy that is credited to the loan account. The maximum amount of subsidy ranges between 2.30 Lakhs to 2.67 Lakhs. It depends on the classification of the borrower. On receipt of a subsidy, the principal loan amount reduces to the extent of subsidy. Therefore, there is a reduction in the EMI amount. This example will explain things better.
Assume the borrower to be in the Low Income Group Category. He/she has availed a loan of 6 Lakhs from Central Bank of India @8.30%. The maximum subsidy available in this account is 2.67 Lakhs. Therefore the principal loan amount reduces to 3.33 Lakhs. Accordingly, the EMI for 20 years will reduce from 5,131 to 2,848. Thus the borrower gets a benefit of 2,283 per month.
Yes, you can avail PMAY loan up to your maximum eligibility amount. However, the loan amount for calculation of subsidy has a specific ceiling. It is 6 Lakhs for EWS and LIG, 9 Lakhs for MIG-I and 12 Lakhs for MIG-II. Any loan above these amounts will classify as an unsubsidised loan.
This example could make it easy. Assume you belong to the MIG-II category and are eligible for a Home Loan of 25 Lakhs. The maximum amount of loan considered for subsidy is 12 Lakhs. Hence, the maximum available grant is restricted to 2.30 Lakhs. The loan amount over 12 Lakhs is an unsubsidised loan.
The PMAY website has a subsidy calculator. This calculator helps you to determine the available subsidy amount. Enter the necessary data such as Home Loan amount, rate of interest, and the loan repayment tenure.
As on date, the RLLR-linked loans seem to be a better option because the effective rate of interest comes below the one-year MCLR of the bank. Secondly, both the RLLR and MCLR depend on market rates. Hence, the fluctuations in the market rate affect these rates equally. Therefore, the RLLR should always be the ideal option, especially when it comes to floating rate of interest on loans.
The minimum rate of interest on a Central Bank of India Home Loan is the one-year MCLR. As this rate applies to all borrowers, women do not any unique benefits. Central Bank of India believes in providing benefits to all borrowers.
Central Bank of India has an internal credit rating structure. However, it does not affect the Home Loan interest rate in any way. It affects other commercial, industrial, and agricultural loans.
Central Bank of India does not have a tranche-based repayment system. However, there are no restrictions on paying any amount more than the prescribed EMI. Any excess payment does not attract any prepayment penalty.