|Cosmos Bank Home Loan Interest Rates|
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|Lowest EMI Per Lakh||
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Nil charges for floating rates loans
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About Cosmos Bank
Cosmos Bank is a multi-state cooperative bank having a presence in seven states and 39 cities in India. It is the second oldest cooperative bank in India. Established in 1906, the bank is completing 113 years of its existence in India. Having its headquarters in Pune, Cosmos Cooperative Bank Ltd was established to provide banking facilities to farmers. Moneylending activities were at their worst in Maharashtra in those times. Cosmos Cooperative Bank Ltd was the brainchild of Krishnaji Sadashiv Gore and Shankar Hari Barve.
Cosmos Bank became a scheduled bank in 1990 and within seven years became a multi-state cooperative bank. Today it has 140 branches, a majority of which are in Maharashtra. It has several distinctions to its credit. Cosmos Bank was the first cooperative bank to operate a currency chest.
All its 140 branches are under the CBS platform today. It is a professionally managed institution committed to serving the interest of its customers.
Cosmos Bank Home Loan
Cosmos Bank caters to the retail and business sector. It offers an array of retail loans that include education loan, housing loan, vehicle loans, and personal loans. One of the most popular retail loan products is the Home Loan. It offers two types of Home Loans, the regular Home Loan and the Home Loan top-up facility.
Cosmos Bank Home Loan Scheme
The features of the regular Home Loan product are as follows:
- Quick processing and transparent charges
- Competitive and reasonable interest rate
- Women get an exclusive benefit of concessions in the rate of interest
- Takeover of loan from other banks available
Cosmos Bank Home Loan details are as follows:
- Maximum loan limit: 70 Lakhs
- Purpose of the loan: Purchase of houses/flats and construction of homes
- Maximum tenure: 20 years
- Processing fees: 1% for loan amount up to 10 Lakhs and 0.50% for loan amount above 10 Lakhs.
- No prepayment or foreclosure charges
- Interest calculation on daily reducing balance basis
Cosmos Bank Home Loan Interest Rate
Cosmos Bank is a cooperative bank. Hence, it does not have the MCLR or the RLLR structure. It has its PLR that the bank keeps on updating frequently. The PLR of Cosmos Bank is linked to market rates. Hence, every change in the market rates affects the PLR. Accordingly, it affects the overall interest rate on Home Loans, as well.
The rates of interest on Cosmos Bank Home Loans are:
- Cosmos Bank Home Loan
- Women borrowers: 8.60%
- Other borrowers: 8.65%
- Cosmo Home Delight Scheme: 10%
Cosmos Bank Home Loan - PMAY
Cosmos Bank has a sizeable presence in Maharashtra, especially around Pune. Hence, it is a prominent lending institution under PMAY. Cosmos Bank caters to PMAY loans with its Central Nodal Agency being HUDCO.
Besides ensuring affordable housing finance to the urban homeless, the PMAY has the benefit of an upfront interest subsidy. The subsidy amount depends on various factors like the borrower category, loan amount, and the rate of subsidy. The interest subsidy helps to reduce the EMI burden on the borrower, as well.
PMAY - Income Eligibility
PMAY borrowers come in four different categories depending on the annual family income:
- Economically Weaker Section (EWS): Families having a total annual income less than 3 Lakhs fall in this category.
- Low-Income Group (LIG): This group constitutes families having an annual income higher than 3 Lakhs and up to 6 Lakhs.
- Middle-Income Group-I (MIG-I): MIG-I comprises of the families or households having income levels more than 6 Lakhs but less than or equal to 12 Lakhs.
- Middle-Income Group-II (MIG-II): This category is made up of the creamy layer of the middle-class people with annual family income more than 12 Lakhs and up to 18 Lakhs.
The loan amount under PMAY does not have any restriction. Borrowers can borrow up to their maximum eligibility depending on their income and other liabilities. However, the entire loan amount is not eligible for interest subsidy. There is a limit on the loan amount that is eligible for an allowance from the Government. The loan amount above the respective ceilings qualifies as unsubsidised loan.
- EWS and LIG: The maximum loan amount eligible for calculating the interest subsidy is 6 Lakhs.
- MIG-I and MIG-II: The corresponding figures for MIG-I and MIG-II are 9 Lakhs and 12 Lakhs respectively.
PMAY Subsidy Calculation
Borrowers can visit the PMAU-Urban website and use the PMAY subsidy calculator to determine the subsidy amount. As detailed above, the entire loan amount is not eligible for the interest subsidy. It works in the following manner.
|Category of Borrower||Loan amount eligible for a subsidy||Rate of subsidy||Maximum amount of grant|
EWS and LIG
PMAY Subsidy Treatment
The CAN for Cosmos Bank is HUDCO. Hence, Cosmos Bank has to lodge its subsidy claims with HUDCO. On receiving the same, the bank credits the interest subsidy amount upfront into the loan account. Thus, it reduces the principal liability of the borrower. The borrower, therefore, has a lower EMI to contend with for the rest of the loan repayment tenure.
Cosmos Bank Home Loan - How Do You Apply?
Cosmos Bank official website has a loan inquiry form. The applicant can submit it online. The applicant has to enter their name, email ID, and phone number. The bank executives will contact the prospective borrower to obtain further details.
Alternatively, the customer can also apply for the Cosmos Bank Home Loan through MyMoneyMantra. The procedure is straightforward.
- Access the MyMoneyMantra website
- Select the Home Loan page
- Submit the details that the site asks for
- Finally, you have to share your mobile number and email ID
- You receive an OTP on your mobile
- Enter the OTP to confirm the genuineness of the query
- You get access to the different Home Loans available on offer
- On choosing Cosmos Bank, it directs you to the official website of Cosmos Bank to complete the formalities.
Advantages of Using MyMoneyMantra
- We provide you with an array of Home Loan options
- You can choose the right one after comparing various offers
- Our loan executives are available to guide you through the entire process
- We help you with the documentation part to ensure against any rejections due to shortcomings in the documents.
Cosmos Bank Home Loan EMI Calculation
Cosmos Bank does not have an EMI Calculator on its website. However, customers can use the MyMoneyMantra EMI Calculator to determine the EMI amount.
- Access MyMoneyMantra website
- Go to Financial Tools and select EMI Calculator
- Enter the details like loan amount, rate of interest, and the repayment period
- Click on the 'Calculate' option to get your EMI
- You get additional information in the form of a breakup of principal and interest components over the entire tenure of the Home Loan.
The calculation of EMI for the PMAY is different. Instead of the loan amount, you must enter the loan amount less subsidy. You get the correct EMI payable on the PMAY loan account.
Cosmos Bank Home Loan - Interest Calculation
Cosmos Bank calculates the Home Loan interest on the daily reducing balance method. It is the most appropriate method of calculating interest. The borrower gets the benefit of making regular repayments.
Cosmos Bank Home Loan - Frequently Asked Questions
How does Cosmos Bank calculate my Home Loan interest rate?
Cosmos Bank does not follow the MCLR or the RLLR structure to calculate the Home Loan interest rate. It follows the PLR system. The bank links its PLR to the market rate and passes on the benefits of the market rate fluctuations to the customers. Cosmos Bank reviews the PLR at regular intervals.
Does Cosmos Bank offer a fixed rate of interest or floating rate of interest on its Home Loans?
Cosmos Bank offers both fixed-rate and floating rate of interest on its Home Loans. Customers can choose their favoured mode.
Among the fixed-rate and floating rates, which is the better one?
It depends on various factors. Both these rates have their advantages and disadvantages.
The borrower should study the pros and cons before deciding on the appropriate option. Note that the fixed rate of interest is usually more than the floating rate on the date of its selection. Many borrowers prefer to opt for the floating rates because it is considerably lower than that of the fixed rates.
What are the advantages and disadvantages of a fixed rate of interest on a Home Loan?
The advantages of a fixed rate of interest are as follows:
- The EMI remains fixed throughout the tenure
- The borrower can plan his/her budget because the EMI does not vary
- It is beneficial when the market rates show an upward swing
The disadvantages of a fixed rate of interest:
- The fixed-rate is usually much higher than the floating rate at the time of its fixation
- The floating rates do not generally fluctuate much to cross the fixed rate of interest. However, no one can rule it out.
- The borrower has to pay a foreclosure penalty when he/she decides to foreclose the loan account.
What are the advantages and disadvantages of a floating rate of interest account?
The advantages of a floating rate of interest:
- The floating rates are comparatively lower than the fixed rate. Hence, the borrower ends up with a lower EMI.
- The floating rates link to the market rate. Hence, the borrower benefits in case the market rates go down or remain stable.
- The market rates have to fluctuate high enough for the floating rate of interest to cross the fixed rate.
- The borrower does not incur any foreclosure charges on the Home Loan if he/she avails the floating rate of interest.
The disadvantages of floating rates:
- The EMI does not remain constant throughout the tenure. The rates can move up or down. Hence, EMI moves accordingly. It can become a challenge to set a budget with a fluctuating EMI.
How do the banks treat the EMI when there is a change in the interest rate structure?
Typically, the EMI should change whenever there is a fluctuation in the rate of interest. However, a change in the EMI can affect the budget of the borrowers. Hence, banks prefer to maintain the EMI as constant and alter the loan repayment tenure. Therefore, the tenure increases if the rates go up and vice versa.
How does Cosmos Bank approach the fixed-rate scenario?
Cosmos Bank offers a unique type of fixed rate of interest. It inserts an interest rate resetting clause in the loan agreement. According to this clause, the fixed rate of interest is subject to review and reset every three years. It helps to protect the bank's interest if the market rates start moving up continuously.
How does Cosmos Bank charge foreclosure penalty on Home Loans?
If a customer opts for a floating rate of interest on Home Loans, there is no foreclosure penalty at all. If the Home Loan has a fixed rate of interest with a three-year resetting option, the foreclosure penalty is 1% of the foreclosure amount. This penalty applies only if the borrower forecloses the loan within three years. After three years, there is no foreclosure penalty on these loans, as well.
How do I repay the Home Loan with Cosmos Bank?
If you have a Cosmos Bank account, you can set up an SI mandate to recover the instalment on the due date. If you do not have an account with Cosmos Bank, you should set up an ECS mandate with the bank to ensure prompt repayment without any delay.
Is Cosmos Bank a safe bank to apply for a Home Loan?
Cosmos Bank is in existence for more than 113 years. There should not be a better reason for you to trust this bank for your Home Loan requirements.