Get home loan online from Jammu and Kashmir Bank for tenure of up to 30 years. J&K home loan interest rates start from as low as 6.95% p.a. A processing fee of 0.25% on the loan amount + applicable GST will be charged, whereas women applicants will get a 50% waiver in processing charges.
J&K Bank might not have many branches outside the state of Jammu & Kashmir, but they offer a bouquet of deposit and loan products. The bank works with a single-minded mission to enhance its customer base and improve its overall margins. One of the key products of J&K Bank is the Home Loan product.
J&K Home Loan caters to all the housing requirements of its customers, right from purchasing a plot to furnishing the home. The attractive and competitive rates of interest coupled with a transparent service charge pricing system make J&K Home Loan a popular product.
J&K Bank is an active lender under PMAY with HUDCO as its Chief Nodal Agency for claiming the interest subsidy.
Parameters | Details |
Purpose |
|
Eligibility |
|
Age |
|
Quantum | Depends on the requirement subject to eligibility and provision of margin |
Margin |
|
Holiday period |
|
Repayment |
|
Rate of interest | 1Y MCLR to 1Y MCLR + 0.35% |
Security | Mortgage of assets financed by bank |
J&K Bank offers a floating rate of interest on Home Loans. They do not have a fixed rate product for Home Loans under the MCLR structure. The MCLR structure is effective from April 01, 2016. The bank declares the MCLR every month as stipulated by the Reserve Bank of India. However, the resetting of the Home Loan interest rate with the MCLR is on an annual basis.
The MCLR of J&K Bank with effect from September 10, 2019, is as follows:
Tenor | MCLR w.e.f. 10.09.2019 |
Overnight MCLR | 7.85% |
One-month MCLR | 7.95% |
Three-months MCLR | 8.20% |
Six-months MCLR | 8.50% |
One-year MCLR | 8.70% |
Two-years MCLR | 9.15% |
Three-years MCLR | 9.20% |
The interest rate structure for the J&K Bank Home Loan is as hereunder:
Loan Amount slab | Rate of Interest | Effective rate of interest |
Up to 1 Crore | One-year MCLR | 8.70% |
Above 1 Crore <= 3 Crores | One-year MCLR + 0.20 | 8.90% |
Above 3 Crores | One-year MCLR + 0.35 | 8.95% |
J&K Bank is one of the prime lending members under PMAY. The bank links up with HUDCO as its CAN for claiming the subsidy. All PMAY borrowers are eligible for an upfront interest subsidy that depends on various factors.
Category of the Borrower
The borrower is categorised into four different classes depending on the annual family income from all sources. Family denotes husband, wife, and unmarried children.
Rate of Interest for Calculating the Subsidy
The subsidy is calculated using the NPV formula. The notional rate of interest is assumed at 9% irrespective of the contracted rate.
Loan Amount Eligible for the Grant
There is a difference between the loan eligibility of the borrower and the loan amount eligible for the interest subsidy. The loan eligibility depends on factors like income, repaying capacity, and cost of the project. The loan amount eligible for calculating subsidy is fixed for each category.
Amount of Subsidy
There is a restriction or ceiling on the maximum amount of subsidy available to a borrower:
J&K Bank calculates Home Loan interest on daily reducing balances. The preferable mode of repayment of J&K Bank Home Loan is EMI. Agriculturists having seasonal income can request for payment of quarterly instalments or make half-yearly payments depending on the harvesting period.
EMI Calculation
J&K Bank provides three different types of EMI Calculators on its webpage.
Besides these three EMI calculators, the site offers facilities for determining the Home Loan eligibility for salaried and self-employed individuals.
J&K Bank offers the facility of applying for Home Loans online:
MyMoneyMantra also offers you the facility to apply for J&K Bank Home Loan from their website. The advantages of using MyMoneyMantra to apply for J&K Bank Home Loans are as follows:
Processing Charges
Prepayment Penalty
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J&K Bank does not offer any fixed rate on Home Loans in the present MCLR interest rate structure. The bank used to offer the same in the preceding rate structure, the Base Rate regime.
J&K Bank announces its MCLR every month as all other banks do. However, it resets the Home Loan interest to link with the revised MCLR at yearly intervals.
The Home Loan interest rates link to the 1Y-MCLR of the bank. As the bank announces its revised MCLR every month, the loans sanctioned or reset during the month is linked to the latest MCLR. This rate remains the same for the particular loan for an entire year until its next annual reset. The loans sanctioned in the subsequent months link to the respective 1Y-MCLR announced at the start of the month.
If the MCLare different for each month, the corresponding Home Loan interest rates for the individual borrower will also be altered. The Home Loan borrower who availed the loan in August will have interest rates linked to the 1Y-MCLR announced in August. Similarly, the Home Loan borrower availing the loan in September will have links to the MCLR rates active from September. The rates remain same until the time of the next reset after one year.
Under circumstances where the MCLR reduces continuously, it is a loss to the customers as they do not get the benefit of the reduction until the date of reset. No one knows what the rate will be on the resetting date. If it remains the same or goes up, the customer is at a loss. However, if the MCLR rates increase gradually over the year, the customer benefits because of a lower rate, as well.
No, J&K Bank has not announced any retail loan product to link to the external benchmark rate such as the repo rates. Reserve Bank of India has granted time until October 01, 2019 to banks to switch over to the external benchmark-linked rate of interest.
The MCLR itself is a market-related rate. Banks announce their MCLR regularly every month but do not link it to their existing loans immediately. Every loan has an interest reset clause. The MCLR links to the Home Loan interest rate depending on the terms of the reset clause. It could be quarterly linking or even yearly linking as followed by J&K Bank. It causes substantial loss to the customer. Thus, RBI observed that banks were lagging in passing on the benefit to the customer. Hence, it came up with a directive to banks asking them to link their retail loan interest rates with an external benchmark rate.
J&K Bank customers do not have any problems because of the revocation of Article 370. However, the bank shareholding pattern will change. The erstwhile J&K State Government help around 60% of the bank's shares. With Jammu, Kashmir, and Ladakh becoming Union territories, the share capital gets transferred to the Centre. More news is awaited on the possible outcome of Article 370 on the bank's functioning.
Women borrowers do not get any benefit in the interest rate. However, women Home Loan borrowers get the advantage of a discount of 50% on the processing fees on their Home Loans.
Time alone will tell what can happen in the future. The change in the management structure of the bank could result in many new developments. One such event could be a change in the name as well.