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About Karur Vysya Bank

Karur Vysya Bank has an illustrious history of more than 100 years. Established in 1916 in Karur by two enterprising business personalities, M A Venkatarama Chettiar and Athi Krishna Chettiar, the bank has made rapid strides today. It has 778 branches and 1639 ATMs situated in almost all the big cities and towns in India. A predominantly Tamil Nadu-based bank, Karur Vysya has a dominating presence in the interior districts of the state.

Karur Vysya Bank offers a variety of customer friendly services like 'Any Branch Banking' and 'Multi-city account facilities.' The bank is a forerunner in deploying ATMs and Bunch Note Recycler machines in India. All its branch offices are under CBS. The bank has one of the most user-friendly mobile banking apps in the banking industry.

About Karur Vysya Bank Home Loan

Karur Vysya offers a gamut of services to its customers. Apart from business banking, Karur Vysya Bank has a reputation for financing the agricultural sector. It has many branches situated in the rural belt of Tamil Nadu. Besides, Karur Vysya Bank has an excellent retail banking profile comprising of Home Loans, education loans, gold loans, and personal loans. Karur Vysya Bank Home Loan is a popular product, as it caters to every requirement in the housing sector. The best aspect of Karur Vysya Bank Home Loan is that the customer gets an in-principle sanction in 15 minutes.

Karur Vysya Bank Home Loan - Features and Benefits

  • In-principle approval in 15 minutes subject to satisfying CIBIL scores and internal ratings
  • Extended repayment tenures up to 25 years
  • The maximum moratorium period extending up to 24 months
  • No prepayment or foreclosure charges
  • All resident individuals can apply for Home Loans
  • Non-resident Indians can apply under the KVB-Gruhapravesh Scheme
  • Home Loans available for all purposes such as construction, purchase, repairs, renovations, and purchase of plots.
  • Balance takeover facilities available
  • No maximum limit
  • Attractive interest rates

Karur Vysya Bank Home Loan Interest Rates

Karur Vysya Bank follows the MCLR interest structure for its Home Loans. MCLR concept is active in all banks with effect from April 01, 2016. Many banks have switched to an external benchmark rate by announcing retail loan products linked to RLLR. However, Karur Vysya Bank has not announced anything in this regard.

Karur Vysya Bank has announced its MCLR with effect from September 07, 2019. The MCLR of Karur Vysya Bank for various tenures is as hereunder.

Tenor Overnight 1M-MCLR 3M-MCLR 6M-MCLR 1Y-MCLR

MCLR

8.35%

8.35%

8.60%

9.15%

9.45%

  • The rates mentioned above will apply to new loans sanctioned on or after September 07, 2019
  • It will also apply to the existing MCLR-linked Home Loans where reset facility is available

The interest rates applicable to Karur Vysya Bank Home Loans are as follows:

Home Loan Products Minimum Maximum

KVB Smart Home Loan

8.80%

-

Housing Loan

9.55%

11.55%

KVB Gruhapravesh

9.55%

11.55%

Housing Loan under CRE

9.90%

12.40%

Karur Vysya Bank Home Loan Interest Rates - Points to Note

  • Karur Vysya Bank links its MCLR to the housing loan rates. The MCLR is a floating rate. Hence, the housing loan interest rate fluctuates with every change in the MCLR, depending on the reset frequency.
  • The Home Loan interest rates vary from 8.80% to 11.55%
  • Various factors decide the Home Loan spread, such as:
  • Type of borrower and occupation. Salaried borrowers get an advantage over the self-employed individuals.
  • The credit rating of the borrowers has a critical effect on the interest rate
  • KVB Smart Home Loans have the lowest interest rate
  • The Home Loan interest rates for NRI borrowers are the same as that of resident borrowers
  • The Home Loan for a third house comes under Commercial Real Estate. The rate of interest for CRE loans is higher than that of the regular Home Loan.

Karur Vysya Bank Home Loan Interest Rate Calculation

Karur Vysya Bank adopts the daily reducing balance method for calculating Home Loan interest. The ideal mode of repayment is EMI. Agriculturists have the option to repay the Home Loan in EQI (equated quarterly instalments) or EHYI (equated half-yearly instalments). It is because farmers do not have a regular monthly income. Their income coincides with the harvesting season.

The EMI Concept

EMI is the best concept for repaying Home Loans. EMI comprises of two constituents, the interest repayment part and the principal repayment component. Both of these components are variable. In the initial stages of Home Loan repayment, the interest component is higher than the principal repayment constituent. However, as you keep repaying your instalments on time, the principal repayment portion keeps on increasing. 

Karur Vysya Bank Home Loan - Repayment of EMIs

Karur Vysya Bank customers have the following repayment options:

  • Post-dated cheques
  • Standing instruction to debit savings/current account
  • Internet/mobile banking transfer
  • Cash at Karur Vysya Bank branch

Other bank customers can repay the Home Loan through the following ways:

  • Submit PDCs
  • Register for an ECS mandate
  • Use internet banking to remit funds through NEFT/RTGS/IMPS
  • Pay cash at Karur Vysya Bank branch

How Do You Apply for Karur Vysya Bank Home Loan?

Online Application

  • Karur Vysya Bank enables customers to apply for their Home Loans online
  • The online application form requires the applicants to submit their contact details
  • Karur Vysya Bank officials will contact you to complete the formalities

Apply at the branch

  • Visit any branch of Karur Vysya Bank and apply for a Home Loan

Through MyMoneyMantra

  • Access MyMoneyMantra website
  • Select Home Loans
  • Provide the information asked for
  • Submit your mobile number and email ID
  • MyMoneyMantra sends you an OTP on your phone
  • Enter the OTP to confirm the application
  • Access various Home Loan options on a single screen
  • Choose your loan provider as Karur Vysya Bank
  • Continue with your loan application

MyMoneyMantra Home Loan executives will help you with completing the necessary formalities.

How to Calculate the Karur Vysya Bank Home Loan EMI?

Use the EMI Calculator provided on the Karur Vysya Bank website to determine your Home Loan EMI.

Submit the following information to get your EMI:

  • Loan amount
  • Rate of interest
  • Loan repayment tenure

MyMoneyMantra has a similar EMI Calculator to help customers to know their EMI.

Karur Vysya Bank Home Loan - PMAY Home Loan

Karur Vysya Bank has a domineering presence in the state of Tamil Nadu. The bank is an active player in PMAY. The rates of interest on PMAY Home Loans are the same as that of regular Home Loans. The upfront interest subsidy is the only distinguishing factor. The upfront subsidy reduces the EMI considerably. The details of the PMAY scheme are as follows:

Borrower category Economically Weaker Section EWS Low-Income Group LIG Middle-Income Group-I MIG-I Middle-Income Group-II MIG-II

Annual family income ceiling

3 Lakhs

6 Lakhs

12 Lakhs

18 Lakhs

Amount eligible for a subsidy

6 Lakhs

6 Lakhs

9 Lakhs

12 Lakhs

Rate of subsidy

6.5%

6.5%

4%

3%

Maximum subsidy

2.67 Lakhs

2.67 Lakhs

2.35 Lakhs

2.30 Lakhs

Karur Vysya Bank PMAY Home Loan - Points to Note

  • The PMAY subsidy is an upfront interest subsidy
  • The subsidy amount depends on the following factors:
    • The eligibility of the borrower
    • The loan amount eligible for a subsidy has a restriction
    • The subsidy amount has a ceiling as well
  • The crediting of the interest subsidy affects the EMI

Karur Vysya Bank Home Loan - Service Charges

Loan Amount Slab Processing Fees

Up to 25 Lakhs

2,500

25 Lakhs <= 50 Lakhs

5,000

Above 50 Lakhs

7,500

Karur Vysya Bank Home Loan Interest - Tax Concessions

Income tax concessions are available on Karur Vysya Home Loan repayments. The Income Tax Act allows tax rebate on interest as well as principal amount repayment.

Interest Repayment: Sec 24 of the IT Act provides concession of 2 Lakhs per borrower per annum on interest repayment of Home Loan.

Principal Amount Repayment: Sec 80C of the IT Act offers a rebate in income tax for the repayment of the principal portion of Home Loan up to 1.50 Lakhs.

Karur Vysya Bank Home Loan Interest Rates - Frequently Asked Questions

Does Karur Vysya Bank offer Home Loans on a fixed interest rate basis?

No, as on date, Karur Vysya Bank offers Home Loans on a floating rate of interest basis. It does not offer a fixed rate of interest Home Loans under the MCLR concept. 

Does Karur Vysya Bank offer retail loan products that link to an external benchmark rate?

No, Karur Vysya Bank has not announced any retail loan products that link to an external benchmark rate. Reserve Bank has urged all commercial banks to link their retail loans to an external benchmark rate before October 01, 2019.

What type of external benchmark has the Reserve Bank of India recommended for banks to adopt?

Reserve Bank of India has recommended the following external benchmark rates for banks to follow:

  • Repo rate: Reserve Bank announces these rates from time to time. The repo rate is the specific rate at which the RBI lends to banks on a short-term basis.
  • 3-month or 6-month T-Bill rate: The T-bill rates are announced by Financial Benchmarks Limited (FBIL) daily.
  • Any other benchmark rate published by FBIL

Which of the rates mentioned above are the most convenient for banks to adapt to?

The T-bill rates can be volatile. Hence, it can affect the overall Asset-Liability position of Indian commercial banks. The repo rate is the ideal one as the Reserve Bank announces these rates regularly. The recent announcement saw a reduction in the repo rates from 5.75% to 5.40%.

Does Karur Vysya Bank charge any foreclosure and prepayment charges?

As per RBI guidelines, banks should not charge foreclosure and prepayment charges on floating rate of interest Home Loans. Hence, Karur Vysya Bank does not charge any foreclosure or prepayment charges. It does not have a fixed rate Home Loan option today.

Does the Home Loan interest rate vary immediately with any change in the MCLR?

No, the Home Loan rates link to the MCLR, but they do not change with every change in the MCLR. The MCLR concept has an interest reset clause embedded in each Home Loan product. The Home Loan interest rate varies only on resetting it. The banks decide on a specific frequency for resetting the Home Loan interest rate.

Does my EMI change with the resetting of my Home Loan interest rate?

Ideally, the EMI should change with an increase or reduction in the MCLR. However, Karur Vysya Bank prefers to alter the loan tenure by either increasing or reducing it accordingly. It does affect the overall payment position of the borrower. The borrower can exercise their request to alter the EMI and maintain the tenure as constant.

How does the PMAY upfront subsidy affect the EMI?

Every PMAY loan is eligible for a subsidy. The subsidy amount depends on the category of the borrower and the loan amount.

The bank claims the grant from the Central Nodal Agency. On receiving the subsidy, the bank credits the same to the loan account of the borrower. The crediting of the upfront subsidy reduces the principal liability of the borrower. Therefore, the EMI changes accordingly.

As a PMAY borrower, can I apply for a higher amount if I am otherwise eligible for it?

Yes, there is no limit up to which you can borrow if you are eligible otherwise. However, the loan amount is restricted as far as the calculation of subsidy is concerned. The loan amount above this ceiling is an unsubsidised loan.

Which loans classify as Housing Loans under CRE in Karur Vysya Bank?

Home Loans to acquire third and fourth houses qualify as Home Loans under CRE. These loans have a higher rate of interest as compared to conventional housing loans.

Karur Vysya Bank Home Loan Interest Rates - Latest News Snippets

Karur Vysya Bank announces its Home Loan interest rates

Karur Vysya Bank announces its Home Loan interest rates with effect from September 07, 2019. The Home Loan interest rates range from 8.8% to 11.55% depending on the amount of the Home Loan.

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