|Khush Housing Finance Home Loan Interest Rates|
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About Khush Housing Finance
Khush Housing Finance Private Limited is registered with the National Housing Bank and authorised to provide housing finance to its customers. This housing finance company, having its base in Mumbai, caters to families having informal sources of income. Such families do not have access to the nationalised and commercial banks because of lack of proper income documentation. Khush Housing Finance caters to the needs of such people, especially in the middle-income and low-income groups. Khush Housing Finance concentrates on the urban, semi-urban, and the outskirts of metropolitan regions, as these areas usually do not have easy access to banks and housing companies.
Khush Housing Finance offers loans under the Pradhan Mantri Awas Yojana (PMAY) to fulfil the national objectives of providing shelter to every person by 2022.
Khush Housing Finance - Few Facts
|Target Group||Salaried persons and self-employed individuals|
Maximum loan amount
Up to 85% of the value of the project depending on the borrower's eligibility and repayment capacity.
Loan repayment tenures
Usually, Home Loans have a repayment tenure extending up to 10 years.
Rate of interest
Khush Housing Finance links its housing loan interest rates to the market rates. Hence, it fluctuates from time to time. Generally, the Home Loan interest rates start from 10.50%.
Features of Khush Housing Finance Home Loans
- Khush Housing Finance caters to the informal sector of society that does not have easy access to proper institutional home finance.
- Khush Housing Finance has able professionals in its ranks to deliver quick service at the customer's doorstep.
- Loans up to 25 Lakhs are available with Khush Housing Finance
- The rates of interest are linked to market rates. Therefore, the customer benefits from any downward fluctuation of the benchmark rates.
- Loans are available to cater to all types of housing requirements
- Khush Housing Finance caters to beneficiaries under the Pradhan Mantri Awas Yojana, as well
- At Khush Housing Finance, borrowers get flexible repayment options ranging up to 20 years
- Facilities to add up to four co-applicants are available. It can increase your overall eligibility
Khush Housing Finance - Types of Home Loans on Offer
Khush Housing Finance offers three types of Home Loans:
Purchase of New House
This loan product includes the procurement of a house from an individual seller or a builder. The loan amount depends on factors like income, repaying capacity, and the credit history of the borrower. The value of the property also plays a vital role in this process. Khush Housing Finance offers a maximum loan amount of 85% of the value of the property with a maximum of 25 Lakhs.
Renovation of Existing Home
Home renovations can cost you money. It might start with a small requirement but end up with a substantial budget. Khush Housing Finance realises this problem. Hence, they have a customer-friendly home renovation loan product. Customers can use this facility to carry out structural repairs like painting, waterproofing, electrical work, tiling, and so on. The loan amount depends on the requirement and the repaying capacity of the borrower. The maximum amount of loan for the home renovation is 10 Lakhs.
Loan for Constructing a House
People having a plot of land in their names can avail a Home Loan for construction from Khush Housing Finance. The maximum amount of loan available in this product is 25 Lakhs. However, the borrower must bring in a minimum of 15% as their contribution towards the project. Khush Housing Finance considers the value of the project, the estimated cost, and the repaying capacity of the borrower while dealing with such proposals.
Khush Housing Finance - Interest Rates
Khush Housing Finance is a housing finance company. Hence, it does not adhere to the Base Rate or MCLR or RLLR as stipulated by the RBI. Khush Housing Finance links its interest rate to its PLR. The PLR of Khush Housing Finance connects with the market rates. Hence, this company relates to an external benchmark rate. Thus, it ensures that the benefits pass on to the ultimate customer.
Factors Affecting Home Loan Interest Rates
- External benchmark rates: The housing loan interest rates are linked to an external benchmark rate to bring in an element of transparency. The benefits accruing from the downward swings in the market rates reach the ultimate customer on time.
- The occupation of the borrower: Salaried person has a stable source of income, whereas self-employed individuals have a variable income. Therefore, salaried persons have lower risk perception. Hence, they get the benefits of a better interest rate pricing.
- Credit rating of the borrower: The CIBIL rating of the borrower affects the rate of interest. A good or excellent score can result in a lower spread. Therefore, such borrowers could enjoy a comparatively better rate of interest.
The present-day Khush Housing Finance Home Loan interest rate starts from 10.50% onwards.
Khush Housing Finance - PMAY
Khush Housing Finance is a member lending institution under PMAY. This housing finance company promotes this flagship programme of the Central Government. Khush Housing Finance has signed an agreement pact/MOU with National Housing Bank for facilitating the Credit Linked Subsidy Scheme (CLSS) under PMAY. This programme envisages providing housing loans to needy people so that every Indian has a permanent shelter by the year 2022.
The salient features of the CLSS under PMAY are as follows:
Category of the Borrower
The borrowers fall into four categories depending on their annual family income:
- Economically Weaker Section: Annual family income <= 3 Lakhs
- Low-Income Group: Annual family income > 3 Lakhs and <= 6 Lakhs
- Middle-Income Group-I: Annual family income > 6 Lakhs and <= 12 Lakhs
- Middle Income Group-II: Annual family income > 12 Lakhs and <= 18 Lakhs
The subsidy allotment for each of the four categories is as listed below:
|Category of borrower||EWS/LIG||MIG-I||MIG-II|
Loan amount eligible for a subsidy
Rate of Subsidy
Maximum amount of grant
Rate of Interest Applicable to PMAY Loans
The rate of interest relevant to PMAY loans is not different. The rates that apply to regular Home Loans are valid for PMAY loans, as well. However, the upfront subsidy factor reduces the EMI payable on a PMAY Home Loan substantially.
Treatment of Subsidy
As listed above, all PMAY Home Loan accounts are eligible for a subsidy from the Government. This subsidy is an upfront grant that is credited to the loan account. Therefore, the EMI of the borrower reduces considerably.
Khush Housing Finance Home Loans - Calculation of EMI
The official website of Khush Housing Finance offers an EMI Calculator to determine the EMI amount payable on the Home Loan. Using this facility requires the borrower to provide the following information:
- Approved loan amount
- Contracted rate of interest
- Loan repayment tenure
Similarly, MyMoneyMantra has a calculator on the Financial Tools page of its website. The customer should enter the loan amount, the rate of interest, and repayment tenure to get the EMI instantly. This calculator provides a complete breakup of the interest portion and the principal portion throughout the mandate of the loan.
The EMI Concept
EMI constitutes Equated Monthly Instalments. The name suggests that the monthly instalments are distributed equally throughout the loan tenure. Paying the EMIs on time can help you to repay the loan properly.
The EMI comprises of an interest component and a principal repayment constituent. Both these figures keep on varying every month. In the initial stages, the interest component is more than the principal part. Over a period, things even out and the principal repayment constituent becomes more than the interest component. As on date, the EMI concept is the ideal method of repayment of any loan.
The EMIs commence on the day the final disbursement is over. Until that time, the borrower must pay the pre-EMI interest every month.
Khush Housing Finance - Interest Calculation Mode
Khush Housing Finance calculates Home Loan interest on the monthly reducing balance method. The method is a suitable repayment mode but has some inherent drawbacks. The customer does not get the benefit of interest on the EMI paid during the particular month. The advantage is available in the succeeding month. It is because Khush Housing Finance calculates the interest on the closing balance of the previous month.
Khush Housing Finance - Foreclosure of Home Loan
Reserve Bank of India circular is very clear as it prohibits any HFC from charging foreclosure penalty on floating rate of interest Home Loans. Thus, Khush Housing Finance does not charge any penalty from its customers on foreclosure of the Home Loan.
Khush Housing Finance - Frequently Asked Questions
How does Khush Housing Finance determine the eligibility of Home Loan?
Khush Housing Finance caters to all kinds of customers. Customers having a regular source of income and filing their IT returns do not have any issues at all. Calculating their eligibility becomes easy. However, Khush Housing Finance caters to customers having informal sources of income. Therefore, it relies on the statement of accounts and other means to derive at the income for determining Home Loan eligibility.
Does the informal source of income affect the rate of interest?
The informal sources of income suggest that the income is not a regular one. It can vary from month to the other. Thus, it affects the risk profile of the customer. Therefore, the rate of interest is higher for such customers in comparison to salaried persons.
What is the mode of repayment of Khush Housing Finance Home Loan?
Khush Housing Finance follows the tranche-based EMI approach as its repayment mode. This mode is useful in loan accounts where disbursement is in instalments. The EMI starts from the month following the month of the last disbursement. Until that time, the borrower services the interest charged to the account. It is also known as pre-EMI.
In the case of single disbursement loans, the mode of repayment is EMI. It starts one month after the disbursement date. Usually, Khush Housing Finance collects the EMI between the 5th and the 10th day of each month.
How can you pay the EMIs of Khush Housing Finance?
You can pay your EMIs in two ways. The first method is by submitting PDCs in advance. The second method is to set up an ECS mandate.
How does Khush Housing Finance charge interest on the Home Loan?
Khush Housing Finance charges interest on the monthly reducing balance method. It entails that the company charges interest on the balance outstanding on the last day of the previous month.
Is this method a beneficial one for the borrower?
When compared to the daily reducing balance method followed by commercial banks, this method is not beneficial to the borrower. The borrower does not get the credit for the instalment paid during the month. As Khush Housing Finance collects the EMIs before the 10th, the customers lose out on the interest portion for a minimum of 20 days every month.
Does Khush Housing Finance offer a floating rate of interest or a fixed rate of interest?
The rate of interest on Home Loans offered by Khush Housing Finance is a floating rate of interest. Therefore, the interest rate on the Home Loan will change with every increase or decrease in the PLR. The PLR depends on the market rates. Therefore, any change in the market rates affects the rate of interest on the Home Loan.
Under such circumstances, will it affect the EMI of the borrower?
Any change in the rate of interest affects the EMI. However, Khush Housing Finance opts to maintain the EMI constant by changing the loan repayment tenure accordingly.
Is it beneficial for the borrower to increase or decrease the loan repayment tenure?
In the case of a rate cut, the loan repayment tenure will decrease. It is beneficial to the customers under such circumstances. However, if the rate rises, the mandate will increase. The borrower will now have to repay the loan over a longer tenure. Hence, it is not beneficial to the borrower.
Can the borrower choose to keep the tenure constant and alter the EMI amount in the case of an upward swing in the rates?
Yes, the borrower can choose to change the EMI amount while keeping the tenure constant. It is a part of the terms and conditions of the loan agreement. The borrower should give consent at the time of executing the loan agreement.