|Sundaram BNP Paribas Home Finance Home Loan Interest Rates|
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About Sundaram BNP Paribas Home Finance
Sundaram BNP Paribas Home Finance Limited is a joint venture between Sundaram Home Finance Limited and BNP Paribas Personal Finance. Established on November 28, 2007, Sundaram BNP Paribas Home Finance Limited specialises in financing housing loans to cater to all the requirements of its clients. The parent company, Sundaram Home Finance Limited, a subsidiary of Sundaram Finance Limited, was incorporated on July 2, 1999. This company is registered with the National Housing Bank, the regulatory body for non-banking home financing companies in India, under the NHB Act 1987. Sundaram BNP Paribas Home Finance Limited has a network of 116 branches all over India through which it provides Home Loans.
Sundaram BNP Paribas Home Finance Limited Home Loan
Sundaram BNP Paribas Home Finance Limited provides Home Loans and loans against property to both the formal and informal sectors. There are Home Loan products for purchasing and constructing homes. Plot loans are also available. Sundaram BNP Paribas Home Finance also offers Home Loan top-up facilities. Besides, there is a separate product for a loan against property. The notable features of Sundaram BNP Paribas Home Finance are quick turnaround time, transparency in dealings, and a competitive interest rate.
Sundaram BNP Paribas Home Finance Limited Home Loan Interest
Sundaram BNP Paribas Home Finance Limited is a non-banking housing finance company. Hence, the rules imposed by the Reserve Bank of India (RBI), such as MCLR and RLLR, do not apply directly. However, Sundaram BNP Paribas Home Finance Limited has its Prime Lending Rate, SH-PLR. The SH-PLR is a market rate-linked interest rate that moves up and down accordingly. Sundaram BNP Paribas Home Finance Limited uses the SH-PLR as its base for deciding on the Home Loan interest rate. The interest structure is usually at a discount on the SH-PLR such as SH-PLR-7%, SH-PLR- 7.5%, and so on.
Factors Affecting the Home Loan interest rate
Sundaram BNP Paribas Home Finance Limited interest rate depends on various factors:
- SH-PLR: Sundaram BNP Paribas Home Finance Limited announces its SH-PLR at regular intervals. This benchmark rate is a market-related rate that fluctuates up and down along with other market rates. The rates that influence the movement of SH-PLR include the repo rate announced by RBI. It also considers the Treasury-Bill rates as an indicative factor.
- Customer's profile: The individual Home Loan interest rate depends mainly on the customer's profile. The occupation of the customer is a crucial element. One of the vital characteristics that decide the interest rate spread in this section is the continuity of income. A salaried person is always considered a safe bet because of the continuity of income. At the same time, a self-employed individual might have a higher level of income, but the nature of income is always considered as temporary or fluctuating. Many factors go into determining the income of a self-employed individual.
- Customer's age: The age of the borrower is also a critical factor that decides the loan interest rate and tenure. The older you are, the smaller will be the loan tenure. You could also end up with a higher EMI.
- Loan type: Sundaram BNP Paribas offers Home Loans and non-housing loans such as loan against property. The loan type determines the interest spread. Housing finance is priority sector finance in the Indian financial market. Hence, the rate of interest on a housing loan is always less than that of a loan against property. The loan against property is seen more like a secured personal loan.
- Loan amount: The Home Loan amount is also one of the deciding factors for the Home Loan interest. Every housing finance company sets a specific limit, say 30 Lakhs or 50 Lakhs over which the rate of interest is higher.
- Credit score of the borrower: After the market rate, the credit score of the borrower has the maximum impact on the individual Home Loan interest rate. There are many credit rating agencies, such as CIBIL, Experian, and so on. Usually, banks and other financial institutions look up to CIBIL to provide the credit rating. The credit score of a borrower depends on several factors such as repayment history, age of credit, credit utilisation ratio, number of loan accounts, and number of loan enquiries. The better the credit score, the lower is the rate of interest on the Home Loan.
Sundaram BNP Paribas Home Finance Limited - Prime Lending Rate
The Prime Lending Rate of Sundaram BNP Paribas Home Finance Limited as on August 12, 2019, is 15.55%
Sundaram BNP Paribas Home Finance Limited - Interest Rate on Home Loans
|Type of Loan||Rate of interest|
Housing Loan for Salaried persons
Housing Laon for Self-employed individuals
Non- Housing purposes
Sundaram BNP Paribas Home Finance Home Loan Interest Rates - Points to Note
- The rate of interest on housing loans is linked with the SH-PLR. Any change in the SH-PLR affects the Home Loan interest rates accordingly.
- The individual Home Loan interest rate for salaried employees starts from 8.60% onwards. At the same time, the starting rate for self-employed individuals in 9.50%. The difference is because of the reliable nature of income in the case of a salaried person. A self-employed person can have a higher income, but the nature of income is not stable. Secondly, a salaried person has access to social benefits like Provident Fund, Gratuity, and maybe a pension, as well. All these factors weigh in when deciding the individual Home Loan interest.
- The rate of interest on non-housing loans like Loan against Property starts from as high as 14.25%.
- The credit rating of the borrower decides the spread over the base rate in each case
- Similarly, the loan amount is also a deciding factor in determining the spread
- PMAY borrowers have the same interest rate structure depending on whether they belong to the salaried class or self-employed category.
- Home Loan borrowers under the NHB Affordable Housing Fund Scheme follow the same interest rate structure. However, the rate of interest is a fixed interest rate for seven years that subsequently changes over to a floating rate.
Sundaram BNP Paribas Home Finance Limited - PMAY
Sundaram BNP Paribas Home Finance Limited has a significant influence and presence in Tamil Nadu. This company is a member lending institution under PMAY. The rate of interest on PMAY loans has the same structure as the regular Home Loans. However, there is an element of upfront subsidy that distinguishes these loans from the others.
The upfront subsidy depends on various factors:
- Category of the borrower: There are four categories for classifying a PMAY borrower. The annual family income of the borrower is the deciding factor in this aspect.
- Economically Weaker Section: This category includes all families having an aggregate annual income up to 3 Lakhs.
- Low Income Group: Families having annual income above 3 Lakhs and up to 6 Lakhs fall in this category.
- Middle Income Group-I: This category comprises of those families having annual income more than 6 Lakhs but up to 12 Lakhs.
- Middle Income Group-II: This group constitutes families with annual income more than 12 Lakhs and up to 18 Lakhs.
- Loan amount eligible for subsidy: There is no ceiling on the loan eligibility of the borrower, but there is a cap on the loan amount eligible for calculating PMAY subsidy.
- EWS and LIG: 6 Lakhs
- MIG-I: 9 Lakhs
- MIG-II: 12 Lakhs
- Rate of subsidy: The entire interest portion is not available for subsidy. The rate of subsidy depends on the category you belong to.
- EWS and LIG: 6.50%
- MIG-I: 4%
- MIG-II: 3%
- Subsidy amount: The subsidy amount has a ceiling as well.
- EWS and LIG: 2.67 Lakhs
- MIG-I: 2.35 Lakhs
- MIG-II: 2.30 Lakhs
Calculation of PMAY Subsidy
PMAY subsidy calculation is a complicated process. It involves arriving at the 'Net Present Value' of the interest for 20 years @ 9%. The best way to determine your PMAY subsidy is to visit the PMAY official website and use the PMAY subsidy calculator.
Effect of PMAY Subsidy
The PMAY subsidy is an upfront subsidy. Thus, it entails that the borrower gets immediate credit to his/her loan account. The upfront credit into the account reduces the principal loan liability of the borrower. Therefore, the borrower pays a lower EMI.
Sundaram BNP Paribas Home Finance Limited - EMI Calculation
Sundaram BNP Paribas Home Finance has an EMI Calculator on its official web page. This calculator helps to determine your EMI amount on the Home Loan.
Borrowers must enter the following data:
- Loan amount
- Rate of interest
- Loan tenure
Similarly, borrowers can use the calculator provided on the MyMoneyMantra website to confirm their EMI. The procedure is the same as described above.
While determining the EMI amount on a PMAY loan, borrowers must reduce the loan amount by the subsidy available in the account.
Sundaram BNP Paribas Home Finance Limited - Interest Calculation Method
Sundaram BNP Paribas Home Finance Limited charges interest on a monthly reducing balance basis.
Sundaram BNP Paribas Home Finance Limited - FAQs
Does Sundaram BNP Paribas Home Finance Limited offer a fixed rate of interest on Home Loan?
Generally, the rate of interest on Home Loans offered by Sundaram BNP Paribas Home Finance Limited is a floating rate of interest. However, the fixed rate of interest on Home Loans is also available for borrowers who wish to avail them. The fixed rate of interest on the Home Loan is usually higher than the corresponding floating rate of interest.
Does Sundaram BNP Paribas Home Finance have a specific Home Loan product with a fixed rate of interest?
Yes, Sundaram BNP Paribas Home Finance offers Home Loans under the affordable National Housing Bank Affordable Housing Fund Scheme. This loan product offers a fixed rate of interest for seven years. After the expiry of this period, the product shifts to a floating rate of interest.
How is the PMAY loan beneficial to the borrower?
PMAY loans feature an upfront interest subsidy. The subsidy amount is credited to the Home Loan account immediately on receipt of the same. Therefore, the borrower ends up paying less interest overall. The EMI also reduces considerably.
Will the individual Home Loan interest rate change with a change in the SH-PLR?
Sundaram BNP Paribas Home Finance Limited has a floating rate of interest product linked to its SH-PLR. This Prime Lending Rate relates to market-related rates. Therefore, every increase or decrease in market rates affects SH-PLR. Accordingly, your Home Loan interest rate also changes.
How does it affect your EMI?
A change in the Home Loan interest rate should ideally affect your EMI. It should move up or down with every corresponding alteration in the Home Loan interest rate.
How does Sundaram BNP Paribas Home Finance Limited treat the EMI with every upward change in the interest rate structure?
Sundaram BNP Paribas Home Finance Limited prefers to keep the EMI constant while altering the Home Loan tenure. If circumstances are such that it does not permit any extension of the loan tenure, the company resorts to changing the EMI.
As a borrower, can I request to change the EMI while maintaining the tenure constant?
Sundaram BNP Paribas Home Finance Limited permits borrowers to exercise the option of changing the EMI with every change in the interest rate structure. However, you must express your intention in writing. It is not available as a matter of right.
Can I make part-payment or foreclose my Home Loan with Sundaram BNP Paribas Home Finance Limited?
Foreclosing a Home Loan should not be an issue because Sundaram BNP Paribas Home Finance does not charge any foreclosure penalty. Customers can also make part-payment. A maximum of three part-payments is allowed in a financial year. The part-payment amount in each case should not be less than six times your EMI amount.
Is the monthly reducing balance basis a better mode of interest calculation than the daily reducing balance method?
No, the daily reducing balance method is the better method. In the case of the monthly reducing balance mode, the company calculates interest on the balance outstanding on the last day of the previous month. It does not give the benefit to the borrower if he/she pays the EMI during the month. Thus, you end up paying a higher amount throughout the loan tenure.
Do I get benefits in IT on my Sundaram BNP Paribas Home Finance Limited Home Loan?
Yes, benefits under the IT Act are available for interest and principal repayments of the loan availed from Sundaram BNP Paribas Home Finance Limited.
Sundaram BNP Paribas Home Finance Limited - Latest News and Snippets
Sundaram BNP Paribas Home Finance Limited cuts its Home Loan interest rates by 10 points
Going by the current trend in the market, Sundaram BNP Paribas Home Finance Limited cut its Home Loan interest rates by ten basis points. This interest rate cut coincides with Reserve Bank of India reducing its repo rate. Thus, Sundaram BNP Paribas Home Finance passes the benefit of market rate fluctuations to its customers. Housing loan interest rates start from 8.60%.