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About United Bank of India

United Bank of India has a fascinating history behind its formation. Though officially incorporated in 1950 as United Bank of India, it traces its history to 1914. It is because four different banks united together and established the United Bank of India. These banks were Comilla Banking Corporation Ltd (1914), Bengal Central Bank Ltd (1918), Comilla Union Bank Ltd (1922), and Hooghly Bank Ltd (1932). United Bank of India was among the first lot of banks to be nationalised on July 19, 1969. At that time, the bank had 174 branches with a total business of around 260 Crores. Today, the bank has spread its network with nearly 2000 offices and the overall business of 2 Lakh Crores.

United Bank of India has a dominant presence in the eastern part of our country with a specific concentration in the states of Assam, Tripura, Manipur, and West Bengal. This bank is responsible for introducing institutionalised banking in the North East. United Bank of India is also referred to as 'Tea Bank' because it has an age-old association with financing tea gardens in Assam and other parts of the North East. The history of United Bank of India is at crossroads today with the announcement of its merger with Punjab National Bank. Oriental Bank of Commerce is also joining this triumvirate to form what would be the second-largest banking conglomerate in India after SBI.

United Bank of India Home Loan

United Bank of India offers an extensive range of Home Loan products to suit the housing requirements of all sections of people. The bank has unique schemes to cater to the rural household. Similarly, it offers affordable Home Loans to the middle-income group. This bank has an innovative Home Loan product for pensioners. The unique characteristic of this loan scheme is that it provides pensioners to invest in a home. The repayment tenure extends until the pensioner turns 75 years of age. United Bank of India is also an active lender in PMAY.

The principal attractions of United Bank of India Home Loan products are its attractive rates of interest and transparent service charges. Quick processing and minimum documentation are other features that attract customers towards United Bank of India.

United Bank of India - Home Loan Products

United Housing Loan Scheme

Target

  • Salaried persons and self-employed individuals/professions
  • Non-individuals are also allowed to avail this facility

Purpose

  • Purchase/construction of house/flat
  • Supplementary finance to complete the project financed by the employer of the applicant.
  • Home Loan takeover
  • Purchase/construction of 2nd or 3rd house
  • Repairs and renovations to the existing house

Maximum amount

  • Housing purposes - No restrictions on the amount
  • Repair and renovations - 10 Lakhs
  • Extensions to house - 15 Lakhs

Rate of interest

Floating rate of interest - 6M-MCLR

Features

  • Easy eligibility norms
  • Flexible repayment tenure extending up to 30 years
  • Reasonable processing charges
  • Repo linked lending rate product available
United Smart Loan Scheme

Target

Existing Home Loan borrowers who have completed a minimum of two years repayment.

Purpose

Purchase of furniture/fixtures and interior decoration

Maximum amount

5 Lakhs (existing Home Loan outstanding amount and fresh loan together should not be more than the original sanction).

Rate of interest

One-year MCLR + 2.80%

Features

The maximum repayment tenure is five years but should not extend beyond the repayment tenure of the original Home Loan.

United Housing Loan for Pensioners

Target

Pensioners drawing a minimum pension of 5,000 from Central/State Government departments and other reputed companies/institutions.

Purpose

  • Purchase/construction of the house
  • Repairs and renovation

Maximum amount

10 Lakhs

Rate of interest

Same as that of United Housing Loan Scheme

Features

Maximum age at maturity of the Home Loan should not be more than 75 years

Similarly, there are specific Home Loan products for the rural and urban people like:

  • United Affordable Housing Loan Scheme - PMAY for EWS and LIG families
  • United Affordable Housing Loan Scheme for MIG - PMAY for MIG-I and MIG-II
  • United Platinum Housing Loan Scheme - Home Loan product for permanent employees of Central/State Government and PSUs.
  • United Rural Housing Interest Subsidy Scheme - Rural Housing under PMAY (Gramin)
  • United Home Advantage - Housing Loan with overdraft facility

United Bank of India - Home Loan Interest Rates

United Bank of India offers competitive rates of interest on Home Loans and other connected products.

Repo Linked Lending Rate - RLLR

United Bank of India follows the Reserve Bank of India's directives by announcing a unique Home Loan product connected to the RLLR concept. Reserve Bank has asked all banks to switch over to a new external benchmark such as the repo rate or T-bill rates. United Bank of India has fixed its RLLR at 7.70%.

The effective rate of interest for individual borrowers will depend on the interest spread that the United Bank of India specifies for each individual. The range could depend on various factors such as credit rating of the borrower, LTV ratio or any other parameter.

The calculation of the RLLR is a simple exercise. It depends on two factors:

  • Repo rate is announced by the Reserve Bank of India from time to time. The present repo rate is 5.40%.
  • The average net interest margin of the bank for the last ten years rounded off to the nearest five basis points. In the case of United Bank of India, it works out to be 2.30%.
  • Hence, the RLLR of United Bank of India is 7.70% with effect from September 01, 2019

The product-wise effective rates for Home Loans linked to RLLR are as follows:

United Bank Housing Loan Scheme - with effect from September 01, 2019

Loan Limit

LTV %

Rate of interest

Effective rate of interest

Up to 30 Lakhs

<= 80%

RLLR + 0.45

8.15%

More than 80% and <= 90%

RLLR + 0.60

8.30%

More than 30 Lakhs and up to 75 Lakhs

<= 80%

RLLR + 0.45

8.15%

Above 75 Lakhs

<=75%

RLLR + 0.60

8.30%

United Bank Platinum Housing Scheme

Irrespective of amount of loan and LTV ratio - RLLR + 0.45 = 8.15%

Points to Note - RLLR-linked Home Loan Interest Rate

  • The rate of interest is a floating rate
  • The rate will change with every alteration in the repo rates announced by the RBI
  • The Home Loan interest rate changes will take effect from the 1st day of the following month
  • At present, only new loans sanctioned with effect from September 01, 2019 are eligible
  • An option is available to new borrowers to link their Home Loans with the existing MCLR rate structure.
  • The quantum of housing loan is as follows:
    • Metro - Up to 3 Crores
    • Urban - Up to 1 Crore
    • Semi-urban - Up to 45 Lakhs
    • Rural - Up to 25 Lakhs

Marginal Cost of Funds Based Lending Rate - MCLR

The RLLR interest rate concept is valid from September 01, 2019, for new borrowers. The MCLR is applicable for existing borrowers. New borrowers can also opt for the MCLR interest rate structure. The MCLR concept is effective from April 01, 2016. United Bank of India announces its MCLR at frequent intervals. The latest such revision was on July 17, 2019.

Tenor Overnight - MCLR 1-month MCLR 3-month MCLR 6-month MCLR 1-year MCLR

MCLR

8%

8.25%

8.40%

8.55%

8.70%

The effective Home Loan interest rates for individual borrowers are as follows:

Home Loan Product Rate of Interest Effective rate of interest

United Housing Loan Scheme

6-month MCLR

8.55%

United Housing Loan Scheme for 3rd house

6-month MCLR + 0.50%

9.05%

United Smart Loan Scheme

1-year MCLR + 2.80%

11.50%

United Housing Loan Pensioners

6-month MCLR

8.55%

United Affordable Housing Scheme

6-month MCLR

8.55%

United Affordable Housing Loan Scheme for MIG

6-month MCLR

8.55%

United Platinum Housing Loan Scheme

3-month MCLR

8.40%

United Rural Housing Interest Subsidy Scheme

6-month MCLR

8.55%

United Home Advantage

6-month MCLR

8.55%

Base Rate Mechanism - BR

Before the introduction of MCLR, United Bank of India was following the Base Rate concept. The bank announces its base rate at regular intervals to benefit the customers who still follow the BR interest rate structure.

The Base Rate of the bank with effect from October 12, 2015, is 9.65%.

Home Loan Product Rate of interest linked to BR Effective rate of interest

United Housing Loan Scheme - Floating Rate

BR + 0.10

9.75%

United Housing Loan Scheme - Fixed Rate

Fixed for three years:

BR + 0.10 floating rate after 3 years

9.75%

9.75%

United Housing Loan Scheme for Pensioners

BR + 0.10

9.75%

Benchmark Prime Lending Rate - BPLR

The Base Rate concept is effective from July 01, 2010. Before this date, United Bank of India followed the BPLR rate structure. 

The BPLR of United Bank of India as on April 23, 2012, is 14.60%

United Bank of India Home Loan - PMAY Interest Subsidy

United Bank of India has two loan products under the PMAY-Urban Home Loan programme, one for the EWS and LIG category and the other for the MIG category. The eligibility criteria are different, and so is the available PMAY subsidy. The rate of interest on the Home Loan is the same as that of United Housing Loan Scheme. The only difference is the crediting of the upfront interest subsidy into the loan account.

ategory of Borrower Eligibility Criteria - Annual Family Income Maximum loan Eligible for a Subsidy Subsidy % Maximum Amount of Grant

EWS

3 Lakhs

6 Lakhs

6.5%

2.67 Lakhs

LIG

6 Lakhs

6 Lakhs

6.5%

2.67 Lakhs

MIG-I

12 Lakhs

9 Lakhs

4%

2.35 Lakhs

MIG-II

18 Lakhs

12 Lakhs

3%

2.30 Lakhs

Treatment of PMAY Subsidy - Its Effect on EMI

  • PMAY grant is an upfront interest subsidy
  • The maximum tenure for calculation of the subsidy is 20 years
  • The grant is calculated on the NPV of interest at a notional rate of 9% for 20 years
  • On credit of the subsidy to the loan account, the principal amount reduces by the extent of the support.
  • The EMI is calculated accordingly, thereby benefiting the borrowers

United Bank of India - Home Loan Interest Rates - Frequently Asked Questions

What is unique about the Home Loan product for pensioners?

Usually, pensioners are not eligible for Home Loans because of their age. United Bank of India has a unique product where it provides Home Loans for pensioners up to 10 Lakhs for purchase or construction of house and repairs and renovations. This offer is available for pensioners retired from Central/State Government departments, PSUs, and other reputed institutions. The unique aspect of this Home Loan product is that the repayment of this loan can extend up to the borrower reaching 75 years of age.

Will income tax benefits be permissible in such loans?

Yes, income tax benefits are available on all Home Loans.

Does United Bank of India charge any foreclosure or prepayment charges?

United Bank of India does not charge any foreclosure or prepayment charges on Home Loans with a floating rate of interest. This benefit is allowed to individual loan borrowers only. Non-individuals and those borrowers with a fixed rate of interest are liable to pay foreclosure charges as per bank rules.

Can a borrower switch over from the MCLR to the RLLR interest rate structure?

As on date, RLLR Home Loans are available to new customers only. Existing customers cannot switch to RLLR rate today. However, United Bank of India might introduce this facility in the future.

As a new borrower, is it compulsory for me to accept the RLLR interest rate structure?

No, the borrower has the option of choosing wither RLLR or MCLR at the time of applying for the Home Loan today.

Which of the two interest options is a better one?

If you go purely by numbers, the RLLR is a better option today, as the rate of interest is less than that you get in the MCLR rate structure. However, the changes in the repo rate can swing the interest rates either way. If the repo rates rise, the effective rate of interest on your Home Loan could be more than the MCLR linked Home Loan interest rate. The resetting of the MCLR takes time as compared to the RLLR. Therefore, one should think carefully before choosing between the RLLR and MCLR.

Is there a fixed rate option in United Bank of India for a Home Loan?

The interest rate tables suggest that there is no fixed rate option in the MCLR and RLLR rate structures. However, the Base Rate structure has a fixed rate option. As of today, no borrower can opt for the Base Rate structure.

Can a borrower shift from the fixed-rate option in the Base Rate structure to a floating rate option in the Base Rate or MCLR structure?

The borrower can switch over from the Base Rate structure to the MCLR on the payment of a conversion fee. The customer does not have any option to switch from the Base Rate fixed rate option to the Base Rate floating option. The shift has to be from the Base Rate to the MCLR. The reverse is also not permissible.

Does my credit rating/score have any effect on my Home Loan interest rate?

United Bank of India checks your credit score at the time of appraising your Home Loan application. The credit score does not have any effect on the rate of interest, either in the MCLR or in the RLLR concept in United Bank of India. 

How does United Bank of India calculate the spread on the RLLR for a Home Loan?

The RLLR of United Bank of India is 7.70% with the repo rate being 5.40% today. The difference of 2.30% is the average of the net interest margin of the bank for the last ten years rounded off to the nearest five basis points. United Bank of India adds a premium to the RLLR to arrive at the effective rate of interest on the individual Home Loan. This premium depends on the value of the property and the LTV ratio.

United Bank of India Home Loan - Latest News Snippets

Kolkata-based United Bank of India introduces repo-rate linked Home Loan and car loan product

In the aftermath of Reserve Bank of India cutting repo rates, United Bank of India has introduced RLLR-linked retail products. These new Home Loans and car loans are available with effect from September 01, 2019.

United Bank of India is planning to reduce the MCLR by a substantial percentage

With the announcement of linking retail loan products to the repo rate, United Bank of India is also contemplating reducing the MCLR by a substantial percentage soon.

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