A loan provider can be either a public or private sector undertaking this is not common in some of the more financially developed countries of the world like the USA and China, these countries have totally opposite type national economic systems which has a significant impact on the overall flow of money in the financial market. In the USA, the economy runs without governmental support in which privatisation of most sectors is allowed; this is known as a Capitalist economy. This kind of economy is favoured by the public, but its collapse causes grave financial problems such as recession, unemployment, uncountable losses.
Whereas in China, the government controls the whole market as there is no or minimal private ownership allowed. Though this allows for fast development at less cost and makes the country economically strong, it provides no independence and freedom of expenditure to the citizens of the country. This system is referred to as a socialistic economy.
In India and the UK, the economic system is a combination of the above two; hence it is called a mixed economy which is a good blend of public and private sector undertaking.
Home loans are also an instrument of debt, and they are also affected by the economic structure of the country; if we assume the example of a capitalist country, the value of any loan would be governed on the basis of factors that are not influenced by the government; hence the terms offered are in the hands of the loan provider and not of any governing body for loan provision. Whereas in a socialist economy, all the significant terms would depend on the guidelines of the government. And finally in our mixed economy, all the factors of both the government as well as private market influence the terms offered.
A general Home loan eligibility criteria provided by most banks in India are as follows:
Home Loan eligibility varies depending on the lending agency and loan type. However, the following is a list of standard housing loan qualifying criteria:
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Citizen status: Indian residents, non-resident Indians (NRIs), and people of Indian ancestry (PIOs).
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Credit Score: A CIBIL value of 750 or higher is preferred.
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Age range: 18 to 70 years old.
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Work Experience: At least two years (for salaried) (for salaried).
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Business Continuity: At least three years (for self-employed) (for self-employed).
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Minimum Salary: Rs. 25,000 a month Minimum (varies across lenders & locations).
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Amount of loan: Up to 90% of the property's value.
One of the leading organisations offering home loan in India is the Oriental Bank of Commerce (OBC) which is a leading public sector institution offering an excellent deal to the customer and allowing for sustainable development of individual livelihood for their current account holders.
The general features of Oriental Bank Home Loan are as under:
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The interest rate on an OBC home loan starts at 6.95 per cent.
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OBC charges a payment fee of up to 0.50 per cent of the transaction amount, up to a maximum of twenty thousand rupees.
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The term of a home loan will vary from 5 to 25 years.
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The lowest EMI per lakh on an OBC home loan is 704 per lakh, with the least interest rate in the market of 6.95 per cent and a loan term of 25 years.
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On floating rate loans, the OBC makes prepayment with no penalty.
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Customers who availed the home loan with OBC have given the bank an overall ranking of 2.5 out of 5.0.
