Buying a property necessitates in depth knowledge of real estate and choosing the right kind of loans. Several banks are stepping up their exposure to real estate. These banks are entering into agreements with builders for provision of real estate loans. The Scheme mainly caters to builders / promoters / developers of real estate. According to RBI figures loans to builders, along with retail credit (like home loans, credit cards and personal loans) constitute a chunk of banks' total loan portfolio.
Banks normally give real estate loans to builders/real estate developers of repute. Experience of 3-4 years is a must to avail the loan. The quantum of loan is decided after looking at the financial statements and cash flow statement of the applicant. The maximum amount varies subject to individual policies in different banks. Repayment is done in lump sum installment after the completion of project/ selling of the flats. The number of installments is restricted to 3 or 4.
The interest rate is normally determined and charged according to the prime lending rate of the individual bank. Builders can either opt for a fixed or floating rate of interest.
Builders / real estate developers can fill the loan form either in person or online and apply for the loan. A nominal processing fee is charged by banks.
*Terms and conditions may vary from bank to bank.