Muthoot Finance has launched a new scheme to finance margin money needed to avail of home loans. As per norms, a home loan borrower has to contribute 20 per cent margin money (equity) to avail a housing loan for up to 80 per cent of the property’s value.
Many prospective home buyers fail to get a housing loan because they do not have margin money that runs into several lakhs.
The new product will cater to home loan seekers, who have difficulty in paying the margin money upfront. The product, designed for the down payment of a new property or renovation or extension of an existing property, will have a repayment period of five years. No property or income documents are required. The rates under the new scheme are cheaper as compared to personal loans, Muthoot Finance said. Under the plan, customers can avail a loan of Rs. 1 lakh to Rs. 10 lakh at an interest rate of 11 per cent interest rate for a period of 12 to 60 months.
Muthoot has also launched a new consumer loan scheme to offer convenient credit options to customers for buying consumer durables. The EMI-based loan service can be cleared within 36 months, the company said. The scheme does not include any ‘Negative Area’ concept — a ground used by many lenders to reject loan applications.
Muthoot will provide instant finance, up to 100 per cent of the product value, without the need of CIBIL score or credit card. There are no processing charges and an exclusive zero down payment facility is offered to all customers, the company said.