Sundaram BNP Paribas launches cheap rural home loan scheme

Sundaram BNP Paribas Home Finance has launched a new scheme for funding rural houses at a concessional rate of interest.

This is in the wake of the National Housing Bank (NHB) deciding to offer refinance to housing finance companies (HFCs) at a special rate of interest to promote the growth of rural housing.

Under the scheme, loans to scheduled castes / scheduled tribes / specified minority communities and for properties held in the name of women (either as owner or co-owner) will be entitled to a concessional rate of 9.60 per cent. This concessional rate is fixed for seven years, and will be converted to floating rate of interest thereafter.

Under the scheme, the upper cap of the loan amount is Rs15 lakh for acquisition / construction of residential dwelling units. The loans for home improvement and extension under this scheme should not exceed Rs5 lakh. The relevant property should be located in an area conforming to the definition of rural area under the NHB norms, a release says.

''Considering the thrust the new government is placing on housing for all, we feel that the need for mortgage credit would also increase. Our 'close to the customer' strategy with focus on expanding our reach to Tier-2 and -3 towns across India will drive our disbursement growth in rural housing segment,'' a release quoted Srinivas Acharya, managing director, as saying.

Sundaram BNP Paribas Home Finance is a joint venture between Sundaram Finance (50.1 per cent) and BNP Paribas (49.9 per cent).