Home Loans for Government Employees

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A benefit that Indians enjoy is specially designed home loans for government employees. Many public sector banks like SBI and Punjab National Bank offer a particular Home Loan for government employees at low interest rates starting from 6.95% per annum. These tailored deals and rebates on home loans are also introduced to assist the government employees in buying/constructing a new house.

Nationalized banks like SBI and Indian Bank offer exclusive Home Loan schemes to the Central Government and defense personnel employees. The Privilege Home loan and Shaurya Home Loan scheme are the two unique plans. The interest rates for Indian Bank home loan for general borrowers are between 7.50% to 8.50%, wherein these programs, the government servants and defense personnel can obtain a Home Loan at a lower interest rate in a shorter period. The maximum eligible age is also increased from 70 to 75 years until the loan matures along with attractive interest rates.  

For the Privilege Home Loan, the eligibility criteria and features are as follows - 

1. Eligibility criteria: Central/State Government employees, which includes Public Sector Banks (PSBs), PSUs, as well as retired professionals who are entitled to pension services.

2. Features: 

• Lower interest rates (brought down by 0.05%-0.1% than usual interest rates; starting from 6.95% per annum)

• The processing fee is waived off completely, but the credit charges and stamp duties remain the same.

• Central Government employees can switch from NBFCs and other private sector banks with outstanding balances to avail themselves of better interest rates. 

• CIBIL score should be more than 650.

3. Documents required:

• Employer ID proof

• Self-Attested Loan application form 

• Two passport size photographs

• Proof of residence (Ration Card/Utility bills/Voter ID)

• Property Papers (Permission for construction/Registration certificate/Agreement for Sale/Occupancy certificate)

• Income Proof (Salary slip of last three months/Form 16/ITR)

• Credit report

• Bank account statement for the previous 3-6 months.

Shaurya Home loan scheme is specifically for Defence personnel and their family members as co-applicant. Its eligibility, features, and other details are -  

4. Eligible candidates: Defence officers and clerks of Army, Navy, Air Force, and Special forces.

5. Features: 

• Interest rates: Like privileged Home loans, the interest rate is slightly lower than for general borrowers, ranging from 6.90%-7.40% per annum.

• After retirement, the EMI payout gets reduced as the limit is around 50% of the net monthly income.

• The loan tenure is relatively longer for defense personnel and can be increased from 25 years to 30 years.

• Like the Privilege home loan scheme, the outstanding balance can be switched to any of the nationalized banks for a lower interest rate and tenure.

• The Home loan gets pre-approved for defense personnel and saves the additional time taken in the application process.

6. Documents required: The documents needed for the Shaurya scheme are the same as those for the Privilege HL Scheme.

If the government employee is a woman, then the benefits are even more as they get coupled with special Home loan schemes for women. The processing fee is also waived off, and the terms & conditions aren't strict either. Married couples also get the same benefits if both the husband and wife apply as co-applicants.

There is a maximum interest rate cap for Home loans for government employees currently set at 8.5% per year, and it gets revised every three years. 

  

Conclusion

The advantage of having a customized Home Loan just for government employees helps them even if they have a lower income or budget. These schemes enable the applicants to buy their new houses at reasonable interest rates and for longer tenures.

Also Read This-The Procedure Of Home Loan