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Kerala Flats and Villa Projects

# What is the EMI or monthly installent per Rs. one lakh Bank loan to buy a flat?

The monthly installment to be paid back to the bank depends on two things: the interest rate and the period for which the loan is taken. The technical term the banks use for this monthly installment is EMI (Equated Montly Installment). The formula to calculate EMI is as follows:

where:
P = principal loan amount
r = annual interest rate / 12
n = number of monthly installments

Most banks in India calculate the EMI repayment instalment amount by the Annual Reducing Method, whereby the interest for the whole year following is calculated on the balance outstanding on the first day of the financial year, even though your are paying instalments monthly and the principal loan amount is being reduced every month. The EMI is calculated using the above formula.

The monthly re-payment amount on every one lakh housing loan in Kerala or the per month EMI per lakh home loan calculation can be done online from websites of Banks like SBI, ICICI and HDFC.

One of the best online home loan EMI calculator in India is from HDFC India (Housing Development Finance Corporation of India). Other online home loan EMI calculator in India is available from SBI online EMI calculator and from ICICI Bank loan EMI calculator.

For example we can use these online resources to calculate our EMI for a bank loan and calculate that the per lakh EMI on a home loan of 1 lakh at an interest rate of 10% per anum and for a period of 10 years works out to an EMI of ₹1322- per month.

## Will EMI for home loans reduce if government RBI reduces interest rate?

These days of falling interest rates, when availing of a Home Bank loan make sure that you opt for the MCLR Scheme (Marginal Cost of Funds-based Lending Rate). Under this scheme the interest rate which the bank charges you are adjusted every year or every six months, depending on your agreement with the bank. This means that if the RBI or Reserve Bank of India announces a rate cut, then the bank will only apply the reduced rates to your EMI after 6 or 1year from the date of the RBI announcement of reducing the interest rate. Note that in case the interest rate is increased, the same rules apply.

The MCLR facility was introduced from 1st April 2016. People who availed of home loans earlier did not enjoy this facility and they may be paying EMI at a fixed rate prevailing at the time they took the loan, which was much higher than what it is now. It is possible to convert the old home loan to be under the new MCLR scheme if a request is made to the bank. The Banks usually charge a conversion fee of about 0.5%.

## Bank home loans to buy flat in Kerala, bank loan interest rates in Kerala

Getting a housing loan in India to buy a house, be it a flat or a villa has never been easier. Bank loan for flats in Kerala are also available from almost all branches of Banks in Kerala and the bank loan interest rates in Kerala are no higher than the national average of interest rate for housing loans in India.

There are dedicated Home loan institutions like HDFC (Housing Development Finance Company), CanFin Homes (The home loan arm of Canara Bank) and LIC Housing Finance. All the Nationalised Banks and Private Banks of India like SBI (State Bank of India), BoB (Bank of Baroda), Axis Bank, ICICI Bank, etc. are all vying with each other to offer housing loans.

For these banks housing loans are a very profitable and secure business, and so they go out of their way to provide home loans against the security of the property you are buying. Most banks give upto 80% of the value of the property as home loan. The balance 20% will have to be made by the loan applicant as down payment. For best and easy home loans in Kerala it is best to go to your banker first or to specialised housing loan companies like HDFC and CanFin Homes.

## Who can get a Bank loan in Kerala India?

To be Eligibable for bank home loans in Kerala India, all these institutions offering home loans look at your ability to pay the monthly loan repayment instalments called EMI (Equated Monthly Instalments) on time. So they make sure that you have a good employment record with a regular salary income. The first hurdle in getting a bank loan to buy property in India is to convince the Bank that you have a steady job with enough savings from your salary to pay the loan EMI or monthly instalments. Once you clear this hurdle, the rest of the procedures are not so difficult. It involves documentation about the property you are buying, like title deeds, approved plan and drawings, tax receipts, etc. The builder from whom you are buying the flat or villa from, will be more than happy to provide all these documents.

## Repayment period and housing loan interest rates in Kerala

The repayment period depends on your age. Banks normally have a cut off age at which the loan must be fully repaid. Normally Banks wants all loans to be cleared by the time you attain an age of 60 or less. For example if you are 45 years at the time of applying the banks will not allow the repayment period to exceed 15 years, when you will turn 60 years of age. For a 30 year old, they may allow upto the maximum loan period of 25 years.

Interest rate on Home Loans in Kerala can be fixed throughout the tenure of your loan period or it can be flexible depending on the Reserve Bank of India interest rates. Now in India, the interest rates are high, so it is better to opt for a flexible home loan interest rate. Each bank has it own sets of rules for bank loan interest rates in Kerala, so this must be checked with the Bank just before deciding to take a loan.