United Bank of India is a leading public sector bank of India, with thousands of branches spread across the country. In addition to the standard banking facilities, the United Bank of India also offers various types of Home Loans for its customers. One of the most popular loan products from the United Bank of India in the United Housing Loan Scheme.
If you are contemplating about availing a United Bank of India Home Loan, you must understand its pros and cons carefully before making a final decision.
United Bank of India Home Loan: Pros and Cons
As Home Loan is a significant financial commitment which you will be serving for most of your working life, careful consideration is a must before signing up for it. One of the best ways to analyses the suitability of housing finance is to study its Pros and Cons. Here is a detailed analysis of the Home Loan product from UBI for your perusal.
- Multiple Types of Home Loans: One of the biggest Pros of United Bank of India Home Loans is that they are available in different types and for different purposes. Thus, you can purchase any type of residential property as per your preferences. United Bank of India Home Loan is available for purchase, renovation, construction, the extension of a House, or a Flat or a Plot. You can also avail of Home Loan for purchase or construction of your 2ndor 3rd residential property.
- High-value loans: UBI offers high-value loans for its customers based on their eligibility. The quantum of loan available also depends on the location of the property, with the maximum amount available subject to the following:
- For Metro cities – Up to Rs 3 Crores
- For Urban centres – Up to Rs. 1 Crore
- For Semi-urban centres – Up to Rs. 45 Lakhs
- For Rural centres – Up to Rs. 25 Lakhs
- Competitive interest rates: United Bank of India Home Loan Interest Ratesare linked to the repo rate, i.e., RLLR. Consequently, you will get the direct benefits of cuts in the repo rate by the RBI. Presently, interest rates for United Bank of India Home Loan are as shared below:
- For Home Loan up to Rs. 30 Lakhs (LTV Ratio between 80-90%) – 8.15%
- For Home Loan up to Rs. 30 Lakhs (LTV Ratio below 80%) – 8.00%
- For Home Loan from Rs. 30 Lakhs to Rs. 75 Lakhs – 00%
- For Home Loan above Rs. 75 Lakhs – 15%
- Processing fee waiver: Offering its customers the opportunity to reduce the cost of their home, the United Bank of India has waived-off its processing fee till 31stMarch 2020. This is an excellent opportunity for you to become a homeowner while saving a substantial sum of money on the processing fee.
- Long repayment tenor: The maximum available repayment tenor available for United Bank of India Home Loan is 30 years or 360 months. The maximum available tenor is subject to the date when the primary borrower attains the age of 70 years. This longer repayment period allows you the flexibility to choose an EMI amount that you can repay comfortably.
- Better LTV ratio: The Loan-To-Value ratio offered by the United Bank of India can go up to 90%, depending on the amount of loan required.
- For Home Loan up to Rs. 30 Lakhs – Up to 90%
- For Home Loan between Rs. 30 Lakhs to Rs. 75 Lakhs – Up to 80%
- For Home Loan above Rs. 75 Lakhs – Up to 65%
- No prepayment charges: United Bank of India does not levy any pre-payment or foreclosure charges against its Home Loan products. Therefore, you can repay your Home Loan before the scheduled time to save on the interest cost.
- Balance Transfer: You can effortlessly transfer your high-interest Home Loan to the bank and save on your interest cost and avail lower EMIs.
While the features of United Bank of India Home Loan are quite attractive, but certain points require your consideration before apply for a UBI Home Loan.
- Long processing time: The processing time for a United Bank of India Home Loan can stretch up to a few weeks. Even though the bank supports online applications, but it still takes several weeks to scrutinize the documents and conduct the verification process depending on the location of the property.
- No fixed rate interest option: United Bank of India Home Loan interest rates are based on floating rate structure as they are linked to the Repo Rate. There is no option of fixed-rate structure; thus, your EMIs will frequently change if there are frequent changes in the repo rate.
- Stricter requirements for self-employed: The eligibility criteria for self-employed borrowers are a bit stretched out with the requirement of three years of experience and audited financials. Moreover, it is expected that the profitability of the business increases every year, which is difficult in the present times.
- Low loan amount for repair and extension: The maximum amount available for repairs is Rs. 10 Lakhs, and for renovations is Rs. 15 Lakhs only. This amount is very less for undertaking such projects in metro cities as well as urban centres. Moreover, the documentation list required for these loans is quite exhaustive.
- High margin for purchase of plot: If you wish to purchase a plot of land with United Bank of India Home Loan, you need to arrange for 40% of the margin money as per your eligibility. This might not be possible in case of plots in metro cities and urban centres where the values can run into Crores.
With this detailed analysis, you can now make an informed decision efficiently.