Axis Bank, the third-largest private sector lender in the country, on Wednesday introduced a new home loan product, where the borrower will not have to pay the last 12 equated monthly instalments (EMIs) if he had been repaying the money on time.
The new product, ‘Happy Ending Home Loan’, will be offered to new borrowers at the same rates as a regular floating rate housing loan. The lender currently charges 10.75-11.25 per cent interest on home loans, depending on the ticket size.
“We are trying to figure out if this benefit can be extended to our existing clients. But there are some operational issues and it is not available for our existing customers,” Jairam Sridharan, head of consumer lending and payments at Axis Bank, told Business Standard.
For a customer taking home loan for Rs 50 lakh at 11 per cent floating rate, the EMI per lakh is estimated at Rs 1,032. For such a customer the new housing loan product will lead to an EMI waiver of up to Rs 6.19 lakh, the bank said.
The EMI waiver will be offered to all home loans with an initial tenure of 20 years or more and where repayment has been done for at least 15 years. There is, however, no prepayment penalty if a customer wishes to repay ahead of the schedule.
The bank aims to attract new clients, develop good risk behaviour, and improve customers' loyalty through this product.
