The loans by an individual can be taken from any of the banks, whether public sector, private or co-operative. Also, loans can be taken from non-banking finance companies. Thus it’s totally up to the borrower where the borrower wishes to opt for the loans. The public sector bank interest rates for the home loans are more or less similar to that of the private banks. And both type of banks is good in their way for lending purpose. The interest rates on lending for home loans have come down to as low as 6.40% per annum, the most attractive interest rate offered by banks in history. The sale of the flats has gone up in the post-pandemic times after the second Covid wave due to the recovery in the overall markets, also due to the fall in the interest rates of the home loans and also the performance of the companies and businesses is better, so there is an upward trend in the real estate sector. There is an upward trend in real estate prices due to the rise in fuel cost and the rise in the raw material’s input cost. Etc.
There has been a rise in the overall income of the people post-pandemic, and the employment scenario is back to normal. Thus, there is high disposable income amongst the people who want to invest in the Real estate sector. The places where there is a presence of the IT sector has seen higher positive growth for the Real estate as there is massive hiring going on in the IT sector, and companies are struggling to fill the vacancies in are facing high attrition rate due to higher packages being offered by the competitor companies. Thus the growth seen in the IT sector has a very positive impact on the Real estate sector. Also, IT people are mostly amongst the younger generation and are more likely to take home loans from the banks than those who buy the properties in the late ’50s. Thus the home loan sector is also likely to perform better in the coming months. There is a tremendous dependence & impact on the Real estate sector sale as the many people right from the labor to contractors, construction material suppliers, Architectural firms & RCC firms & the banks for the disbursement of the home loans are dependent on the Real estate sales.
Features of the Public sector banks on home loans
- Public sector banks are less likely to mislead the public while offering loans as the public sector bank employees have a lower burden of targets and thus are not under very high pressure for the disbursement of the loans or achieving targets.
- Public sector banks are traditionally more amongst the trusted ones amongst the public.
- Public sector banks offer the lowest interest rates on home loans to borrowers.
- Public sector banks have a very rigid policy related to the disbursement of the loans, like the requirement of a proper CIBIL score, proper documentation against which the banks can provide loans to the borrowers.
- Public sector banks’ approval process is very slow due to the slow working system of the bank employees.
- Against the default of the home loans, public sector banks follow only legal procedures for the recovery of the loans. And certainly does not harass the customers for the home loans installments. While as the same is not the case with private banks.
Features of the Private Banks related to the home loans disbursement
- Private bank employees provide better service and are keen to provide service to the borrowers.
- Private Banks also offer loans at competitive interest rates to the borrowers and do not charge anything higher than the Public sector banks.
- Private Banks provide home service to the customers to collect documents, provide information to the customers, and after-sales home service for the collection of the cheque EMI for the customers.
- Private Banks in previous times used to be less trustworthy than government banks. But in the past few years have gained the confidence of the customers and thus are known as the trustworthy ones.
- As per the private bank policy, the bank officials are not supposed to mislead the customers. If they do so, the customers can complain to the bank and take legal action against the bank officials for misleading the customers. Thus the customers need not worry about getting cheated.
- Private Banks provide better online services for the repayment of the loan and making any other banking transactions. The systems are designed more customer-friendly than the public sector banks.
There are various positive and negative points about both the public sector and private banks as mentioned in the above points. Thus it depends upon the customers whether to opt for loans from the private bank or public sector banks. After all, both types of banks are good in their way, and both types of banks need business.