Revive
Home Loan Account
By Murari
Chaturvedi, Editor, Accommodation Times
Thank
to the ever increasing housing finance companies and commercial banks, home
loans are available a plenty. But still a large number of loan seekers are
not in a position to avail the loan. The reason is that housing finance
companies (HFC’s) or banks do not provide 100% loan. They provide between
60 percent to 75 per cent loan so the loanee has to arrange the rest. But
most of them have no savings or cannot manage the margin money, though they
can very well pay the monthly installment. Many of them get less percentage
of loan due to their repayment capacity as assessed by the housing finance
institutions So, if they want to avail of the loan they must save and
accumulate the required amount of their share. Few years back, with the
concurrence of National Housing Bank, there was one such scheme called
“Home Loan Account” (HLA). Under this scheme one could open a HLA in any
of the designated nationalised bank and start saving regularly (monthly) for
the period of 3 years, on which around 10 percent interest was allowed. In
the end of the scheme period the loanee was to get housing loan equal to
his/her accumulated savings plus interest. The scheme was good and was a
right move. But some how it failed to take off due lack of its promotion and
some procedural lacunae. HLA was also available with some leading housing
finance companies. There may be other factors responsible for the closure of
such a useful scheme. Now we must revive it again with suitable amendments
and with sole purpose to help the middle class, specifically lower middle
class enabling them to plan for their home in near future and save
accordingly. If a person is saving every month regularly in ‘Home Loan
Account, it will not only help him to raise his share of 25 –percent or
more, at the same time it will show his track record of saving to the
housing finance company. It will also prove that he will be able to pay
EMI’s on his home loans regularly. There are countless persons who need
shelter and they are prepared to wait for few years and during the period
are willing to save regularly for it. The leading housing finance companies
can definitely restart their own such HLA schemes linked to housing finance.
HDFC, the leader in the field, must come forward with its own HLA scheme.
They can make it success if promoted property in the targeted groups. The
finance ministry should also consider giving some attractive incentives to
the individuals who opt for HLA. Presently, when there are several housing
finance schemes and packages, HLA can prove to be most sought after if
handled properly.
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