State Bank of India is launching a reverse mortgage loan for senior citizens, starting from October 12. Called the “SBI Reverse Mortgage Loan”, it will be available for customers above 60 years.
Under this scheme borrowers can avail loans using their homes as collateral security. They can opt for a lumpsum payment at the beginning or monthly or quarterly payments.
The borrowers need not repay the loan during their lifetime and can also continue to stay in their houses during their lifetime. Thereafter, the legal heirs have the option to repay the bank loan and redeem the property. If not, the bank will sell the property and liquidate the loan. Any surplus amount would be passed onto the heirs.
No upper limit
* There is no upper limit for the amount of loan a customer can avail under this scheme. The maximum tenure of such a loan is 15 years
* Punjab National Bank.
The loan carries a fixed interest rate of 10.75% p.a. subject to reset at the end of every five years along with revaluation of security and re-adjustment of loan instalments, if necessary.
For a loan of Rs 1 lakh, the monthly payment to the borrower on a 10-year loan is Rs 468 and on a 15-year loan, it would be Rs 225. Similarly, for a loan of Rs 1 lakh, the quarterly payment to the borrower for a 10-year loan would be Rs 1,423/- and on a 15-year loan, it would be Rs 687
Succour for aged
*The loan will be given jointly if the spouse is alive, provided he/she is above 58 years of age
*The loan need not be repaid by the borrowers during their lifetime
* Reverse mortgage loan will be launched on October 12 and will be available at all branches of SBI