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Karur Vysya Bank Home Loan Interest Rate

A home loan is also called mortgage loan, it is a type of secured loan. The borrower provides the home to be purchased or built as collateral against the amount borrowed. Borrowers are required to apply for a home loan with any financial institution (Banks or NBFCs). An application form along with required documents will be submitted. The bank will check for eligibility and based on qualification would approve the loan. The borrower is required to repay the loan amount in the form of monthly installments called the equated monthly installments (EMI). The EMI constitutes both interest and principal. The bank will evaluate the credibility of the borrower before granting the loan. The interest rate is purely dependent on the credit score of the individual. Applicant with a higher credit score will be in a better position to negotiate a lower interest rate. Home loans tenure typically ranges between 10 – 30 years. The interest rates on home loan is lower than that of other types of loan. Home loans can be used for a variety of proposes, the bank products with respect to home loan are named based on the purpose for which they are borrowed.

Types of Home Loans

  • Home Purchase Loan: Loan that one takes for purchasing a home
  • Home Improvement Loan: Loan covers expenditure related to repairs of your home or even renovation
  • Home Construction Loan: Loan comes in handy when you are building a new house
  • Land Purchase Loan: Used to buy a plot of land for constructing his/her own house
  • Home Extension Loan: Used to add another room, garage, bathroom or kitchen, add another floor to your home
  • Joint Home Loan: Loans taken by two people or even more
  • Home Loan Balance Transfer: Use this mechanism to switch existing outstanding loan amount to a different lender with better terms and conditions and lower interest
  • Top Up Home Loan: This kind of loan helps one to borrow some more money above the outstanding loan amount

Types of interest rate on Home Loans

There are basically 2 types of interest rates – Fixed interest rate and floating interest rate. Fixed interest rate refers to the interest rate which is determined at the time of loan approval and stays constant till the end of the loan tenure (unless, the bank has a policy of revising the interest rate based on any drastic market interest rate movement – this clause will be duly mentioned in the loan approval documents).

Floating interest rate refers to interest rate which will align itself from time to time with market interest rate. The interest rates in the case of floating interest rate is linked to the prime lending of the bank. This prime lending rate is affected by repo rate. Repo rate is the rate at which the bank borrows money from the central bank. This fluctuates based on the macro economic scenario of the economy. The advantage of the floating interest rate is that it tends to be a bit lower than the fixed interest rates.

Both these interest rates have their own pros and cons, citing this, most banks offer a third variant in interest rates which is the hybrid rate. Hybrid interest rate is a combination of fixed interest rate and floating interest rate. A part of the interest rate will be held constant over the loan tenure which is the fixed interest rate component. The other part will align itself at regular intervals with market interest rate, thus becoming the floating interest rate component.

Interest rates on Home Loans offered by Karur Vysya Bank

The interest rates applicable on home loans by Karur Vysya Bank are as mentioned below –

Nature of FacilityROI
Happy Home LoansStarting from 8.90% to 11.65%

Note: Rate of Interest linked to MCLR. Rates will change based on prevalent MCLR.

Marginal Cost of fund-based Lending Rate (MCLR)

Finding the right home loan with attractive interest rate can be quite a daunting task, CreditMantri helps individuals compare the interest rates across various lenders and choose the one that offers the most favorable terms. They help shortlist only those vendors where the applicant is eligible. This reduces the chance of rejection, thereby preventing lowering of credit score. Creditmantri can also help the applicant with the entire application and documentation process.

Charges and limits of Home Loans extended by Karur Vysya Bank

The processing charges applicable on various home loan values are as mentioned below -

Processing Charges
Loans up to Rs. 25 LakhsRs. 2,500/- + GST
Loans between Rs. 25 Lakhs & Rs. 50 LakhsRs. 5,000/- + GST
Loans above Rs. 50 LakhsRs. 7,500/- + GST

Factors that influence the interest rate of Home Loans offered by Karur Vysya Bank

Amongst the multiple factors which influence the interest rate of home loan offered by Karur Vysya Bank, the important ones are listed below –

  • Credit score :
  • Individual with higher credit score is a better position to negotiate favorable interest rate.

  • Income level :
  • Higher income level creates an impression of good credit history and also the ability to repay the loan is higher. The bank prefers to provide loan at competent rates to such applicants since the risk of default is lower.

  • Stability of income :
  • Long standing employment history indicates stability of income, this increases the chances of negotiating for a favorable interest rate

  • Reputed employer :
  • Being employed with a reputed employer increases the chances of negotiating a favorable interest rate. Many times, corporates tie-up with banks to enable employees to borrow at competent rates or preferential rates (rates lower than those offered to other customers).

  • Type of applicant :
  • Typically, banks prefer salaried applicants to self–employed professionals or businessmen. Salaried applicants who have a long-standing employment history and those employed with reputed employers are likely to gain favorable terms.

  • Loan value :
  • If the quantum of loan is higher, the bank prefers to provide the loan at competent rates. This provides the bank visibility of revenue for the longer tenure and for a significant amount.

  • Relationship with lender :
  • Often banks prefer existing customers with a history of decent credibility. This lowers the risk for the bank significantly. Hence, the customer may be offered favorable interest rates as compared to a new applicant (with good credit history), since the bank is unaware of the conduct of the new applicant and hence, places its trust on existing customer.

Features and benefits of Home Loans offered by Karur Vysya Bank

Karur Vysya Bank offer happy home loans to resident Indians and for NRI’s it offers home loan product under the name KVB Gruhapravesh. The features of both the products are similar.

  • All Resident Individuals – Happy home loan
  • NRI‘s can also avail the loan under KVB Gruhapravesh.
  • purposes
    • For the construction of Independent Houses.
    • For outright purchase of Independent Houses, Flats (not older than 15 years).
    • For purchase of plots and construction there on.
    • For takeover of loans from another Bank / FI’s.
    • For Improvement / Repairs / Additional construction / Renovation of existing houses or flats owned by you.
    • For purchase of Plots or Flats developed by Government Authorities.
  • Maximum loan tenure – 25 years
  • Prepayment charges – Nil
  • Maximum holiday period – 2 years for house construction and 3 months for outright purchase of completed house / apartment (period when one can pause the EMI payment)

Frequently asked questions: Karur Vysya Bank Home Loan Interest Rate

1. Who can apply for home loans from Karur Vysya Bank?

Salaried individuals, self–employed professionals, self–employed businessmen, HUF can apply for home loans. Both resident Indians and NRIs can apply for home loans from Karur Vysya Bank.

2. What are the types of interest rates available on home loans from Karur Vysya Bank?

Home loans can either be fixed interest rate home loans or floating interest rate home loans. There is a third variant which is the hybrid interest rate home loan which combines the features of fixed and floating interest rate home loans.

3. What factors influence the interest rate on home loans from Karur Vysya Bank?

Credit score, income level, stability of income, property value, loan quantum, market interest rate etc., influence the interest rate on home loans.

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