Government employees are one of the most lucrative customers for banks. Their salaries and the amount of loan they can take are usually higher than other home loan customers. Plus, government employees have a stable source of income, a regular job, and, more importantly, a pension.
Government employees are one of the essential pillars of any country. Their service should be interpreted in many ways, to reward them for their dedication, fulfill their needs, and most importantly, motivate them with different incentives. One of these benefits is the home loan for government employees.
On home loans, government employees get benefits such as low-interest rates. Due to these factors, a home loan for government employees is always a profitable business for banks. Below, we discuss the home loan benefits for government employees.
Government Employees’ Home Loan Benefits
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Easy Repayments and Low EMIs
Since house loans are long-term loans, so EMIs can financially burden you. However, loan companies provide special programs for government employees.
The new policy allows EMIs to be paid until you’re 75 years old. Such benefits are open to any government employee, whether employed or retired.
Some loan companies let you design your repayment plan based on your income and expenses. They naturally help you make more manageable monthly payments.
Zero Processing Charges
To be eligible for a home loan as a government employee, you need to meet the government employee’s eligibility requirements.
Furthermore, certain financial institutions offer government employees rapid home loan approvals and waive processing fees. Also, you may be able to obtain a loan with a low-interest rate and flexible repayment terms without draining your finances.
Easy Formalities and Paperwork
Government employees are eligible for many benefits, not only concessional and low-cost home loans, but now government employees can apply full-time online and only need to submit a few supporting documents. This significantly reduces the time it takes to approve a request and release funds.
Discounted Interest Rates
You should look for a low-interest loan on your home mortgage to minimise costs. You may be able to save even more as a government employee because lenders offer you advantageous interest rates that help you save more money.
Not only this, a woman who works for the government receives a 0.05% lower interest rate on a home loan than a male colleague. These incentives encourage government employees to apply for home loan.
The decision to take out a home loan is big and shouldn’t be taken lightly. Various banking and non-banking financial institutions offer different interest rates for home loans, so you can decide which loan is right for you using the home loan EMI calculator.
Higher Advance Corpus
Besides providing housing loans to government employees, the government has initiated the House Building Advance (HBA) initiative, which enables them to finance the construction of a new home.
Government employees once were allowed to borrow as much as INR 7.5 Lakh for house building and INR 1.8 Lakh for expansion. However, new regulations now permit borrowing up to INR 25 Lakh for building and INR 10 Lakh for expanding.
Joint Loan Benefit
Generally speaking, if you and your spouse are government employees, you can receive housing loan benefits separately. For example, you and your spouse may apply independently for HBA benefits to build a new home together.
The Bottom Line
Since purchasing a house is a significant financial commitment, it is advisable to carefully review all of the elements involved in the process before applying for a house loan. While working for the government, you get a lot of advantages.
Various financial organisations offer you perks like larger loans, House Building Advances, low-interest rates, no application fee, and more extended payback periods. Government employees can participate in this program and apply the funds toward home purchases.