Kolkata, Apr 4 (UNI) Union Bank of India, Country's fifth largest nationalised bank, today launched a loan product, ''Union Reverse Mortage Scheme'', to enable senior citizens obtain monthly payment against home mortgage.
Announcing the country-wide launch, Bank's General Manager S L Bansal and Deputy GM S Govindan said the loan will be available only to home owners who are 60 years or more. It can be availed of jointly with the spouse, provided he/she is aged more than 55 years.
The rate of interest has been fixed at 10 per cent in the first five years.
The minimum amount of loan that can be availed is Rs one lakh and the maximum is Rs 50 lakh, depending on property valuation, Mr Bansal added.
Speciality of the scheme is there is no repayment obligations on the owner as the loan becomes due only on the death of the owner or the last surviving spouse. Unlike other loan products, there is no ''income criteria'' to be met for availing this scheme.
On the demise of the last surviving owner, the legal heirs have the right to repay the loan. ''If they do not wish to repay the loan, the bank will sell the property and set off the loan amount outstanding and surplus if any, will be given to the legal heirs,'' explained the general manager.
The maximum ''tenurr'' of the loan under this scheme is 15 years with a fixed ten per cent interest for first, five years which could later be determined on valuation of the property of that time.
For example, for a loan of Rs 10 lakh, the monthly payoff to the home owner on a ten-year loan will be Rs 4,880 and on a fifteen year loan it will Rs 2,410.
Mr Bansal said this product is quite popular in the West and a few banks in India have already started the scehme as it has predictably large market given the present social condition and nucleus family structure.
UNI PC PL SR DB1852