You are a professional, a consultant, or a small businessman. You don't have a salary slip or income-tax returns document to show you are earning some kind of income to keep the home fires burning.
Result: Few people will be willing to lend to you.
Birla Home Finance seems to be the one answer to your prayers -- though you will have to wait a bit.
A 50:50 joint venture of Rs 4,500-crore (Rs 45 billion) K K Birla group and BHW Holding AG of Germany, Birla Home's Easy Home Loan Deposit Scheme is targeted at small businessmen, traders, shopkeepers and factory workers who normally do not file income-tax returns.
The scheme works by first getting you to make deposits before entitling you to a loan.
Launched recently in seven cities, EHLD requires a member to save on a monthly/quarterly basis, or even make a one-time lump-sum deposit, for a period of three to five years at 5 per cent compound interest.
Any individual in the age group of 18 to 54 can become a member of the scheme. Membership can also be taken jointly by a maximum of three persons.
After the completion of the specified tenure, a member is entitled to a home loan at 7 per cent interest on an annual reducing balance basis for the purchase or construction of residential house property.
The loan offered to the member would be equivalent to the value of the member's savings, plus interest.
If a member deposits Rs 952 per month, the total savings at 5 per cent compounded interest will be Rs 50,380 at the end of the fourth year.
The member can avail himself of an equivalent amount as loan with a repayment period of four years and three months.
At the rate of 7 per cent interest on annual reducing balance, the equated monthly installment would be Rs 1,186 for the loan tenure.
The scheme also offers a facility for transfer/nomination as per the member's instructions.
Those who don't want a loan at the end of the saving period can take their money back with a one per cent bonus interest in addition to the 5 per cent agreed rate.
"Normally, it is very difficult to get a housing loan if you are not an income-tax assessee. Our product is meant for those people who will never get a home loan," says Sanjay Khosla, general manager (sales) of Birla Home Finance.
"We will be inculcating the savings habit among members during the savings phase. The member's ability and willingness to save will be tested in this period. If the member is successful in doing that, loan repayment would not be problem," Sanjay said, explaining the logic behind the launch of the scheme.
Currently, the company has 10 branches and 16 satellite centres across the country and plans 36 more satellite centres in the current fiscal.
Your payback
The essence of this scheme is to extend loans only to people who show the discipline of saving -- in the absence of salary slips and other documents showing tax payments.
It is ideal for small businessmen and people who draw informal incomes from various sources.
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