Pre-EMI interest waiver lures buyers

Several builders in the city are coming forward with ‘pre-EMI interest waiver’ schemes to attract buyers and to beat the glut in housing sector. Usually, once the bank disburses the loan, the pre-EMI interest has to be borne by the customer. This adds to the financial burden of the customer who may already be paying a high rent for the place where he is staying. Builders are now volunteering to pay the pre-EMI interest on behalf of the customer till he or she possesses the flat. The EMI payment of the customer starts after possession. With sales of flats decreasing and prices showing little signs of cooling down, many builders such as Manjeera Constructions, Indu Projects, Aliens Groups and Parsvnath are offering such schemes to boost sales.

They have tied-up with banks such as ICICI, HDFC, IDBI, Axis Bank and Birla Home Finance for this. “Of the three categories--Rs 40 lakh and below, Rs 40 lakh to Rs 1crore and Rs 1 crore and above--the middle category is the hardest hit,” says Mr Yoganand, chairman and managing director of Manjeera Constructions Ltd. “We are concentrating on this sector.” He adds that the firm was giving customers of this category a two-year pre-EMI interest holiday. “With this, they can book the flat just by paying 15 per cent of the amount and take a bank loan for the remaining 85 per cent,” he adds. “And for the first two years they need not pay pre-EMI interest. After two years, when they get the property, they can start paying their EMI straightaway.”

Builders say such schemes have pushed their sales up by 10 per cent to 25 per cent and are also enabling them to finish projects at a faster pace. Buyers are also finding it attractive since interest rates of housing loans have risen to 12 percent from the earlier seven percent. “This will help reduce the burden on customers,” says Mr D. Kiran Kumar, marketing manager of Parsvnath Developers.