The Hindu Business Line : BHW Birla offers home loans at 7 per cent

AT a time when home finance companies were talking of interest rate hikes, BHW Birla Home Finance Ltd, a subsidiary of German major BHW Holding, has come out with a product that offers an effective interest rate of 7 per cent.

The company claims that it is able to offer a rate, which is at least 50 basis points lower than its rivals by uniquely structuring the loan. The borrower pays a slightly higher amount in the initial years, which is later applied towards principal, as against traditional home loan companies, where a bulk of the initial payment goes to service interest. The `Easy Fixed Plus' scheme rides on the company's `Easy Home Loan Deposit' (EHLD) scheme that allows a prospective borrower to save money for a future home, according to a senior company official.

Under the existing EHLD scheme of the company, any individual can start a recurring deposit with BHW Birla at 5 per cent rate of interest. After a certain `target amount' is reached, the company would provide an equal amount as loan with minimal amount of paperwork.

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