Popular private sector lender Axis Bank, has on April 2, 2013, launched a dedicated home loan scheme for people who are self employed. To begin with, the bank is offering loans at one percent above the base rate and the borrowers will pay higher than the ones in the salaried class, but lower than the ongoing rates in the market.
Jairam Sridharan, the head of Axis Bank for consumer lending and payments said, “The self-employed category is definitely riskier than the salaried class. However, we have a clause under which prompt payment will reduce the interest outgo and get a self-employed borrower at par with a salaried one in five years”. Sridharan added that the initial rate for such borrowers will be at 11 percent.
At the end of the second, third and fifth year, the interest rate will get reduced by 0.25 percent each in three phases. He also said that 0.25 percent will be reduced over the base rate, a self employed person will be equal to a salaried borrower by the fifth year.
Sridharan also said that the bank is primarily targeting traders and small businessmen. It was also revealed that more than half of the country is self employed and this segment also faces difficulties in getting bank loans, which forces them to approach the NBFCs and pay higher interest rates.
