Considering the fact, that most of the people want newer and faster methods to finance themselves to be able to buy or construct a house to live in, no wonder the home loan market has developed and emerged as quite popular, in the last two years. Apart from the reduced property prices and interest rates, the teaser loans attached with the home loans and offered by the public sector banks (PSB) are the major reasons for the increased interest in home loans.

What are Teaser Loans?

The teaser loans come with interest rates that are not only fixed but also small in the first few years. Basically, these low fixed rates offered by PSBs vary from 8-8.5% for the first 3-5 years. When the mentioned period is over, the rates revert to the normal floating rate.

Benefits:

• A lot of customers are going for such effective rates from PSBs, while considering the factor of convenience and comfort, which help the borrowers to stray off the potential financial emergencies that could result from failure to pay back the loans.

• Also, the PSBs are more responsible in taking care of their customers, since they reduce their rates that ease up the overall burden of the floating rate product that comes after the teaser product. This benefit is never found in case of private sector banks, and thus customers usually make a beeline for PSBs to have access to such options.

Tips to Keep in Mind:

• It is important to remember that PSBs are basically better suited when you are buying a ready-made apartment from a builder based on the factor of reputation. Documents are never a big issue here. So in this case, when you are buying a resale or a very old property, you will run across problems.

• Since, with PSBs, loan eligibility is never a big concern, you had better check your other options again, if the total amount of loan required is significant.

• You will have to constantly keep visiting the banks to get the entire deal sealed, and unless you are willing to make the effort to be able to do it, you should not go for public sector banks, based on a whim.

But overall, PSBs are the ideal options you can use for home loan, since they offer the security and comfort that a borrower needs. You will have adequate time to pay the loan off, without having to deal with the high pressure of meeting the demands of high rates of interest.