The pre-approved auto and home loan offers a credit line to customers before making the actual purchase of a house, an apartment or a car.[break]
“It means a borrower can approach us and get a credit of certain amount approved before purchasing a house or a car,” NIC Bank CEO Sashin Joshi said at a press meet held on Thursday in Kathmandu. “This offers flexibility to customers as they don´t need to visit the bank time and again after making the selection.”
Such credit line can be obtained within five to seven days of submission of details on fixed income sources. “No securities need to be pledged while applying for the credit,” Joshi said.
But the credit line automatically expires after 90 days if the customer is unable to make the purchase. No additional charges will be levied in such cases, Joshi said, stating, the new product has added a new paradigm to the consumer financing sector.
Another product introduced by NIC Bank on Thursday was called Auto Balloon Financing, which gives the leeway to the borrower to split the loan amount into two portions. This scheme applies only to auto loans.
Under this scheme, a borrower, who wishes to purchase a car of Rs 1 million, for instance, needs to first ascertain the down payment amount.
If the bank is willing to finance 70 percent of the loan for a period of, say, five years, then the borrower needs to make a down payment of Rs 300,000. For the rest Rs 700,000, the borrower can choose to pay 70 percent of the amount in equated monthly installments and the remaining 30 percent in a lump sum at the time when the tenure ends.
“For the rest 30 percent amount, the customer can also choose to make annual payments during the times when they make windfall gains or receive bonuses,” Joshi said. "No prepayment charges will be slapped if the payment is made in advance."
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