Citibank launches new home loan scheme

Citibank has launched a "5% cash back" home loan scheme which offers borrowers an additional loan amounting to 5 per cent of the loan amount. The interest rate on the additional loan will be 75 basis points higher than the applicable home loan rate.

"For lower ticket home loans, the additional loan facility will differentiate the product in the home loan market, which is growing at 30 per cent annually," said Sameer Kaul, mortgage sales director, Citibank India.

The additional facility is at a much cheaper interest rate as normally a home loan borrower would source such requirement at very high rates. The additional facility is more like a home loan, he said.

Citibank will give the additional loan in a single payment following the full disbursal of a home loan. Borrowers are free to use the additional loan at his/her discretion.

Citibank Cash Back Home Loan will provide customers that additional liquidity for requirements like purchase of fixtures, fittings, furnishing and modifications, or for household appliances.

Kaul said the new product will help Citibank achieve the target of doubling its market share in home loans to 7-8 per cent from the current 3-4 per cent over a period of about 18 months. During January-November 2005, the bank disbursed about Rs 3,000 crore of home loans.

Citibank offers home loans at floating interest rate of 7.5 to 8.5 per cent and at fixed rate ranging from 7.75 to 8 per cent.