The Hindu : Karnataka News : A boon for the elderly

Online edition of India's National Newspaper
Tuesday, Nov 27, 2007
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Karnataka

Karnataka

A boon for the elderly

Staff Correspondent

DAVANGERE: The State Bank of India has introduced mortgage and reverse mortgage loans for senior citizens under which they can get loans against their property, including houses. The scheme has been introduced to ensure social security and economic support to senior citizens.

Elaborating on the scheme at a seminar organised by the Rotary Club and the Davangere Senior Citizens Forum here on Monday, G. Narasimha Murthy, Manager, SBI, said that the scheme intended to provide a source of additional income for the elderly who owned self-acquired property. The income would be supplementary and could be used for personal expenses such as medical services, purchase of a car or house repair.

A senior citizen could get 90 per cent of the total value of the property as loan, he said, and added that the loan amount ranged from Rs. 3 lakh to Rs. 1 crore at an interest rate of 10.75 per cent. A minimum processing charge of 0.5 per cent of the loan amount would be levied. The borrower/s does not have to repay the loan and will continue to stay in the house during their lifetime. The legal heirs can repay the loan and redeem the property, failing which the bank will sell the property and liquidate the loan. If there is surplus, it will go to the legal heirs.

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