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Thursday, 20 August 2015

HSBC - Home Loan, Smart Home

HSBC's origins in India date back to 1853, when the Mercantile Bank of India was established in Mumbai. The Bank has since, steadily grown in reach and service offerings, keeping pace with the evolving banking and financial needs of its customers. 

In India, the Bank offers a comprehensive suite of world-class products and services to its corporate and commercial banking clients as also to a fast growing personal banking customer base.

Home Loans :


The Hongkong and Shanghai Banking Corporation Limited, India (HSBC/the Bank) offer Home Loans and Loans Against Property at floating rate of interest. From time to time they also offer fixed rate for Home Loans and Loan Against Property for specific loan tenures.


Floating rate loans are linked to their Base Rate. Any change in Base Rate will impact the interest rate on your loan.This will have a corresponding impact on your Equated Monthly Instalment (EMI) and/or loan tenure depending on our prevailing policy.

Features :

Loan requirement - Loans ranging from Rs. 3 lakhs upto Rs. 10 crore

Loan tenure - Loans are available for tenures upto 20 years and for salaried customers up to 25 years.

Interest rate -  HSBC offer Home Loans at floating rate of interest. From time to time it also offers fixed rate for Home Loans for specific loan tenures.
Interest calculation

Below example highlights how the interest on your loan is calculated.

Note: Calculations for Rs. 25 lakh at an interest rate of 11.00% p.a. for 20 years. EMI is Rs. 26,165 which consists of interest and principal components as mentioned below:
MonthOutstanding balance (Rs)EMI (Rs)Interest (Rs)Principal (Rs)
Month 125,00,00026,16523,3562,809
Month 224,97,19226,16523,3302,835
Month 324,94,35726,16523,3042,861
Note: Rate of interest shown is for illustration and actual interest rate charged to your account may vary. Interest is calculated on daily reducing balance charged on monthly basis. As shown above, the interest for Rs. 25,00,000 at 11.00% p.a. for 1 month is Rs. 23,356. Monthly interest amount = [outstanding loan balance] x [rate of interest] x [no. of days in the month/no. of days in the year].
With effect from 1 July 2010, the interest rate on your floating rate loan is linked to HSBC's Base Rate. Any revision in the Base Rate would impact your interest rate. For further details on the Base Rate and its impact on your floating rate loan.

Fees & Charges :

Processing fee :


A total of 1% of the loan amount sanctioned or Rs. 10,000, whichever is higher, will be applicable as Processing Fee (plus service tax). 
The fee is collected in two parts: Rs. 5,000 + Service Tax is to be paid upfront along with the loan application and the balance Processing Fee amount + Service Tax is to be paid before disbursal of the loan. Processing Fee paid is non-refundable.
Pre-payment charges
For Home Loan and Smart Home (floating rate)No pre-payment charges
For fixed rate Home Loan as below*
Up to 25% of the loan amount sanctioned in every financial yearNil
For amount more than 25% of the loan amount sanctioned in every financial year3% of amount prepaid

* Prepayment is permitted after a minimum of 6 months following disbursal of the loan. The prepayment charges mentioned above shall be applicable during the fixed rate tenure of the loan. In case of the loan switching to floating rate, prepayment charges will not be applicable.


Smart Home :

A home loan that enables you to save on interest payments and thereby reduce tenure of the loan

Your Smart Home is operated through a Smart Home account that acts as a Current Account with an overdraft limit equal to the amount of the loan disbursed. Your Smart Home account would be your loan account.

All you need to do is to put your usual savings, in the Smart Home account. Depending on the savings you put in the Smart Home account, you can reduce the quantum of interest paid and thereby reduce the tenure of your loan.

The principal on which your loan interest is calculated, is the principal outstanding minus the savings you have deposited in your Smart Home account every month, over and above your Equated Monthly Instalment (EMI).

Features :

Loan requirement - Loans ranging from Rs. 5 lakhs upto Rs. 10 crore

Loan tenure - Loans are available for tenures upto 20 years and for salaried customers up to 25 years.

Interest rate - Floating rate. Fixed rate is not offered for Smart Home.

How Smart Home works


Your home loan interest is calculated, on the principal outstanding minus the savings deposited in your Smart Home account every month, over and above your EMI.

The below table and graph show the potential reduction in interest amount payable by depositing an additional amount of Rs. 15000 in your Smart Home account over and above your EMI over 20 years. You can save more by depositing a higher amount in the Smart Home account.
Loan DetailsNormal HomeSmart Home
Loan Amount (Rs.)5,000,0005,000,000
Interest Rate* (p.a.)11.00%11.50%
Original Loan Tenure20 Years20 years
EMI (Rs.)51,60954,083
Actual EMI's Paid240126
Total Interest (Rs.)7,386,2613,686,716
Savings in Interest (Rs.)3,699,544 (50%)

* Interest rates are merely indicative and can change from time to time.

HSBC Smart Home Graph

Note: The above table and graph are based on interest rates which are subject to change, and which may not apply to your loan. The computation is based on simulated figures and a number of underlying assumptions. Please consult your Relationship Manager/or visit the nearest branch to ensure that you receive complete information about the options available to you.
Interest calculation

Below example highlights how the interest on your loan is calculated
Note: Calculations for Rs. 50 lakh at an interest rate of 11.50% p.a. for 20 years. EMI is Rs. 54,083 which consists of interest and principal components as mentioned below:
MonthOutstanding balance (Rs)EMI (Rs)Excess deposit (Rs)Interest (Rs)Principal (Rs)
Month 150,00,00054,08315,00048,6895,248
Month 249,94,75254,08315,00048,4905,299
Month 349,89,45354,08315,00048,2895,351
Note: Rate of interest shown is for illustration and actual interest rate charged to your account may vary. Interest is calculated on daily reducing balance charged on monthly basis. The above calculations are made assuming a monthly excess deposit of Rs. 15,000 over and above the EMI. Monthly interest amount = [outstanding loan balance – excess deposit] x [rate of interest] x [no. of days in the month/no. of days in the year].
With effect from 01 July 2010, the interest rate on your floating rate loan is linked to HSBC's base rate. Any revision in the base rate would impact your interest rate. For further details on the base rate and its impact on your floating rate loan

Eligibility and Documents Required :

Eligibility :

a.Minimum Net Income (Rs.)5, 00,000 p.a (salaried)
7, 50,000 p.a (self-employed)
b.Minimum Age (in years)21
c.Maximum Age (in years) on maturity of loans58 (salaried)
60 (public limited/government employees)
65 (self-employed)
d.Minimum Loan Amount (Rs.)300,000
e.Maximum Loan Amount (Rs.)10,00,00,000
f.Maximum Tenure (in years)20 years. For salaried applicants 25 years.

Documents Required :

  • Proof of Identity(PI)
  • Proof of Present Residential Address (PRA)
  • Proof of age

Financial documents

         1. Salaried individuals -           


  • Latest 3 months' salary slips showing statutory deductions.
  • Bank statements for last 3 months showing last 3 salary credits.

       2. Self-employed individuals    

  • Acknowledged IT returns for last 2 years (including e-acknowledgement).
  • P&L account, balance sheet certified/ audited by a CA and computation of income for last 2 years with all annexures and auditor's report.
  • Primary bank account statements for last 6 months.
  • For Partners of the partnership firm, additionally Partnership Deed is required.
  • For Directors of the Private Limited companies additionally required :                          - Shareholding Pattern or Memorandum and Articles of Association duly attested and the  list of Directors.

       3. Consultant / Self-employed Professionals                            

  •  Acknowledged IT returns for last 2 years (including e-acknowledgement) 
  • P&L account, balance sheet certified/audited by a CA and computation of  income for last 2 years with all annexures and auditor’s report.
  • Primary bank account statements for last 6 months.                                                                                           

HSBC's 30 Day Service Pledge :

The Service Pledge offers a 30 day free look and cancellation period to all individual customers for retail banking and wealth management products purchased from them.
From 16 September 2013 to 31 December 2015, for the eligible products purchased from HSBC during the program period, the customer is entitled to exercise the right to terminate or withdraw from these products within 30 days of the purchase, if a customer changes his mind. He will be given a refund or waiver of charges and fees received by the bank, which are related to the purchase of the product or early termination of the same.

    You may invoke the Service Pledge, pay the outstanding and close your loan within 30 days of loan disbursal; and they will refund the loan processing fee.


Help Desk :

In case of any questions or further information, please contact your Relationship Manager :

You can also: 
• E-mail - info@hsbc.co.in
• Call  PhoneBanking service : 1800 266 3456 or 1800 103 4722  

All grievance/escalations should be marked to:
The Manager, Customer Care Centre, The Hongkong and Shanghai Banking Corporation Limited, Rajalakshmi, No. 5 & 7, Cathedral Road, Chennai - 600 086



4 comments:

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