A Mumbai-based executive with a blue chip public sector corporate had just 5 years to retire. He was hunting for an appropriate housing loan scheme for buying a house in Pune for staying after retirement.

He wanted a higher loan than the amount what his remainder service was fetching him. Also, he wanted to have a lower EMI option.

He opted for a '50+ housing loan' scheme from IDBI Homefinance. The housing finance company offered him a loan of nearly Rs 19 lakh, when others had restricted the amount to just around Rs 10.75 lakh, based on his monthly salary of Rs 40,000.

The 50+ housing loan scheme also provided an avenue where his equated monthly instalments would be calculated considering the tenure of the loan as 10 years. The executive's EMI was set at around Rs 13,222.

The EMI would have been much higher at around Rs 22,000 if the tenure of the loan was taken as 5 years. The 50+ scheme considers the tenure of the loan as 10 years, but the outstanding principal on the date of superannuation is paid out of the retirement benefits like gratuity and provident fund proceeds.

If the borrower is entitled for a pension, IDBI Homefinance allows the outstanding loan on his reaching 60 years of age to be rolled over in part of full for another maximum term of 5 years. The borrower can be given the option of paying up say half of the outstanding loan on retirement and the remainder in EMIs.

IDBI Homefinance also works out a similar repayment package for persons who have opted for early retirement under a voluntary retirement scheme (VRS) and have taken up another employment.

The conditions attached for availing a loan under the scheme are:

• The borrower should have spent at least the last five years in the present organisation.
• The borrower should be employed in the managerial or senior managerial grades.
• The borrower has retired or taken VRS from a managerial or senior managerial position.

The tenor under the 50+ loan scheme is such that the borrower is not beyond 65 years at the end of the loan. Loans under the scheme can be taken for buying a new house or even for improvement or extension of the existing house.

Income calculation under the scheme is based on the details of present income and a statement from the present employer detailing the expected pension and/or superannuation benefits.

The terminal benefits, including gratuity and provident fund, are required to be at least 30 per cent of the proposed loan amount.

The current savings of the borrower in Public Provident Fund, National Savings' Certificates, National Small Savings scheme and other such instruments have to be at least 10 per cent of the proposed loan amount.