BSL provides zero
percent housing loan
to the bank, standing orders
BSL Bank has launched a housing loan with zero percent cost to the borrower.
Charbel Watfa, Financial Controller at the bank, said: “Customers will be required to make a prepayment of 17.5 percent of the loan if the term is 30 years, and 20 percent if 25 years. They should also open a current account at BSL, and pay bills by standing order.”
Watfa said that like all banks, clients are obliged to pay the property owner 25 percent of the property’s price as a down payment.
The loan is offered in lira and at a ceiling of LL800 million ($533,000).
For example if the house value is LL400 million ($266,000), and the loan repayment period is 30 years, the minimum first payment to the property owner is LL100 million ($66,000). Prepayment to BSL Bank will be LL70 million ($46,000 or 17.5 percent of the total). Total amount to repay is LL230 million ($153,000), which is equivalent to LL638,000 ($425) per month.
Within this calculation, Watfa said that clients are repaying the loan they took at zero percent interest: “The total payment is equivalent to the apartment value without any added interest.”
“The reason for launching this product is to gain a larger market share,” said Watfa.
He said that although offering this product means the bank will only break even, it will help to attract a new clientele.
Demand has been high just a few days after the launch date, according to Watfa.
Date Posted: Jan 30, 2017