Home loans are the cheapest lending product-SLB

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Bereng Mpaki

HOME loans are among the most affordable loan schemes in terms of interest rates that an applicant can get from a bank, Standard Lesotho Bank (SLB) has said.

SLB home loans manager Azael Makara said the bank offers a home loan facility to eligible customers across all segments (from lower to high income earners).

Mr Makara said home loans are among the most affordable loan schemes in terms of interest rates that an applicant can get from a bank.

Among some of the benefits of getting a home loan is their long-term repayment period and the small premiums that are spread over a long time.

The home loans can be paid over a 20-year period or alternatively, one can choose to service the loan over the remaining number of years before their retirement.

According to Mr Makara, it is advisable to invest one’s lump-sum for future commitments or for pension and secure a home loan facility while still having the repayment ability so that in future, one will have both a house and the lump-sum to spend while on retirement.

SLB home loans offers two products namely ordinary home loans and fully guaranteed home loans.

The offerings under ordinary home loans are building loan, home improvement, purchasing loan, access bond and equity release.

The primary requirements to access the home loan facility is the lease and the maximum repayment period is 20 years or the remaining period before retirement. Other requirements under the building loan/home improvement are:

  • Properly designed plan.
  • Building permit.
  • Contractors’ quotations (including traders licence, income tax clearance certificate, licence from ministry of works).
  • Proof of income.
  • Identity document.
  • Confirmation of employment.
  • Down payment.
  • The builder should provide an audited set of financials and credit reference (if necessary).

Purchasing loan requirements are:

  • Deed of sale drawn by the attorney.
  • Proof of income.
  • Identity document.
  • Down payment.

Access bond requirements:

  • Existing home loan.
  • Proof of income.

Equity release requirements:

  • Proof of income.
  • Identify document.

Fully guaranteed home loan – this offering affords clients an opportunity to build their homes in urban, peri-urban and even rural areas.

The bank also offers insurance cover for all home loans clients and these are:

  • House owners cover – to cover the house against fire and any natural disaster.
  • Mortgage protection cover – to cover the debt in the event of the death of the mortgager or the spouse. Insurance should clear off the debt.

For informally employed persons, the home loan facility application may be considered depending on its merits and sustainable source of income.

Mr Makara indicated that the enquiries about the home loan facility can be obtained in all SLB branches across the country. However, applications are currently being processed by the Home Loans Department in Maseru. He advised that arrangements are now at the advanced stage to upskill the branch network to process the applications at source.

Mr Makara dispelled the general perception that financing a home loan through the bank is too expensive. Instead, he said a home loan facility is the most affordable lending product in terms of interest rate considering that it is asset based secured lending.

“The home loan facility is a long-term loan as a result the loan entitlement for a home loan compared to other lending products is much higher and the instalment more affordable,” Mr Makara said.

Many people miss the chance to build their dream homes due to lack of critical information about the home loan product. The bank organises regular customer interactions to create awareness about the product and its benefits.

“However, we were not able to do it in 2020 due to the Coronavirus (Covid-19) pandemic as we had to observe the Covid-19 protocols.”

SLB introduced the home loan offering in August 1999 and so far, the general market response has been positive.

“Our business is picking up year on year and we have been consistently exceeding the set targets.”

According to Mr Makara the drivers behind the success are aggressive marketing strategy, regular stakeholders’ engagements and continuous review of business initiatives.

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