What is the AGIF Home Loan?

There are different kinds of home loans in India, which cater to the different needs of the people. One such type of home loan that is perhaps lesser known and caters to the defence group is called the AGIF (Army Group Insurance Fund) home loan. If you are wondering what this type of home loan is, then this guide is just for you. 

AGIF Home Loan specifically caters to the housing loan needs of people employed with the armed forces, including those currently serving in the force and retired officers. This loan scheme is designed to help these individuals get financial assistance to build their own home, purchase a plot of land, buy a new house, or renovate their existing property. 

AGIF is an insurance organisation run by the Indian army that provides an AGIF home loan. As per the AGIF home loan mandate, this loan scheme is available for army personnel of all ranks, including JCOs (Junior Commission Officers) and Jawans who have served in the armed forces for minimum 5 years. 

 

How much of a loan can you avail yourself of under the AGIF Home Loan scheme?

The maximum loan amount you can borrow under the AGIF Home Loan scheme depends on your rank in the armed forces. The following table will give you a clear idea about the loan limit –

 

Rank	Maximum Loan Amount
Officer	Rs. 80 Lakh
JCOs	Rs. 35 Lakh
ORs	Rs. 30 Lakh

 

Important things to remember while applying for an AGIF Home Loan

• If you want to apply for a home loan under the AGIF Home Loan scheme, you can avail of the credit only once for building or buying a new home and once for carrying out home repairs. 
• Unlike other home loans in India available for ordinary citizens/civilians, when you apply for an AGIF Home Loan, you do not need to pay any processing fee. That can greatly lower your overall borrowing cost. 
• The maximum repayment duration offered for AGIF home loan is 20 years. And, if you have the loan for home repairs, the maximum repayment tenure is five years. 
• You can repay the AGIF home loan with easy EMIs (equated monthly instalments). However, if you have any surplus funds available, you can use them to make part prepayments. This will help you pay off the loan sooner than the actual tenure. However, you must know that you can make part payments only twice during the loan tenure. 
• If you are serving in certain armed forces like the Army Postal Service or the Territorial Army, you are not eligible to avail home loan under the AGIF Home Loan scheme. 
• If you avail yourself of the AGIF Home Loan to buy your home, you get the funds in three instalments. The first instalment is given at the time of laying down the foundation of the home. The second instalment is given when the roofing work is completed, and the third and final instalment is given to complete the plastering and other finishing work. 

 

Benefits of AGIF Home Loan

If you are employed with the armed forces, then as an armed force personnel, you can avail of the AGIF Home Loan to make your dream of being a homeowner come true as well as enjoy its other benefits, including:

 

• Competitive interest rate

When you apply for any kind of home loan, the interest rate is one of the most critical factors to consider, as it directly impacts the EMI. The AGIF loan interest rate is quite competitive, and compared to other loan schemes available in the market, they are quite affordable. Typically, the home loan taken under the AGIF loan scheme for constructing a new house attracts an annual interest rate of 7.15%. 

If you take a second loan to renovate your home, the interest rate would be 8.15% annually. However, you must know that the actual interest rate may vary from one lender to another based on their internal policies. Also, the interest rates are calculated based on your credit score, repayment capacity, and loan amount. 

 

• No hidden charges are involved 

The AGIF home loan scheme does not involve any hidden charges. As a borrower, you can be assured that there is complete transparency, and even if you have no prior experience with taking a loan, you can easily understand the loan terms. 

 

• Zero prepayment charges

You can easily prepay your home loan taken under the AGIF scheme without worrying about any penalty charges. Thus, if you have any additional funds, you can use them to pay off the loan faster and get valuable savings on the interest payments. 

 

• Quick approval

The application and approval process for the AGIF Home loan is quite easy and quick. As a borrower, if you comply with all the documentation processes, you can get the loan sanctioned and the disbursement in as quick as three weeks. 

 

Conclusion

The AGIF Home Loans scheme is an excellent option for you, as an armed forces employee, to get financial assistance to buy or construct a new home. You can get the loan at an an affordable interest rate, get a high loan amount based on your rank in the force, and also repay the amount over an extended period in comfortable EMIs and without any prepayment charges. 

However, you must meet all the eligibility criteria to get the loan and understand the loan terms and conditions before applying for it.