I haven’t decided on the property yet, can I still apply for a home loan?
You can apply for a Home Loan even before you have selected the property. Most lenders sanction pre-approved loans based on your repayment capability as per your income.
What are the various types of property Loans that are available?
Banks offers following types of home loans to cater borrower’s different needs:
• Home Loan
• Land Loan
• Top-Up Loan
• Home Improvement Loan
• Home Construction Loan
• Office Premises Loan
• Loan Against Property
• Lease Rental Discounting
• Balance Transfer of any above existing loans
What are the securities/ collaterals you need to provide?
Security for the loan is a first and exclusive charge of the property to be financed, by way of deposit of title deeds and/ or such other collateral security as may be necessary. The title to the property should be clear, marketable and free from any encumbrances.
Can I take a Home Loan for a property in one city while I’m working in another city or vica versa?
Yes, either the property or yourself should be based in the City where the home loan application is placed. For instance, a person based in Delhi NCR, but purchasing a property anywhere else in whole of India can apply thru any branch in Delhi NCR. Similarly, if the property is located in Delhi NCR but the person is working / based in another city anywhere in India, can apply thru any branch in Delhi NCR.
Is it necessary to provide a Co-Applicant?, if yes who can become a co-applicant?
Although a co-applicant is not necessary for a home loan application in most banks, you can add one to increase the loan eligibility or if the co-applicant is also a co-owner in the property. A Co-Applicant can be spouse or a first blood relative say father/son, mother/daughter etc.
My income is not sufficient to get the amount I need, can I add income of my family members?
Yes, Income of spouse, parents or son can be added to your income subject to their meeting age requirement.
Can I take 2nd home loan for buying another property?
Yes, you can have as many loans against different properties. The only criteria being that you should have the repayment capacity as per your income credentials
When is the processing fees payable?
The fees cheque is required to be given at the time of loan application. It is however sent for banking only after your loan sanction. In case the bank decides to disapprove the application or the sanction terms are non-favourable to you, the fee cheque alongwith other income papers are returned to you.
What is Pre-EMI interest?
Pending final disbursement, you pay interest on the portion of the loan disbursed. This interest called pre-EMI interest. Pre-EMI interest is payable every month from the date of each disbursement up to the date of commencement of EMI.
Can I start paying my EMI in case my loan is partly disbursed?
Yes, you can always go ahead with this option, in which your full EMI on the sanction amount will be charged to you. Of course, interest portion will be charged only on the partly disbursed amount & Rest will be Principal portion to be deduced from the partly disbursed amount on a monthly reducing basis.
Interest is charged on Monthly Reducing Basis. What does this means?
An EMI has 2 components: interest and principal, where the interest is calculated on a monthly reducing basis. This means that the monthly principal component is reduced from the main principal outstanding and then next month’s interest is calculated. This way, the principal on which the interest is charged goes down every month. This results in significant savings for the customer over the tenure of the loan.
What is the difference between fixed and floating home loans?
Banks currently offers two types of Interest Rate Scheme – Fixed Rate or Floating Rate:
• Fixed rate, as it suggests remains unchanged over the entire loan tenure irrespective of the economic conditions prevailing.
• Floating rate on the other hand is linked to the Bank’s Base rate, which is subject to change. It is a benchmark rate fixed by the Competent Authority, after taking into consideration various components like cost of funds, interest rates prevailing in the market, cost of operations and provisioning requirements etc. among others. Floating rate is arrived at by adding a Margin to this Base Rate. The Margin remains fixed during the entire tenure of the loan, the Base Rate is however subject to changes as per RBI guidelines and other Macro-economic factors.
What happens when there is a change in Floating ROI?
Tenure change is the default option. From customer ease point of view, we understand that Tenure change remains the preferred method, but wherever required we might change EMI, we will intimate you on the necessary change in your EMI.
However, if you are not Ok with the tenure change, you can contact any of our home loan branches for further info on changing the EMI.
You can also consider a part-payment, at no additional cost or charges.
Can I convert my floating rate loan to fixed rate loan or vice versa?
Switching from the Floating rate scheme to the Fixed rate scheme and vice versa is permissible. If a fixed rate customer wants to reschedule the loan to a lower interest rate, the same is also permissible. Charges for changing from fixed to floating rates of interest: Min. Rs. 5000 or 1% of the outstanding amount whichever is higher.
Can you get IT certificates in the name of both the applicant and co-applicant separately?
As per IT rules, only one certificate can be issued for a Home Loan hence one certificate will be issued in the name of both the applicant and co applicant.
What kind of Tax Benefit does an individual get while applying for a Home Loan?
As a home loan borrower, you also enjoy Tax Benefits on both Interest paid & the Principal re-paid as follows:
• Interest – Under Section 24(d) of Income Tax, the deduction of interest payable on the home loan is upto a maximum of Rs. 1,50,000/-
• Principal – Under Section 80(c) of Income Tax, Principal amount for the repayment of loan along with other savings & investments is eligible for tax deduction up to a maximum limit of Rs. 1,00,000/-
Can I repay my loan ahead of schedule?
Yes, you can pay your loan ahead of schedule, anytime you want to. You are can either choose to reduce the EMI or the tenure or a combination of both.