Frequently Asked Questions
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Frequently Asked Questions
1. What is a Home loan?
Home Loan is a Secured loan offered against the security of a house/property which is funded by the bank’s loan, the property could be a personal property or a commercial one. The Home Loan is a loan taken by a borrower from the bank issued against the property/security intended to be bought on the part by the borrower giving the banker a conditional ownership over the property i.e. if the borrower is failed to pay back the loan, the banker can retrieve the lent money by selling the property.
2. What will be the process?
You need to submit the application form along with the necessary documents. The bank, after going through your application will review it, ask questions wherever necessary and will also informally tell you the loan amount you are eligible for and the terms and conditions of the same and put across its decision to you.
3. What is the right time to apply a home loan?
You can for apply for home loan at anytime. You may apply for it after you have decided to acquire/construct a property, and even in case, the property has not been selected or the construction has not commenced, you can still apply. What's more, you can also avail for Home Loan facility if you want to renovate or expand your home.
4. How bank calculate my eligibility?
Your home loan eligibility is determined by your repayment capacity, taking into consideration, factors such as: Your:
- • Income
- • Qualifications
- • Age
- • Spouse's income
- • Family members earning
- • No. of dependants
- • Stability and continuity of occupation
- • Assets/Liabilities
- • Savings history
The most important concern of banks in determining your loan eligibility is that whether or not you are contentedly able to pay off the amount you borrow.
5. It takes how many days?
It takes around two weeks for processing of one's application if all the necessary documents are in order and takes another week for the bank to inspect the property papers and make the disbursement.
6. Home loan documentation
Each bank has its own list of home loan documents that one must submit at the time of application. The common documents that the banks require at the pre-approval stage are:
- • Passport size photograph.
- • Proof of Age.
- • Copy of Bank A/C statements for the last 6 months.
- • Copy of latest credit card statement.
- • Signature verification from your banker.
7. If you are self-employed you require:
- Your business track record.
- Copy of audited financial statements for the last 2 years.
8. If you are salaried, you need:
- • Salary and TDS certificate
- • Latest pay slip.
- • Letter from employer.
9. And at the disbursal stage (for property already located), you need to submit the following:
- • Allotment letters.
- • Photocopies of title deeds.
- • Encumbrance certificate.
- • Agreement to sell.
10. For self-construction:
- Approved plans and clearance certificates along with estimates.
1. When can I avail a Loan against my property?
You can avail a loan against your property to fulfill your financial requirements such as business expansion, your childs higher education, marriage of your child, any unforeseen medical emergency or even for holidaying abroad
2. How do Banks / NBFCs determine eligibility for availing this loan?
The Banks / NBFCs generally take into account the following factors to determine the eligibility for a loan against property:
- • Age
- • Income
- • Co-applicant's income (if applied jointly)
- • Financial documents
- • Liabilities
- • Property valuation
- • Number of dependants
- • Stability/Continuity of employment/Business
3. What is the maximum amount of loan that I can get against my property?
You can get a loan against property up to 70% of the property value depending on the Bank / NBFCs policy and the property type and valuation
4. Can I apply jointly?
Yes, you can apply jointly with a co-applicant. The co-applicant must be from your immediate family (viz. Spouse, Father, Mother or Brother). By applying jointly, you can increase the loan amount required
5. What is the security that I need to furnish to avail this loan?
The property should have a clear title, it should be marketable and free from encumbrance. There should not be any existing mortgage, loan or litigation on the property. In case your property qualifies the mentioned criteria, the following documents are required to create a mortgage:
- Title deeds of the property.
- Other property related documents, if any
6. Can I prepay my loan?
You can choose to repay the loan even before loan tenure is expired but for this you will be charged with a foreclosure fee depending on the Bank / NBFCs policy
7. How much time do the Bank / NBFC take to disburse the loan?
The disbursement of loan depends on your profile and documentation. It generally takes between 7 to 10 days for the loan to be disbursed once all the documents are submitted.
8. Can I transfer my already running Loan against property?
Yes, it is possible. There are various schemes available from different Banks / NBFCs for the same
9. How can I repay my loan?
The repayment of loan is done through EMI (Equated Monthly Installments). It can be paid through Post Dated Cheques (PDCs) or Electronic Clearance System (ECS) from any account approved by Reserve Bank of India.
FAQ's on Personal Loans
1. What is a Personal loan?
A Personal Loan is an unsecured loan which is approved without any form of a security or collateral. That is you do not require using your house, property or assets as a guarantee to get the loan approved. Normally, the bank does not ask for guarantors either. Minimum documentation, swift approval and no probing on the purpose of Loan are the other benefits.
2. What can I use a Personal Loan for?
Personal Loans can be used for any purpose. No matter how big or small. Usually, people avail Personal Loans to fulfill personal needs ranging from as big as one’s wedding, to as tiny as buying a new laptop.
3. How do I apply for a Personal Loan?
Applying for loans is easy. You can easily apply for Personal Loans online after checking out various schemes on offer with different banks. Also, ensure to read the eligibility criteria and the documents required to submit before you apply.
4. How is my Personal Loan Eligibility determined?
Eligibility Criteria varies across different banks. Primarily, these criteria aim to acquire whether or not you are capable of paying the amount back. It is advisable you go through the eligibility criteria imposed by the bank you choose.
5. What is the maximum tenure of a personal loan?
Personal loans are intended to be short tenure loans. Most of the banks provide Personal Loans lasting 12 to 16 months.
6. How much is the maximum amount that I can avail?
This again varies across different banks. The basic factor though, is your ability to repay. The bank would like that the installment you pay should not exceed more than 30 to 40% of your income or 2-3 times of your income tax return. Please check under the Personal Loans section for details.
7. What are the fees and miscellaneous charges applicable and when are they payable?
Apart from the rate of interest banks usually charge fees of two types: Processing Fee and Prepayment Penalty. Processing Fee is paid when you apply for the loan while Prepayment Penalty is paid near to the end of the payback tenure. Both of them are charged at 2-3% of the loan amount.
8. What is the rate of interest that will be charged on my loan?
Various banks offer various Interest Rates and usually it ranges from 14%-26% depending upon your profile and the scheme you opt for.
9. How soon can I get my loan amount?
Usually banks approve Personal Loans within seven working days. However, delay or fault in documentation, especially the post dated cheques (PDCs), can lead to needless postponement. The amount is disbursed only after all the necessary documents have been verified.
10. Can I apply for loan, jointly with my spouse?
Yes. Personal Loans can be applied jointly. The co-applicant could either be your spouse or one of your parents. This helps in enhancing income eligibility, thereby allowing you to apply for a larger sum.
11. What are relationship discounts?
Banks offer relationship discounts to applicants having a personal account with them. These discounts are basically on the interest rates and the processing fee.
12. How do I repay my loan?
Before approving a Loan, Banks require you to submit Post Dated Cheques (PDCs) for each month during the payback tenure. The amount obviously equates to the EMI payable. The other option is ECS or Electronic Clearing System wherein, Banks deduct the EMI automatically from your linked account on a specific date each month.
