Ans.The first step is to apply online through quick apply, providing all required details like name, required loan amount, etc., The Bank would then process the loan. This involves verification of the details given by you. The Banks have their own field agents who physically verify the details given by you – such as your residence, place of work etc. and file their report. Once the report gives a satisfactory indication, the Bank would sanction the loan and arrange for the documentation. The documents will have to be signed in the Bank office or at the dealer’s premises, where the Bank has its desk. The Bank then arranges for disbursement of the loan amount directly to the dealer or the seller as the case may be. The margin, if any, will have to be remitted by you directly to the dealer or otherwise to the Bank, which will remit the full amount to the dealer.

Ans. It depends upon how correct the information given by the applicant is. If within the same city, the field inspection should be completed within a week at the maximum. It may be even less time if all the details given by you are easily verifiable and you have all the necessary documents available.

Ans. Lenders these days finance up to 95% of the cost of the vehicle. You can repay these loans in up to 84 installments. The amount of loan would include the value of the car with accessories, the first year’s Insurance Premium and One – time Road Tax. The higher amount of loan depends upon your bargaining capacity.

Ans. The first is the rate of interest. If you have a strong relationship with the Bank, you can bargain for a much reduced rate of interest. If you want a larger loan amount, you can ask for reduced margin or you can negotiate for a longer repayment period. You can also ask for your free personal accident insurance, as most of the Banks do have their arrangements with Insurance Companies. As the Banks have good relationship with the manufacturers, you may even ask for discount on the value of the vehicle.

Ans. Not always. If your credit is good and your income level is sufficient to cover the EMI, Banks do not insist on a guarantor.

Ans. There is no need that a co-applicant (can be called a co-obligant also) is to be proposed. If the Bank is not comfortable with your eligibility norms, or if the Bank is not satisfied with your credit ratings, you may have to go in for a co-applicant. The co-applicant can be your spouse or other close relative, preferably having independent income and satisfies the credit norms of the Bank.

Ans. Ans. Banks do not sanction more than 85% of the cost of property. You are required to mortgage the property for which the loan is being taken.

Ans. Interest is calculated on the monthly outstanding. As the interest is also paid along with the principal in the EMIs, the borrower does not have to make separate payment towards the interest which is debited to the account on a monthly basis.

Ans. Once the EMIs are fixed, Banks require the borrower to give them post dated cheques. For instance, if the term is 36 months, the borrower has to give the Banks 36 post dated cheques. He may also have to give one blank cheque, to be used by the Bank in case of dishonour of cheques or if the Bank feels that the security can get impaired. In case of dishonour of a cheque, cash for such amount should be deposited within the next 8 days along with additional charges as the Bank may prescribe. In case the borrower has a running account in the same Bank branch from which he has availed the loan, he may instruct the Bank for an automatic debit arrangement or ECS [Electronic clearing system] as it is called.

Ans. Yes. Banks do consider charging additionally in case the borrower wants to prepay the loan. The penalty may be of the order of 3 to 4 % of the prepaid amount. This again, varies from Bank to Bank.

Ans. Yes. Banks do finance for purchasing used cars. The terms of sanction are a bit stiffer than that for new cars. The Banks also insist on the vehicle being not older than around 5 years. The margin requirements are more which means, the amount of loan will not be the 85 % which Banks consider normally, it may be much less than that. Some conservative Banks consider a loan of not more than 50 % of the value of the used car.

Ans. Yes. For you to be eligible for a loan on your existing car, there should be no other loan amount outstanding on the car, nor should the vehicle be hypothecated to any other lender. The car should be of a recent model and most of all, your relationship with the FI should be satisfactory enough. Further, the vehicle should be valued by an approved valuer and the Bank may consider around 50 % of such valuation for the purpose of loan.

Ans. The repayments are made to the loan account on a monthly basis, as that is what EMI denotes. As and when payments are made, the principal amount stands reduced on a month to month basis. Interest is charged on the outstanding amount on a month to month basis.

Ans. In this case, interest is charged on the outstanding loan amount on a year to year basis. This system is not prevalent now.

Ans. EMI stands for Equated Monthly Instalments. The Equated monthly instalment has two components, one towards the principal and the other towards the interest. Interest, as is being indicated below, is charged on monthly reducing balance basis. The entire amount of principal and interest so calculated is divided equally into the number of instalments. The advantage in EMI is that the borrower knows exactly how much he is to pay every month throughout the currency of the loan.

Ans. The vehicle itself is the primary security for the car loan. In case of need, the FI would insist on additional security. All these securities will stand cancelled on closure of the loan.

Ans. When the last installment (EMI) is paid and no more dues to the financing institution are pending, the FI would send to you the form duly signed, addressed to the RTO where the vehicle is registered, indicating that the hypothecation indicated in the RC Book be cancelled. On submitting this form to the RTO along with the RC Book and other necessary documents, the RTO will cancel the hypothecation.

Ans. Property can mean any asset a person owns. Property again, can be movable or immovable. In this part, we look into immovable property. A person can take a loan or other types of credit facilities on the strength of the property. The property here is mortgaged to the lending institution either by way of equitable or registered mortgage. Again, the property can be offered as collateral security for other types of business loans. For businessmen, loan against property is a very advantageous arrangement. Such properties may not earn as much as if the amount were utilized in business.

Ans. The first requirement any lender would like to have is that the applicant has to have a reasonable source of income, either from his job or from business. Secondly, the property is to be in the name of the borrower or his spouse or immediate blood relatives. Properties in the names of others can be considered if there is a business relationship between the person borrowing and the person in whose name the property is registered.

Ans. A loan can be taken against any type of property provided it has clear marketable title. The property can be in the form of land, land with buildings, residential property, agricultural property, estates etc. Agricultural properties and estates are not preferred by lenders unless the loan is for purposes associated with such activities.

Ans. Yes. An ancestral property can devolve on all the legal heirs. Hence, if the property is not partitioned, all the legal heirs will have to be joint mortgagors for this property. Your grandfather will also have to sign the loan documents.

Ans. Yes. Many societies have rules laid in their by-laws for such eventualities. A No Objection Certificate has to be obtained from the Society before it can be offered as security.

Ans. Any person, in his own capacity as owner / borrower can avail a loan. A person who does not own property can avail a loan against the property standing in the name of another person, who would also have to guarantee the loan.

Ans. Loans can be sanctioned for both non –business / business purposes. Non business purposes can be towards medical expenses, daughter’s marriage, children’s higher education, renovation of house etc. Business purposes can be towards expansion of existing business, acquisition of other business, opening of new business etc.

Ans. Almost all the Banks offer such loans. Foreign Banks operating in India also offer such facilities. Banks find these loans less risky, particularly after the recent changes in the recovery proceedings.

Ans. The stages can be considered as: (a) apply online (b) verification of the authenticity of the information provided by the applicant (c) verification of details of the property / guarantor / title to the property (d) documentation and (e) sanction of the loan

Ans. Each Bank has its own terms for sanction of such loans. Broadly, Banks would be prepared to lend upto 75 % of the current market value of the property.

Ans. The documents required fall under two categories. The first category relates to the identity, proof of residence, proof of working, proof of salary in case of employed persons, tax returns for the last three years etc. If the applicant is a businessman, in addition to the proof of residence and identity, the audited working results for the last three years along with the relevant tax returns would be required. The second category relates to the property (immovable) for which, the title deeds, Encumbrance Certificate and other such documents are to be submitted. The Banks would go for a title clear certificate from a lawyer which should indicate a “clear marketable title” on the part of the owner of the property so as to let him create an equitable/ registered mortgage on the property. A valuation report from the Bank’s approved valuer is also required.

Ans. Both yes and no. It is yes, because one can get a higher amount of personal loan, which would otherwise not be possible. If the property is in one’s name, one does not have to go to others for help. Further, a loan secured by property is available for a reduced rate of interest than one not so secured. On the contrary, this loan, if for personal purpose, will be more expensive than other types of loans. For instance, if for business, a cash credit facility is always available at a reduced rate of interest than when it is taken as a personal loan.

Ans. In the case of monthly reducing balances, (otherwise called monthly rests), the lender charges interest on the outstanding amount month by month. If the interest and that month’s installment is paid in time, the borrower will have to pay interest on the reduced amount month after month. In other words, a borrower will have to pay interest only on the amount he is repaying every month.

Ans. As against the monthly reducing balances, if a lender charges interest with annual rests, the borrower also pays the interest as it is charged, only once a year. Nowadays, this system of charging interest is rarely seen.

Ans. There is no final and decisive answer to this. The interest rates are a function of the prevailing market conditions. If the loan is for a long period, and if the market conditions are not likely to see very volatile movement in the rates of interest, it is preferable to go for a fixed rate. But, on the other hand, if a lot of volatility is likely to be seen in the market, a floating rate would be preferable.

Ans. Once provisionally sanctioned, a loan will be disbursed as soon as all the required documents are submitted, necessary mortgage created and the documents executed.

Ans. The amortization schedule indicates the amounts payable by the borrower month by month or on a quarterly basis, as the case may be. It indicates how much of the EMI goes towards reducing the principal and how much is being appropriated towards interest. It also helps the borrower keep a track of the payments he is to make/ has made and how much is the outstanding.

Ans. Normally, the Banks would ask for PDCs .But as Banks do not issue a huge number of cheques to the customers, lenders would ask for PDCs for the next 24 months and ask the borrowers to replenish them with the next lot of PDCs, if the loan is for longer duration. Banks however, like to have ECS arrangements, if the borrower has his regular running account in the same branch from which he has availed the loan.

Ans. Yes. As long as the borrower has a healthy relationship with the bank, his credit has not had a down rating and the value of the property is sufficient to cover the loan, one can take loan on the same property any number of times.

Ans. Sticking to the loan repayment arrangement is one of the primary conditions of the loan. Any irregularity in this gives cause to the Bank to take legal action against the borrower / his guarantors. This also gives right to the Bank to proceed against the property, which, once established, can take the property permanently away from the hands of the owner.

Ans. A loan can be foreclosed either by the borrower or the lender before the loan runs its originally agreed term. A lender can foreclose the loan for fear of losing the security or if the outstanding amount is at a risk of being repaid. The borrower can foreclose the loan, if he wants to pay the remaining amount any day (usually after six months from the date of availment of the loan) In this case, the Bank would charge a nominal penalty for such foreclosure.

Ans. A person is released from all the liabilities when all the dues to the bank are paid, including the foreclosure charges.

Ans. No.

Ans. Business loans are usually given for:
(a) expansion of existing business
(b) additional working capital requirements
(c) acquisition of additional equipments / vehicles
(d) acquisition of other business units
(e) short term working capital needs etc.

Ans. All business concerns are eligible for such loans. The business may be run by a firm of partners, a private Ltd. Company, individual. It can also be of a self employed such as a practicing doctor, lawyer, Chartered Accountant etc. Banks generally consider the past history of the business, its success and profit rate, the purpose for which the loan is being sought, and if the loan, if sanctioned, will add to the profitability of the concern.

Ans. Business loans, if for small amounts, do not need to be additionally secured by property. The sanctioning and disbursement is done quite fast (many banks have a fast track sanction system). The documentation is also minimal. If the Bank is satisfied with the credentials of the business, they may even waive the requirement of an additional guarantee.

Ans. Each Bank has its own list of requirements. But, broadly, any business must have a minimum net income (profit) of not less than Rs. 1.50 lacs to qualify for a loan of say around Rs. 10.00 lacs. If the business is comparatively new, such requirement may be relaxed. If the loan amount sought is quite heavy, the income requirement will also have to be more than this level.

Ans. This depends upon the purpose for which the loan is being sought. If it is for working capital requirement, such a facility will be considered for a maximum period of 12 months. If for acquisition of assets, the loan can be repaid in installments over a period of 48 to 60 months.

Ans. If for working capital requirement, a business loan will be sanctioned as an overdraft. If an existing cash credit facility is available, the additional loan can be considered as an enhancement in the existing limit for a specified period. If the facility is for purchase of equipment, then the facility will be given in the form if a Demand Loan or a Term Loan as the case may be. Demand loans can be considered for very short terms.

Ans. The Bank will first have to be convinced about the legitimacy of such a requirement. In case the Bank is convinced about the genuineness of this, it would require the facility to be collaterally secured by immovable property.

Ans. Yes. Banks also consider unsecured business loans. But, as the name suggests, these are unsecured and Banks would not like to consider high limits under this head due to the inherent risk of the facility not being backed by any security.

Ans. Most Banks have their business loan applications online. Once an application is logged in, if the Bank is satisfied about the genuineness of the facility, would arrange for further discussion, arrange for a field agency visit, establish the identity of the person ( if new) and then proceed with the documentation and disbursement of the loan amount.

Ans. The idea of a Housing Loan is not new. In India, Life Insurance Corporation of India, had even forty years ago, started sanctioning housing loans (construction / acquisition). It was necessary for the borrower to take a Life Policy. In the event of the death of the policy holder during the currency of the loan, the proceeds of the Insurance Amount would go towards settlement of the loan amount outstanding. Over a period of time, the housing loans have assumed greater significance as both the demand for housing has leapfrogged and the Governments have also brought in housing into limelight. It is now accepted that the growth in personal wealth and that of the nation go together and housing plays a very significant part in this.

It has also been seen that not many can afford to buy a house with own resources. Even if own resources were available, it makes sense to make use of Housing Loan assistance and keep one’s resources in tact. Further, the requirements are not all of the same type. Hence the different forms housing loans can take are for (a) purchase of a constructed house (b) assistance for construction of a house (c) purchase of a flat or apartment (d) purchase of land (e) renovation, remodeling or even repairs to an existing house.

It is not just this. With a spew of organizations entering the Housing Loan Sector and their own variations of housing loan schemes, an aspirant has more than a handful to choose the arrangement most suitable to him. But, to get a Housing Loan, you should be eligible for the same.

Ans. Different lending organizations (Housing sector) have prescribed different eligibility criteria for those seeking housing loan assistance. As the facility is, very broadly, a loan to be repaid over a long period of time, the first thing a lender would ask for is the repayment capacity of the borrower. One’s earning comes from either his self employment or his employment outside. Irrespective of this distinction, one’s eligibility is primarily dependent on the continuity and scope of his/her income. For instance, an employed person has his income limited, while a self employed person can be in a very high income group.

Very broadly, the additional criteria can be listed as : (a) citizenship [ the applicant has to be a resident Indian or an NRI ] (b) age : The minimum age prescribed is 21 and the maximum age when the loan terminates should not be above 60 years.

Ans. Yes. The same person, if he is able to give proof that his income over the next years would increase considerably, would be eligible for a higher quantum of loan assistance. Or, if the person is getting married, with his/her spouse also has his/her own income, the income of both the persons can be clubbed and the eligibility increases correspondingly. In addition, the other savings, the value of other properties standing in one’s name, the outside liabilities as on date, the number of dependents and other commitments and preemptions would all influence one’s eligibility. The eligibility condition can also change if additional security is offered. You can get the details of eligibility in our website.

Ans. You should remember that a Housing Loan is a long term commitment. Hence a lot of thought should be given to one’s other personal commitments before going in for such a long term financial commitment. Having decided to go in for a Housing Loan, one has to look into the aspect of having the least expensive terms of the loan. This would involve an understanding of the costs involved. The main cost of any loan is the finance charge – otherwise called interest. The interest charges are discussed below. Please also log on to our website to have an overview of the rates of interest currently being charged by the different lenders.

Besides, the lenders charge processing fees (to evaluate your application and confirm the lender’s acceptance of your requirements and desire to finance you). Here again, different agencies have different yardsticks and one has to be quite careful in choosing this. The processing fees are upfront charges. Some lenders also charge a commitment fees to ensure that the facility sanctioned is utilized within the stipulated time. There again, is no uniformity in this. We can help you choose the correct loan package where the charges such as these are minimum, or at least, are absent. Further, the lenders always charge a pre-payment fees. This would be applicable in case one wants to pay off the loan much before the due dates. Some agencies do allow a part of the loan amount to be repaid, without invoking the pre-payment charges. The other charges leviable may relate to (a) documentation charges (b) registered mortgage charges etc.

In addition, one also has to look into the term of the loan. Normally, longer the loan term, the interest commitment would be running for a longer period. Although the loan tenure is determined by one’s current level of income and the growth in such income over a period of time, a reduction of the term by say, five years, would reduce the total interest outflow over the entire period. Hence, this requires a closer study of the interest structure.

Ans. The property to be purchased / repaired/renovated will itself be the primary security. The Lenders would ask for an equitable mortgage by deposit of the title deeds of the property in question. In the event of doubt, the banks would ask for a registered mortgage. The registered mortgage involves a lot more legal requirements than equitable mortgage. Besides, it is quite expensive. All other things being satisfied, the lenders would go for a maximum loan amount of 85 % of the cost. All such housing loans are additionally secured by a life policy taken on the borrower’s life. This would cover the lender against the risk of an unnatural death of the borrower before the last instalment is paid. In some cases, where the loan amount is considerably high, the lenders would insist on additional security in the form of Fixed Deposits, securities or even other personal guarantees.

Ans. Yes. Actually, the lenders would prefer to have co-borrowers, who have interest in the property. The most common type of co-borrowers would be the husband and wife pair. The lenders would relish if the husband – wife pair is on independent employment or if they are both independently self employed.

Ans. A sizeable saving in income tax is possible for those availing housing loans. The Income Tax Act recognizes both the principal and the interest payments as components eligible for tax rebate. Sec. 80 (c ) of the Income Tax Act allows a deduction from the taxable income ( Financial year 2008/2009) of upto Rs. 100,000 against the principal of a housing loan. Interest payable on a home loan (acquisition, repairs and renewals, construction etc.) would rank for deduction in terms of sec. 24 (b) of the Income Tax Act. The total amount of interest payment that can be claimed as deduction is Rs. 150,000 as the Act stands in the financial year 2008/2009. The total effect of these two provisions is that on availing a housing loan, an assessee need not pay tax on a total of Rs. 250,000 in case he has such qualifying loans. For an average tax rate of 30 %, the saving is of the order of Rs. 75,000 per year. These rebates are however, subject to a lot of conditions regarding occupancy, number of houses etc. For further details relating to the tax benefits, please log on to our website.

Ans. Housing Loans carry interest which is calculated on the monthly reducing balance system. In effect, the monthly repayment of principal would reduce the total liability and the interest is charged only on the remaining amount. Nevertheless, for ease of calculation and also for ease of planning for the borrower to earmark a specific amount from his monthly income, the lenders have opted for the Equated Monthly Installment System. The rate of interest in question can be fixed [here, the rate of interest is fixed once and for all for the entire duration of the loan] or floating [here, the rate of interest will keep changing as and when the market rates of interest go up or down]. Some lenders offer a compromise system involving fixed rate for a part of the loan and floating rate for the remainder of the loan. There is, as such, no fixed formula to identify which system is preferable. If the rates of interest have a tendency to keep on increasing, a fixed rate is beneficial. On the other hand, if the rates of interest have a tendency to keep volatile, the option would be a floating rate, where the higher and lower rates tend to balance out each other.

Ans. Simplest way to home loan is apply online through imoneykit.com quick apply. You are required to submit home loan application along with the supporting documents. The bank will go through the documents and inform you about its decision in due course of time. You are advised to shop around and check with more than one bank to get the best terms and conditions on your home loan deal. Tell us your requirement we choose the best deal for you.

Ans. Processing fees charged are varies from bank to bank. Normally it will be 0.5 to 1.5%.

Ans. EMI Formula: l x r [(1+r)n /(1+r)n-1 ] x 1/12
l = loan amount
r = rate of interest
n = term of the loan