Home Loans Terms

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An Applicant and a co-application are mandatory. The spouse will be considered as a co-applicant. (His / Her income will be considered to enhance the loan amount). Further, if there are any other co-owners of the property against which the loan is sought, they too will need to be co-applicants.

• Salaried
• Self employed (Business)
• NRIs
• Borrowers can be Resident Indian, Non Resident India or PIO

There will be a processing fee along with Service tax to be paid.

Depending on the movement of interest rates in the market, the interest rate for the loan is reset at the beginning of every quarter. The rate is reset with reference to the bank’s Prime Lending Rate/Floating Reference Rate prevailing on the dates of the respective resets. When the rates are reset, customers have the option of either adjusting their loan installment or the loan tenure, subject to the overall restrictions on the loan tenure.

The interest rate is fixed on the home loan for the term of the loan.

Most of the banks have it available online.

Even before selecting a property, Banks will sanction a loan amount, based on the repayment capacity.

Floating and Fixed interest rates.

• Salaried – Up to 20 years – Till date of retirement, the tenure will be calculated
• Self Employed – Up to 20 years – Up to the age of 65 years, the tenure will be calculated
• NRI – Up to 15 years – Depends whether salaried or self employed.

Loan will be disbursed after the property is located, legally cleared, cleared by the engineers and paying the borrowers own contribution towards the home/flat. The cheque for the loan amount is drawn in favor of the builder or seller as the case may be. In the case of an under-construction property, the Bank disburses loan amounts appropriate to the state of construction.

Repayment is done in equated monthly installments (EMIs), and includes interest and principal amount calculated on monthly rests. EMIs can be paid by issuing post-dated cheques from the NRE / NRO / FCNR/ NRSR account, or any other account approved by the Reserve Bank of India (RBI) for a period of 3 to 5 years initially. These days Auto debits are given preferences. In the case of part-disbursement of the loan, the monthly interest is payable only on the disbursed amount. This is called pre-EMI interest, and is payable monthly till the final disbursement is made, after which EMIs will commence.

An NRI is an Indian citizen who stays outside India.

• For purposes of carrying out employment or any business or vocation.
• Under circumstances indicating an intention to stay outside India for an uncertain duration.
• Any Indian citizen deputed outside India for a temporary period in connection with employment.

A citizen of a foreign country (other than a citizen of Bangladesh or Pakistan) is a PIO if,

• He/ she at any time held an Indian passport.
• He/ she or either of his/ her parents or any of his/ her grandparents was a citizen of India.
• Spouse (not being a citizen of Bangladesh or Pakistan) of an Indian citizen.

Part payment and Preclosure of the loan is possible. Charges are applicable for these. For any preclosure approximately about 2% on the outstanding amount will be charged by banks. On Part payments if there is a change in the terms, documentation charges will be charged.

A power of attorney is a resident Indian appointed to act on behalf of all the applicants through an execution of the General Power of Attorney (GPA) deed. It is mandatory for both the applicant and co-applicant to execute the GPA in favor of the person concerned. If the co-applicant is a resident Indian, he / she can also be the POA through the execution of the GPA by the applicant.

The security for the loan is first mortgage of the property to be financed, by way of deposit of title deeds and/or such other collateral security as may be necessary. The documents need to be submitted to the bank before disbursing the loan.

Housing loans are available for purchase, construction, extension or renovation of a new house or flat.

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