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Home Loan FAQs | Clarifications about Home loan process in India

What is the process of applying for a Home Loan in India?

  1. Approach your desired bank branch Manager and Submit your loan application along with required set of documents.
  2. Your application would be accessed on the basis of various eligibility and funding norms.
  3. A property valuation and title check may be carried out by the company representative to determine the property value and legal clearance of the property to arrive at the loan amount.
  4. Based on the internal and regulatory guidelines, the bank may approve or reject the home loan application.
  5. Submission of the original property documents are required along with signing of agreements, handing over of registered property papers and submission of post-dated cheques/ECS.
  6. Upon finding all the documents in order,Home Loan will be disbursed the loan amount to the developer/contractor based on the progress of construction. The EMI/Pre-EMI will commence after the disbursement.



Am I eligible for a Home Loan?

You are eligible for a loan if you are a salaried, self- employed professional or a businessman. Your loan eligibility will be determined by the bank on the basis of factors such as income, age, qualifications, number of dependents, co-applicant’s income, assets, liabilities, stability and continuity of occupation and savings history. Further, the loan eligibility will also be dependent on the value of property selected by you.

What percentage of property value can be funded?

Usually fund upto 80% of the property value in case of Home Loan and upto 60% in case of Loan Against Property. However, Home Loan funding norms may change from time to time.

I purchased a property 3 months back; can i get a Home Loan?

Yes, you can avail re-finance at applicable Home Loan rate within 6 months from the date of property purchase.

What is EMI and Pre-EMI?

Your loan is repaid through Equated Monthly Installments, which include principal and interest component. EMI repayment starts from the subsequent month of full loan disbursement, while Pre-EMI is the simple interest, payable every month till the time loan is fully disbursed.

What are the documents required for applying for a Loan?

Salaried:
  • Age Proof (PAN Card, Passport, Any other Certificate from Statutory Authority)
  • Residence Proof (Passport, Driving License, Telephone Bill, Ration Card, Election Card, Any other Certificate from Statutory Authority)
  • Latest three month salary slip
  • Last 6 months Bank Statements(salary account)
  • Form 16 for last 2 years

Self Employed Businessmen/Self Employed Professionals:
  • Age Proof (PAN Card, Passport, Any other Certificate from Statutory Authority)
  • Residence Proof (Passport, Driving License, Telephone Bill, Ration Card, Election Card, Any other Certificate from Statutory Authority)
  • Certificate & Proof of business existence along with Business Profile
  • Last 12 months Bank Account Statements (self & business)
  • Last 3 years Income Tax returns (self and business) with Profit & Loss Account & Balance Sheets duly certified/audited by a Chartered Accountant

How does floating rate change during the loan tenure?

Floating rate is linked with bank reference rate and may change from time to time as per the market conditions.


In case of change of floating rate of interest, will my EMI change or tenure?

Keeping the borrower’s interest in consideration, EMI is kept unchanged till a point. In exceptional situations, the EMI is changed to support the principal repayment within a time frame.

What security do I need to provide?

The prime security for the loan is by way of deposit of title deeds and/or such other collateral security as may be necessary. The title of the property should be clear, marketable and free from any encumbrances.

Can I prepay my Home Loan? Are there any charges applicable?

Yes, you can prepay your Home Loan any time during the loan tenure. Currently it is free from any charges; however prepayment norms may change from time to time.

Can I get additional loan through my existing loan account?

Yes you can get additional loan through the existing loan account based upon your repayment capacity and title/value of the property. You may contact any of our branches or place a request on our website for any such requirement.

How do I get my loan statement and income tax certificate?

You need to contact your nearest Home Loan branch to get the required documents; we also send income tax statement to all our customers at the end of every financial year.

How do I replenish exhausted PDCs?

Kindly submit the Post Dated Cheques to your nearest Bankbranch before the EMI due date to avoid any late payment charges.

Does the property need to be insured?

Property insurance is mandatory in order to protect your property against uncertainties like earthquake, fire or any damage and destruction due to natural and man-made calamities, during the tenure of the loan.

What does 10 years fixed rate of interest mean?

Some Banks will offer a pure fixed rate of interest from the day of first disbursement for the period of 10 years (120 months); thereafter residual loan amount automatically moves to a floating rate of interest which prevails at that time.

Can I convert my existing loan from Fixed rate of interest to floating rate of interest to or Vice Versa?

You will have an option to convert an existing loan under Fixed Rate of Interest scheme to Floating Rate of Interest scheme or vice versa by paying applicable switch fee, please refer to the schedule of charges under “fair practice code” section.


Can I prepay my Home Loan? Are there any charges applicable?

Yes, you can prepay your Home Loan without any charges any time during the loan tenure if the same is under floating rate scheme. For home loan under other schemes, prepayment charges may be applicable, please refer to the schedule of charges under “fair practice code” section.

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