A. Any loan against a residential or commercial property can be used for both personal and business purposes. In fact, you can use it for anything other than speculative or non-prohibitive activities.
A. Basically, the bank looks at your repayment capacity. For calculating the loan amount, your income, age, qualifications, number of dependants, spouse’s income, assets, liabilities, stability and continuity of occupation and savings history are taken into consideration. However the eligibility of loan does not, generally, exceed 60 percent of the market value of the property.
A. You can include your spouse as a co-applicant and that results in a higher amount being lent. However, if the property is co-owned, all co-owners mandatorily need to be co-applicants.
A. Processing fee for loan against any property varies from bank to bank and is generally around 1 percent.
A. Interest is calculated on daily reducing balance. Your monthly out-go (equated monthly installment – EMI) is much lower as compared to the interest on annual reducing balance.
A. Loans against property has a maximum tenure of 15 years, subject to the condition it does not exceed your retirement age. This condition however can be flexible in certain cases
A. Loan to Value (LTV) is a term that is used to express the ratio of a loan to the value of the asset mortgaged. The loan is usually offered in the range of 50% to 70% of the market value of the property
A. You repay the loan in Equated Monthly Installments (EMIs) comprising principal and interest. Repayment by way of EMI commences from the month following the month in which you take full disbursement.
A. As the name implies you need to mortgage your property for availing this loan. This mortgage is Equitable mortgage by Memorandum of Entry by way of deposit of title deeds and/or such other collateral security, as may be necessary. Collateral security for by way of assignment of insurance policy or any such other assignable financial instruments are also required, as security to loan if deem necessary by the Bank.
Please do ensure that the title to the property is clear, marketable and free from encumbrance. To elaborate, there should not be any existing mortgage, loan or litigation which is likely to affect the title to the property adversely.
A. Yes. Prepayment is possible and there is no prepayment fee if you repay the loan after six months of availing the loan if you pay from your own source of funds without transferring the loan.
A. The repayment capacity of the applicant(s) based on Resident status is reassessed and a revised repayment schedule worked out. The new rate of interest will be as per the currently applicable rate of Resident Indian loans (for that specific loan product). This revised rate of interest would be applicable on the outstanding balance being converted. A letter is given to the customer confirming the change of status.