Home Loan FAQ’s
Q1. Which banks can I take loans from?
A: The project is approved by all leading Banks/Financial Institutions.
Q2. Who can apply for a home loan?
A: Any Indian Resident, Non-resident Indian or Person of Indian Origin can apply for a home loan if they are 21 years of age at the origin of the loan and 65 years or below at loan maturity. Banks and Housing Finance Companies (HFCs) usually give home loans for properties located in India to people who are employed or self-employed, with a regular source of income.
Q3: How does the lender (Bank) calculate eligibility?
A: Loan eligibility is calculated based on the ability to repay. Factors such as income, age, qualifications, number of dependents, spouse’s income, assets, liabilities, stability and continuity of occupation and savings history are taken into consideration.
Q4: How do I repay the loan?
A: You can repay the loan in Equated Monthly Installments (EMIs) comprising principal and interest.
Q5: What is pre-EMI interest?
A: Before final disbursement, you may have to pay interest on the portion of the loan disbursed. This is called pre-EMI interest. Pre-EMI interest is payable every month from the date of each disbursement up to the date of EMI commencement.
Q6: How do I select my Bank?
A: Various considerations would help you zero down on the Bank / HFC most suitable for your loan requirements. Analyze the following points before taking your decision:
Loan amount: The minimum and maximum loan amounts vary between Banks. Find out if the amount you require falls within this limit.
Duration: There is no lower and upper limit to the tenure of the loan. Find out if the time limit you want it for can be accommodated. This varies between Banks/HFC’s. Depending on your requirements, this would have a bearing on the loan you opt for.
Interest rate: This varies between Banks. Fix a duration that you want the loan for and find out the EMI from them. Compare and identify the lowest EMI.
Pre-payment: Check if the Bank charges for repaying the loan before its due date.
Flexibility: Find out whether you can change your interest scheme from fixed to variable if so desired or if there are restrictions.
Guarantor: Some Banks require this, while others don’t.
Documents required: These may vary between Banks/HFCs although there are a few standard documents like proof of income, proof of age and residence and salary slips.
Co-owner: If there is to be a co-owner or co-applicant for the loan, the HFC has to accept the relationship between the two.
Other fees: Each HFC has different fees for administration and processing among others.
Can a loan be switched over if I have obtained it at a high rate of interest, but another Bank / HFC is offering a better interest rate?
Legally you could do this. However, please discuss it with your current Bank / HFC to see if any penalties apply.
Q7: How do I apply for a loan?
A: Approach a Bank / HFC with the latest salary slip and TDS Form 16 of the last two financial years for yourself and your co-applicant. The loan officer will informally tell you the amount of loan you are eligible for and the terms, in areas in which they finance homes.
Q8: Who can be co-applicants for the housing loan?
A: Usually a spouse can be a co-applicant. Other immediate family members are also acceptable to some Bank / HFC, depending on merits. If both partners are working, it is better to have your spouse as a co-applicant since this will entitle you to a much larger loan.
Q9: What is Fixed Interest Rate and Floating Interest Rate?
A: While fixed rate loans are those whose rates are fixed for the tenure of the loan. In case of floating rate loans, the rate is bench marked to a retail lending rate of the lending institution and moves in tandem with it. This means, in case of floating rate loans, the total interest you pay out during the tenure is dependent on the way interest rates move during it. The rate is reviewed periodically every six months and refixed in relation to prevailing market conditions.