Eligibility |
|
|
|
- Home Loan
You must be at least 21 years of age for the loan to be sanctioned.
The loan must terminate before or when you turn 65 years of age.
You must be employed or self-employed with a regular source of income.
- Office premise loan
You must be at least 21 years of age for the loan to be sanctioned.
The loan must terminate before or when you turn 65 years of age.
You must be self-employed with a regular source of income.
The loan can be for the purchase / construction / extension of a non-residential property.
A loan for renovation or improvement will be given only at the time of acquisition of property.
Professionally qualified and self-employed individuals can apply.
A minimum of 3 year's work experience is a must.
Loan Amount
A number of factors such as your income, age, number of dependants, qualifications, assets and liabilities, income stability/ continuity of your employment / business etc. are taken into account when assessing your repayment capacity.
However, there are ways by which you can enhance your eligibility:
If your spouse is earning, put him/her as a co-applicant. The additional
income shall be included to enhance your loan amount. Incidentally, if there are any
co-owners they must necessarily be co-applicants.
Did you know that your fiancée's income could also be considered for sanctioning the loan on your combined income? The disbursement of the loan, however, is done only after you submit proof of your marriage.
Providing additional security like bonds, fixed deposits and LIC policies may also help to enhance eligibility.
While there is no need for a guarantor, having one might enhance your credibility with us. If so, our loan officer would provide you with the necessary details. However, the final amount to be sanctioned will depend on your repayment capacity. In the total cost, registration charges, transfer charges and stamp duty costs are included.
Sanctioning
Documents required for applying for a home loan (for self-employed professionals and businessmen)
General Documents
Updated bank passbook or a Xerox of the statement of accounts for the
last 6 months
Age proof: PAN card, Voters ID, Passport and License
Xerox of ration card
Business profile with details on the nature of business, list of clients, suppliers, staff strength, geographical spread, etc.
Xerox of education qualifications certificate and proof of business existence
Xerox of last 3 years Income Tax returns
Last 3 years profit /loss and balance sheet
Processing fees cheque
Documents required for applying for a home loan (for employed professionals)
Latest salary certificate / slip in original Age proof: PAN card, voters ID, passport, license Xerox of Form no.16 A (TDS Form) from employer - Certificate in original from employer for any other allowances, which are not reflected in salary slip
- Updated bank pass book / Xerox of statement of accounts for last 6 months
- Xerox of your company's ID or ration card
- Passport size photographs of applicant and co-applicant
- Processing fees cheque
- You may be asked to submit further legal documents if required by the bank or its approved lawyers. Retain photocopies of all the documents being submitted by you.
Disbursement
Your loan will be disbursed after you identify and select the property that you are purchasing and submit the requisite legal documents.
Each and every single document asked for will be verified and checked for your safety. This may take some time but we want to ensure a clear title by completing all the
legal and technical verifications so that you have full rights to your home.
The 230 A Clearance of the seller and / or 37I clearance from the appropriate income tax authorities (if applicable) is also needed.
On satisfactory completion of the above, registration of the conveyance deed and investment of your own contribution, the loan amount (as warranted by the stage of construction) will be disbursed by Bank.
The disbursement will be in favour of the builder/seller.
List of documents for disbursement
- Loan Agreements
- Disbursement Requests
- Post-dated cheques
- Personal guarantors documents, as the case may be
Repayment of Loan
- What is the repayment tenure?
- Home equity loans - maximum loan tenure of 15 years
- Office premise loans - maximum loan tenure of 15 years
- Home loan - maximum loan tenure of 20 years
- How is the loan repaid? All loan repayments are done via equated monthly installments (EMI).
- What is an EMI? EMI refers to equated monthly installment. It is a fixed
amount which you pay every month towards your loan. It comprises of both, principal repayment and interest payment.
- When does the repayment start? EMI payments start from the month following the month in which the full disbursement has been made.
- How is the EMI paid? The EMI should be paid every month through post-dated cheques (PDCs) or direct deductions from your salary. If you are opting for PDCs, you will have to provide 36 upfront. These PDCs are to be dated on the 1st of every month. However, most financial institutions do have flexible rules of dating the cheques, keeping in mind the delay in processing of salaries. For definitive details, check the rules and regulations of the financial institution you are associating with.
- What if a PDC bounces? In the case of a bounced cheque or delayed payment, charges and outstanding dues will be charged as per the prevailing company policy. You can replace old PDCs with new ones within 5 - 7 working days.
- What is pre-EMI interest? In the case of part disbursement of the loan, monthly interest is payable only on the disbursed amount. This interest is called pre-EMI interest (PEMI) and is payable monthly till the final disbursement is made, after which the EMIs would commence.
- When do I pay PEMIs? The first PEMI is payable by cheque by the end of the month in which the disbursement is made. Each subsequent PEMI is payable at the end of every month till the commencement of EMI.
Application Process
The moment you decide to buy a home, you can put in your application.
Please note that the property does not need to be in the same city where you are residing.
If your financial status or plans to buy a house change, you can withdraw your sanction within 6 months of approval.
FAQs
- What is the minimum loan amount? You can get a home loan starting from Rs. 2 lakhs (3 lakhs in Delhi, Mumbai and Bangalore). The loan amount depends on your repayment capability and is restricted to a maximum of 85% of the cost of the property or the cost of construction as applicable. Repayment capacity takes into consideration factors such as income, age, educational/professional qualifications, number of dependants, spouse's income, assets, liabilities, stability, continuity of occupation and savings history.
- How is the interest calculated?
There are two schemes:
1. Fixed Rate Home Loans
2. Adjustable Rate Home Loans
If you opt for an Adjustable Rate Home Loan, the interest rate would vary with the Bank Home Floating Reference Rate. Under the Fixed Rate Home Loans the rate applicable on the date of disbursement remains fixed during the entire duration of the loan.
- How much time will it take for my loan to be approved?
It takes a week for your loan to be sanctioned after you have submitted all the documents.
- Who can be the co-applicants for the loan?
You could include your spouse as a co-applicant for the loan and his/her income will be included to enhance your loan amount. In case there are any other co-owners they also need to be co-applicants.
- Is a personal guarantor a must?
No, there is no personal guarantor required in most cases.
- What security/collaterals do I have to provide?
Typically, the security for the loan is a 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 title to the property should be clear and marketable.
- What are the stages involved in taking a loan?
There are two main stages:
1. Sanction of the loan, whereby you get an approval for a specific loan amount based on the value of your property and repayment capabilities.
2. Disbursement of the loan amount.
- What are the various types of loans available?
1. Home Loans
2. Land Loans
3. Home Equity Loans
4. Office Premises Loans
All of these are available on an adjustable rate or a fixed rate.
- What is a Monthly Reducing balance?
An Equated Monthly Installment (EMI) has 2 components, interest and principal. When the interest is calculated on monthly installments, the principal on which the interest is charged goes down every month. This results in a significant saving for the customer over the tenure of the loan.
- What is an Annual Reducing balance?
An Equated Monthly Installment (EMI) has 2 components, interest and principal. When the interest is calculated on annual amount, the principal reduces only at the end of the year. Therefore, you continue to pay interest on a portion of the principal that you have already actually paid back to the lending company.
- When can I apply for a loan?
You can apply for a home loan even before you have selected your property. The loan amount would be sanctioned or approved for you, based on your repayment capability.
- When will the loan be disbursed?
Your loan will be disbursed on
1. Your identification and selection of the property
2. Submission of the legal documents
3. Legal and technical clearance of the property
4. Investment of your contribution towards the property
- What is an amortization schedule?
An amortization schedule is a table giving the reduction of your loan amount by monthly installments. The amortization schedule gives the break-up of every EMI towards repayment interest and outstanding principal of your loan.
- What are the tax benefits of taking a home loan?
The tax benefits on a home loan, under the Income Tax Act, are two-fold:
- Principal Repaid: Rebate under section 88 (2) of the Income Tax Act is available to individuals on repayment of the principal portion as given below
Gross total income before deduction
|
Rebate available
|
Upto Rs.1,50,000
|
20%
|
More than Rs.1,50,000
but not exceeding Rs. 5 lakh |
15% |
More than Rs.5 lakh |
none |
Moreover, the rebate is allowed up to the maximum limit of Rs.20,000 per financial year on the repayment of the principal sums, which need not be out of income chargeable to tax of the year in which such repayment is made.
- Interest Repaid: Under section 24 of the Income Tax Act, in case of self-occupied property, deduction is allowed up to Rs.1, 50,000 per annum for houses acquired or constructed with capital borrowed after March 31, 1999. This is valid provided the acquisition or construction is completed within 3 years from the end of the year in which such loan is taken.
- Can I get IT certificates in the name of both the Applicant and co-Applicant separately? As per the IT rules only one certificate can be issued for a home loan and hence this certificate is issued in the name of both applicant and co applicant.
- When is the IT certificate issued?
The IT certificate will be issued at the end of a financial year. You can expect to receive your copy of the IT certificate in the month of April or May.
- How can I get the tax benefit during the year?
You can request for a provisional IT certificate that can be issued any time during the course of the year.
|
|