Home Loan – FAQ

1What is EMI ?
EMI is the abbreviation of equated monthly installment. This monthly installment is paid by the borrower to the money lender (bank or other financial institutions). Borrower pays a part of the interest and principal amount together as the EMI every month.
2How will banks decide the loan amount I am eligible for?
Banks will determine your loan eligibility largely by your income and repayment capacity. Other important factors include your age, qualification, number of dependants, your spouse's income (if any), assets & liabilities, savings history and the stability & continuity of occupation. Banks usually ask for upto 20% Own Contribution.
3What does ‘Own Contribution’ mean?
Own Contribution’ is the total cost of the property less bank's loan.
4Do I get tax benefits on the loan?
Yes. You are eligible for tax benefits on the principal and interest components of your Home Loan under the Income Tax Act, 1961. As the benefits could vary each year, please do check with our Loan Counselor about the tax benefits which you could avail on your loan.
5When do I start repaying the principal amount?
Repayment of the principal commences from the month following the month in which you avail full disbursement of your loan. Pending final disbursement, you pay interest on the portion of the loan disbursed. This interest is called pre-EMI interest. Pre-EMI interest is payable every month from the date of each disbursement up to the date of commencement of EMI.

In the case of under construction properties, Banks also offers you a unique ‘Tranching’ facility wherein you can choose the installments you wish to pay till the time the property is ready for possession. Any amount over and above the interest which is paid by you goes towards principal repayment, thus helping you repay the loan faster. This is especially useful in case your disbursements are likely to be spread over a longer period of time.
6What does ’Agreement to Sell’ mean? Does it have to be registered?
The ’Agreement to Sell’ in a property transaction is a legal document executed on a stamp paper that records in writing the understanding between the buyer and the seller and all the details of the property such as area, possession date, price etc.

In many Indian states, the Agreement to Sell is required to be registered by law. We suggest that in your own interest you should register the Agreement within four months of the date of the Agreement at the office of the Sub-Registrar appointed by the State Government, under the Indian Registration Act, 1908.
7Can I repay my loan ahead of schedule?
Yes, you can repay the loan ahead of schedule by making lump sum payments towards part or full prepayment, subject to the applicable prepayment charges. Banks may also offer a free-of-charge facility to accelerate your loan repayment called ‘Accelerated Repayment Scheme’. This option provides you the flexibility to increase the EMIs every year in proportion to the increase in your income which will result in you repaying the loan much faster.
8What are the documents banks usually ask for processing a home loan?

These documents may vary for case to case, depending on the borrowers background.

  1.  3 Photos
  2. Copy of PAN card (Self attested)
  3. Copy of Passport (Self attested)
  4. Copy of VISA (Self attested)
  5. Copy of work permit (Self attested)
  6. Copy of Employment contract (Self attested)
  7. Copy of Overseas address proof (Self attested)
  8. Original salary certificate
  9. Salary slips
  10. 10.  Overseas salary account statement
  11. Loan account statement if any
  12. Copy of employer ID card (Self attested)
  13. Power of Attorney
  14. Copies of Asset proofs (like land tax, building tax receipts, FD receipts etc.)
  15. Sale agreement (From the builder)
  16. Construction agreement(From the builder)
  17. Tri/Quadripartite agreement from the Builder
  18. NoC from the builder
  19. Margin/Own Contribution paid receipt from Builder
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