How will the bank decide the loan amount I am eligible for?

What is an annual rest?

Is the interest rate fixed for the duration of the loan?

What is an EMI?

What is pre-EMI interest?

What is the size of the EMI?

What security will I have to provide?

Can I repay the loan ahead of schedule?

Do I get a tax benefit on the loan?

Does the Agreement for Sale have to be registered?

Are there any restrictions on transfer of immovable properties?

Does the property have to be insured?

Will the bank assist me in selecting accommodation of my choice?

Are these policies subject to change?

Will the bank finance persons of Indian origin holding foreign passports?

How is my loan reassessed if there is a change in status from Non-Resident Indian to Resident Indian?

Can I get a Home Loan that is both Fixed and Floating?

1. How will the bank decide the loan amount I am eligible for?

Your repayment capacity as determined by the bank will help decide how much you can borrow (the cost of the property or Rs. 1 crore, whichever is lower). Repayment capacity takes into consideration factors such as income, age, qualifications, number of dependants, spouse's income, assets, liabilities, stability and continuity of occupation and savings history. And, of course, the bank's main concern is to make sure you can comfortably repay the amount you borrow.

2. What is an annual rest?

Interest is calculated on annual rests. Principal repayments are credited at the end of the bank's financial year. The effective rate of interest varies depending on the term of the loan. For a loan with a term of 20 years, the effective interest rate would be higher by 0.37% per annum than the indicated rate of interest.

3. Is the interest rate fixed for the duration of the loan?

The bank has two schemes, (a) Fixed Rate Home Loans (b) Adjustable Rate Home Loans. Under the Fixed Rate Home Loans the rate applicable on the date of disbursement remains fixed during the entire duration of the loan.

4. What is an EMI?

You repay the loan in Equated Monthly Instalments (EMIs) comprising principal and interest. Repayment by way of EMI commences from the month following the month in which you take full disbursement.

5. What is pre-EMI interest?

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 upto the date of commencement of EMI.

6. What is the size of the EMI?

The EMI is 1/12th the Equated Annual Instalment. The size of the monthly instalment comprising principal and interest depends on the quantum of the loan, the interest rate applicable and the term of the loan.

7. What security will I have to provide?

Typically the security for the loan is a first mortgage of the property to be financed, normally by way of deposit of title deeds and/or such other collateral security as may be necessary.

Interim security may be additionally required, if the property is under construction. Collateral or interim security could be assignment to the bank of life insurance policies, the surrender value of which is at least equal to the loan amount, guarantees from sound and solvent guarantors, pledge of shares and such other investments that are acceptable to 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.

8. Can I repay the loan ahead of schedule?

Yes. You can repay the loan ahead of schedule. An early redemption charge is payable which varies from time to time. Currently, the early redemption charge is 2% and is payable on the amount being prepaid in case you decide to repay the loan in part or full.

9. Do I get a tax benefit on the loan?

Yes. Resident Indians are eligible for certain tax benefits on principal and interest components of a loan under the Income Tax Act, 1961. Interest repayment of Rs. 1,50,000 p.a. can get you a tax saving upto approximately Rs. 47,250 p.a. Moreover, you can get added tax benefits under Sec 88 on repayment of principal amount upto Rs. 20,000 p.a. which can further reduce your tax liability by Rs. 4,000 p.a.

10. Does the Agreement for Sale have to be registered?

In many states in India, the Agreement for Sale between the builder and purchaser is required by law to be registered. You are advised, in your own interest to lodge the Agreement for registration 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.

11. Are there any restrictions on transfer of immovable properties?

In terms of Chapter XX C of the Income Tax Act, 1961, the Central Government has the first option to purchase certain immovable properties exceeding certain value and as such transactions covered by this Chapter can be proceeded with only after complying with the requirements prescribed therein.

12. Does the property have to be insured?

You will have to ensure that the property is duly and properly insured for fire and other appropriate hazards, as required by the bank, during the pendency of the loan and to produce evidence thereof to the bank each year and/or whenever called upon to do so. the bank should be the beneficiary of the insurance policy.

13. Will the bank assist me in selecting accommodation of my choice?

The concerned bank will assist you in finding the property of your choice.

9. Are these policies subject to change?

Yes. These policies will be reviewed periodically.

9. Will the bank finance persons of Indian origin holding foreign passports?

As per current guidelines of the Reserve Bank of India persons of Indian origin holding foreign passports are eligible for loans with the bank.

9. How is my loan reassessed if there is a change in status from Non-Resident Indian to Resident Indian?

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.

9. Can I get a Home Loan that is both Fixed and Floating?

The bank Offers you 2-in-1 Home Loans. This facility helps to hedge the interest rate risk of the customer to a large extent. By breaking the loan up into two separate loans, one can customize the loan. One part has the features of a fixed rate home loan and the other has that of an ARHL.