Frequently Asked Questions

Home Loan

Immediate family members such as your parents, spouse and children can be joint borrowers in case of a home loan.
No, only one or more members of your immediate family can co-sign joint home loan application. Thus, your friend does not qualify.
The maximum number of joint borrowers in case of a home loan is fixed at 6. However, only family members such as parents, siblings and spouse can be co-borrowers for a home loan in India.

If the interest rate on the loan varies periodically over the loan tenure, then it is called a floating rate home loan. Lenders have their own base rate which determines the rate of interest charged on a home loan. The base rates of banks are revised from time to time based on RBI directives as well as other factors, which leads to an increase or decrease in the EMI amount payable.
Fixed rate home loans are offered at a predetermined interest rate during the loan period and remain unchanged during the loan period irrespective of market conditions. This can be a huge benefit when market volatility starts affecting interest rates. For instance, if the RBI increases interest rates on loans, then people with fixed rate home loan will not be affected by any increase or decrease in the market interest rates and the EMI amount will remain unchanged.

Personal Loan

Yes, there is minimum loan amount you need to borrow and it varies from lender to lender. Most lenders have set their minimum personal loan amount at Rs. 30,000.
Yes, you can apply for personal loan with a co-applicant (jointly). The co-applicant should be a family member such as your spouse or parents. A co-borrower makes your loan application process in a higher income bracket, enabling you to avail a larger loan amount. However, if either you or your co-applicant have poor credit history, your loan application may be adversely affected.
Maximum loan amount sanction criteria may differ from one lender to another, some of the key factors taken into consideration includes – current income level, current liabilities and credit score.Your current income level and your liabilities (outstanding credit card dues current EMIs etc.) effect your repayment capacity. So, if you are in a lower income bracket or have a large amount of unpaid credit card bills or outstanding loan EMI, you would be given a lower personal loan amount compared to an individual with a higher income or fewer financial liabilities. A high credit score shows that you have paid your previous loans and/or credit card dues in a proper manner, signifying that you are a safe borrower.
In Flat Interest Rate, the borrower needs to pay interest on the entire principal amount borrowed throughout the loan term. Thus, the interest payable does not decrease. Reducing Balance Interest Rate involves the borrower to pay interest only on the outstanding principal amount, i.e. the balance that remains outstanding after getting reduced by the principal repayment.
Part Payment: A part-payment amount is less than the full loan principal amount and it is made before the loan amount becomes due.
Pre-Payment: This occurs when you pay off your personal loan in part before it becomes due as per the EMI schedule. The pre-payment amount may or may not be equal to the total due amount. Pre-payment charges usually range from 2% to 5% of outstanding loan amount. Also, many banks do not allow pre-payment of personal loan before a specified number of EMI payments are completed.
Pre-closure: Pre-closure is completely paying off a personal loan before the loan tenure ends. Pre-closure charges range from 2% to 5% of the loan amount.

Documentation varies from one lender to another, some of the basic key documents required with your personal loan application include:

  • Income proof (Salary Slip for salaried/recent acknowledged ITR for self-employed)
  • Address Proof Documents
  • Identity Proof Documents and others
  • Certified copies of degree/license and others as per the lender’s criteria.

Car Loan

As the name suggests, a car loan is a loan granted to an individual buying a car. Therefore, a car loan is a secured loan where the car you buy is collateral. So, there is no additional collateral requirement for a car loan. However, you have to get the RC (registration certificate) of the car endorsed with the bank. This endorsement is cancelled after repayment of the loan is completed.
The maximum loan amount may vary from one lender to the other. Usually, banks approve loan amounts ranging from 80%–90% of the car’s on-road price. Few banks even lend 100% of the car’s ex-showroom price. In addition to these criteria, the percentage of financing offered depends on the price, type of car (standard/ premium) and whether you are applying for a new or pre-owned car.
Like any other loan, a car loan application requires self-attested supporting documents such as income (last three pay slips/last acknowledged ITR), address and identity proof documents along with your PAN card. Other documentation requirements, if any, tend to differ from one lender to another.
A loan guarantor or a co-borrower is only required if you are not able to meet the eligibility criteria stated by the lender such as monthly income, age or credit score. Otherwise you can apply for a car loan on your own.

Loan Against Property

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.
The title to the property should be clear, marketable and free from encumbrance. In other words, there should not be any existing mortgage, loan or litigation which is likely to affect the title to the property adversely.
Yes, 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.
The lender decides the amount based on your repayment capacity. For calculating the loan amount, your age, qualifications, income, spouse’s income, number of dependents, 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.
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.

Business loan

Documentation varies from one lender to another, some of the basic key documents required with your business loan application include:

  • Last 3 years’ Income Tax statements, Bank account statements
  • Business proof
  • Applicable certification related to practice
  • Proof of ownership of the possessions which are used for business purposes
  • Identity proofs such as Aadhar Card, Voter ID Card, PAN Card, Company registration certificate, etc.
  • KYC documents of the co-applicant (if applicable).
Self-employed businessmen/professionals, Limited or private limited firm, Manufacturer, retailer or service provider are the entities eligible for business loan.
Yes, a business partner can be a co-applicant in the business loan application. This is recommended as it would increase the probability of getting a loan of higher quantum with longer tenure and interest rate.
Maximum loan amount sanction criteria may differ from one lender to another, some of the key factors taken into consideration include - the amount of business loan depends on the valuation of the business, annual profits of the business, the industry within which the business operates as well as the number of years of operations. Lenders are also liable to check the cash flows and other aspects of revenue generation.
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