Loan Sanction & Eligibility broadly depends on the following factors
a. Income papers
Financial and Income Papers reflecting your monthly repayment capacity.
b. Creditworthiness and credit history
Previous credit history in terms of credit cards and past repayment of loans.
c. Legal of the property
Legal check from the bank’s approved lawyers regarding property’s title and other government approvals related to the property.
d. Technical of the property
Market Valuation of the property and other technical checks done by the bank’s approved Valuers as loan sanctioned is the percentage of the cost of the property.
Loan Amount depends on various factors like
a. Income – income earnings, stability and continuity of income and monthly repayment capacity
b. Loan Tenure & Age – Higher the tenure higher will be the loan amount eligibility. Maximum tenure available will be the difference between the retirement Age & Age of the applicant whose income to be considered. Generally retirement age is 58 / 60 yrs (unless documented by your company) for salaried customers and 65 yrs for self employed customers.
c. Existing Loans – Loan eligibility amount is affected if you have any existing loans as it reduces your disposable income and hence reducing your monthly repayment capacity.
Yes. As per the applicable guideline of the Reserve Bank of India, persons of Indian origin holding foreign passports are eligible for loans.
Interest rates vary from bank to bank depending on the loan amount, profile etc. Following are interest rate options
a. Floating Rate :
Interest rate = RBI REPO Rate + Margin / spread
In Floating type interest rate changes whenever RBI changes its REPO RATE while the Margin / spread generally remains constant throughout the tenure.
b. Semi Fixed Rate
In this type, Interest Rate remains fixed for certain period say 2 / 3 / 5 yrs and then it becomes floating.
As per RBI guidelines, for Individuals availing floating rate home loans, there is no penalty for part or full prepayment. But for Loans Against Properties (LAP) prepayment conditions vary from bank to bank.
The risk exposure is more due to low margin requirements. Defaults in loan repayment in a stagnated market, leads to a crisis to the company. Your earning capacity in such eventualities mitigates the credit risk of the company. Enforcement of mortgage leads to permanent loss of your property, which is not the objective of the Banks / NBFCs.
Pre Emi is the simple interest you pay on the disbursed loan which is payable every month up to the date of final disbursement. EMI is the Equated Monthly Installment comprising of principal and interest.
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