Monday, April 30, 2012
Sunday, April 22, 2012
Home Loan Some Common FAQs
Some of the common home loan terms that one encounters while applying for a home loan. While the same are common terms amongst lenders they could be brain teasers some times.
What is an EMI?
An EMI refers to an equated monthly installment. It is a fixed amount which one pays
every month towards the loan. It comprises of both, principal repayment and interest payment.
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.
What is Fixed ROI?
Fixed ROI stands for the Fixed Rate of Interest. The rate of interest remains unchanged for the entire tenure of the loan irrespective of the drop/increase in the market rates.
What is Floating ROI?
The Floating Rate of Interest is one that fluctuates according to the market lending rate.This comes with a little risk as in when ever lending rates go up, the loanee will haveto pay more than the amount set aside for loan payment per month.
What is PF?
PF is the processing fees and has to be paid upfront by the customer being fees charged at the time of submission of the application for processing.
What ?is IIR
IIR is Installment to Income Ratio and denotes the portion of your monthly installment on your home loan as a percentage of your income. The same is capped between 40% to 60 % of income subject to applicant's income & profile.
What is IC?
Whenever a customer delays the payment of the monthly installment, a collection team is sent to the customer's house to recover the money. The expenses incurred on such occasions are called Incidental Charges (IC)
What is LTV?
LTV stands for the Loan to Value and is used to calculate the loan amount that a person is eligible for on the total cost of the property.
What is Margin Money?
Banks & NBFC fund around 80% to 85% of the cost of the house. The balance 20% to 15% has to be borne by the customer himself. This difference amount is called the Margin Money.
For what purpose can I avail a home loan?
You can take a loan for constructing a house, purchasing of a ready possession house / flat
or a flat in resale, takeover of existing loans from approved banks / housing finance companies, the purchase of a plot of land, for renovation of and extension of the house.
Who can avail of the loan?
Salaried individuals, Self employed professionals or businessmen and individual NRI's.
Who can be a co-applicant for the loan?
All co-owners need to be co -applicants.
Spouse/parents/children can be co-applicants and his / her income can be clubbed to
enhance the loan amount.
What security is to be provided?
Security for the loan is a first mortgage of the property to be financed, by way of deposit of title deeds / or such collateral security as may be necessary. The title to the property needs to be clear, marketable and free from encumbrance. There should not be any existing mortgage, loan or litigation, which is likely to affect the title to the property adversely.
Can loan be repaid ahead of schedule?
Yes, the loan can be paid ahead of schedule, however if the loan is pre paid or transferred to another bank or HFC, a nominal fee @ 2% of principal outstanding is charged
Are the Bank policies subject to change?
Yes. These policies are reviewed periodically.
How is the loan repaid?
An EMI refers to an equated monthly installment. It is a fixed amount which one pays every month towards the 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.
What happens in case 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.
What is the minimum /maximum loan amount?
Home loan are available from 5 lakh to 5 crores.
What is the time frame for a loan to be approved?
It takes a 7/10 working for the loan to be sanctioned after submission of all documents.
When is the loan disbursed?
The loan will be disbursed on:
- Submission of the legal documents.
- Legal and technical clearance of the property
- Submission of Registered copy of agreement.
What is an amortization schedule?
An amortization schedule is a table giving the reduction of the loan amount
by monthly installments. The amortization schedule gives the breakup of every EMI
towards repayment of interest and outstanding principal of loan.
The Author Subhrajeet Talukdar is the founder of Apex Finance & Marketing in Mumbai in April 2006 and the promoter of Eazeeloans.com a loan advisory portal for Personal loan,Home Loan,Business loan,Loan against Property,Auto loan, working capital,OD/CC, Private finance,Loan against shares.
What is an EMI?
An EMI refers to an equated monthly installment. It is a fixed amount which one pays
every month towards the loan. It comprises of both, principal repayment and interest payment.
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.
What is Fixed ROI?
Fixed ROI stands for the Fixed Rate of Interest. The rate of interest remains unchanged for the entire tenure of the loan irrespective of the drop/increase in the market rates.
What is Floating ROI?
The Floating Rate of Interest is one that fluctuates according to the market lending rate.This comes with a little risk as in when ever lending rates go up, the loanee will haveto pay more than the amount set aside for loan payment per month.
What is PF?
PF is the processing fees and has to be paid upfront by the customer being fees charged at the time of submission of the application for processing.
What ?is IIR
IIR is Installment to Income Ratio and denotes the portion of your monthly installment on your home loan as a percentage of your income. The same is capped between 40% to 60 % of income subject to applicant's income & profile.
What is IC?
Whenever a customer delays the payment of the monthly installment, a collection team is sent to the customer's house to recover the money. The expenses incurred on such occasions are called Incidental Charges (IC)
What is LTV?
LTV stands for the Loan to Value and is used to calculate the loan amount that a person is eligible for on the total cost of the property.
What is Margin Money?
Banks & NBFC fund around 80% to 85% of the cost of the house. The balance 20% to 15% has to be borne by the customer himself. This difference amount is called the Margin Money.
For what purpose can I avail a home loan?
You can take a loan for constructing a house, purchasing of a ready possession house / flat
or a flat in resale, takeover of existing loans from approved banks / housing finance companies, the purchase of a plot of land, for renovation of and extension of the house.
Who can avail of the loan?
Salaried individuals, Self employed professionals or businessmen and individual NRI's.
Who can be a co-applicant for the loan?
All co-owners need to be co -applicants.
Spouse/parents/children can be co-applicants and his / her income can be clubbed to
enhance the loan amount.
What security is to be provided?
Security for the loan is a first mortgage of the property to be financed, by way of deposit of title deeds / or such collateral security as may be necessary. The title to the property needs to be clear, marketable and free from encumbrance. There should not be any existing mortgage, loan or litigation, which is likely to affect the title to the property adversely.
Can loan be repaid ahead of schedule?
Yes, the loan can be paid ahead of schedule, however if the loan is pre paid or transferred to another bank or HFC, a nominal fee @ 2% of principal outstanding is charged
Are the Bank policies subject to change?
Yes. These policies are reviewed periodically.
How is the loan repaid?
An EMI refers to an equated monthly installment. It is a fixed amount which one pays every month towards the 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.
What happens in case 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.
What is the minimum /maximum loan amount?
Home loan are available from 5 lakh to 5 crores.
What is the time frame for a loan to be approved?
It takes a 7/10 working for the loan to be sanctioned after submission of all documents.
When is the loan disbursed?
The loan will be disbursed on:
- Submission of the legal documents.
- Legal and technical clearance of the property
- Submission of Registered copy of agreement.
What is an amortization schedule?
An amortization schedule is a table giving the reduction of the loan amount
by monthly installments. The amortization schedule gives the breakup of every EMI
towards repayment of interest and outstanding principal of loan.
The Author Subhrajeet Talukdar is the founder of Apex Finance & Marketing in Mumbai in April 2006 and the promoter of Eazeeloans.com a loan advisory portal for Personal loan,Home Loan,Business loan,Loan against Property,Auto loan, working capital,OD/CC, Private finance,Loan against shares.
Repair & Rectify Bad Credit Issues In Credit Bureau's
Have you tried to apply for either a Credit Card, Home loan, Auto loan, Personal loan, Mortgage loan or other Credit facility from any bank or financial institution only to learn that the same has been declined due to past bad performance or inadequate credit score as captured by the assigned Credit Bureau, currently Cibil & Equifax in India. Many of us would have faced this most embarrassing and frustrating situation at some point of time due to past bad performance in any of the credit relationships held across all financial institutions arising from either late payments, non payment, settlements done etc.
The situation could have arisen due to gross inadequate information or knowledge available in the public domain of the possible repercussions and hightened possibly by the "Who Cares" attitude and lack of credit servicing discipline by most people affected including people in the financial sector.
The problem got aggravated manifold by banks and lending institutions in their mad rush to create a portfolio and falling almost Head over Heels to lend to customers without having a proper and effective external credit check and filteration process due to which many customers who had defaulted or had a bad credit history in one could easily get fresh credit facility from another. Another compounding factor could be the flawed lending policy by most lending institution with products launched to capture "Quantity" and not "Quality".
Coming back to the question asked at the outset. How does or what does one do to repair or rectify bad credit history and avail fresh credit facilities at best terms?
Help is just around the corner for anybody who might have inadvertently spoiled or marred their credit record and who genuinely would want to resolve their problem.
An enterprising group of entrepreneurs from the financial sector having first hand and very close experience about the problem under discussion are offering a solution for the very first time in a very professional and organised manner which could offer succor to many afflicted person through their Credit Help Improvement company launched for the purpose.
They approach the problem in a Holistic manner and offer a hand held guided program by trained professional counselors which if followed in Toto promises to resolve the issues over a period of time. One could check improvements and their current credit history in a simplified manner through reports generated from the Credit Bureau's assigned with the task of collating and formatting the data forwarded by various financial institutions periodically every 3 months. Their underlined philosophy being that Good Credit Health is similar to Good Physical and Mental Health and just like a good mental and physical wellness requires a disciplined and dedicated approach to enjoy life to its fullest so does Good Credit Health require a disciplined approach in the repayment of credit facilities availed, to take advantage of higher credit at better terms in future.
There is of course the mandatory fees to be paid upfront one time and valid over a period of 12 months. However it would be a small price to pay for attaining a good credit rating and mental peace.
For further details log on to and submit details at www.eazeeloans.com
Usefull links
- Credit Information Companies (Regulation) Act, 2005
http://rbidocs.rbi.org.in/rdocs/Content/PDFs/69700.pdf - Understanding Your Credit Report and Credit Score (Canada)
http://www.fcac-acfc.gc.ca/eng/resources/publications/budgetMoneyMgmt/CreditReportScore/PDF/ CreditReportScore-eng.pdf - Credit Research Centre Credit Scoring Conference
http://www.crc.man.ed.ac.uk/conference/ - CIBIL website (India)
http://www.cibil.com/ - Equifax Website (India)
http://www.equifax.com/home/en_in - Xperian Website (India)
http://www.experian.in/
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