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BANKING ASSISTANCE

Once you have booked a Navami property, our in-house financial advisers will provide you with all the banking formalities support you require. You can either choose your own bank or we will be happy to recommend. Once the selection of the bank is complete, we will ensure that all the procedures to acquire your home loan will be hassle free.


BANK related FAQs

What is home loan?

Home loan is a secured loan offered against the security of a house/property which is funded by the bank’s loan. The property could be a personal property or a commercial one. The Housing Loan is a loan taken by a borrower from the bank issued against the property/security intended to be bought on the part by the borrower giving the banker a conditional ownership over the property i.e. if the borrower is failed to pay back the loan, the banker can retrieve the lent money by selling the property.

What are the types of home loan?

There are different types of home loans available in the market to cater borrower’s different needs.

  • Home Purchase Loan: This is the basic type of a home loan which has the purpose of purchasing a new house.
  • Home Construction Loan: This type of loan taken when the borrower wants to construct a new home.
  • Land Purchase Loan: It is that loan which is taken to purchase a land for construction & investment purposes.
  • Home Improvement Loan: This type of home loan is for the renovation or repair of the home which is already bought.
  • Home Extension Loan: This type of loan serves the need when the borrower wants to extend or expand an existing home, like adding an extra room etc.
  • Home Conversion Loan: It is that loan wherein the borrower has already taken a home loan to finance his current home, but now wants to move to another home. The Conversion Home Loan helps the borrower to transfer the existing loan to the new home which requires extra funds, so the new loan pays the previous loan & fulfils the money required for new home.
  • Bridge Loan: This type of loan helps finance the new home of the borrower when he wants to sell the existing home, this is normally a short term loan to the borrower & helps during the interim period when he wants to sell the old home & want to buy a new one, It is given till the time a buyer is found for the old home.
What are the interest rates on home loan offered?

Interest rates differ from bank to bank and normally they range from 9.95% to 16%

How is interest rate calculated on loan?

Most banks adopt the yearly reducing-balance method, which accounts for your principal repayments only at the end of their financial year. As a result, you pay interest on the principal that you have already returned to the bank. The effective interest rate is therefore higher than the quoted interest rate by around 0.7%. Some banks may also follow the daily or monthly reducing-balance method, which results in a lower interest burden.

What are the bases of interest rates calculation?

The interest on home loans is usually calculated on monthly reducing or yearly reducing balance. In monthly reducing balance, the principal on which you pay interest reduces every month as you pay your EMI. However in yearly reducing balance, the principal is reduced at the end of the year, therefore you continue to pay interest on a certain part of the principal which you have actually paid back to the bank, which basically means the EMI for the monthly meducing system is effectively lesser than the yearly reducing system of calculating the interest.

What are the types of interest rates on home loan?

Fixed rate of interest means that the interest rates remain FIXED for the entire duration the loan. This means that you do not benefit, even if the rates of interest drop in the market.

Floating interest rate means that this rate of interest that fluctuates according to the market lending rate.

What is EMI?

EMI or Equated Monthly Instalments refers to the fixed sum of money that you will be paying to the bank every month. The EMI comprise of both interest and principal repayment. The amount of the EMI depends on the quantum of loan, interest rate applicable and the term of the loan.

What is the term of home loan?

The maximum period over which one can pay the loan varies for every bank, and is also different for every scheme. Also your residential status makes a difference. If you are a resident Indian, you could avail of a loan for duration of 5-20 years. Few banks offer a 20-year repayment period, generally at a higher interest rate. As a Non-Resident Indian, you can only avail of a loan for a maximum period of 7 years.

What is the maximum amount that can be borrowed?

The maximum amount that you can borrow depends on factors such as:

  • The purpose of the loan.
  • Whether it is for purchase of property or improvement or renovation.
  • Or purchase of land for development etc

Besides, your residential status (whether resident Indian or Non-Resident Indian) will also be significant on the maximum quantum of loan that you can borrow. Typically Home Loans are provided for in the range of 75%-85% of the cost of the property, including cost of land.

What are the eligibility terms of a home loan?

Your eligibility is determined by your repayment capability, taking into account, factors such as:

  • Income
  • Qualifications
  • Age
  • Spouse's income
  • No. of dependants
  • Stability and continuity of occupation
  • Assets/Liabilities.
  • Savings history.

The most important concern of banks in determining your loan eligibility is that whether or not you are contentedly able to pay off the amount you borrow.

What are the documents needed to apply for a home loan?

Every bank has its own list of documents that one should submit at the time of application. The common documents that the banks ask at the pre-approval stage are:

  • Passport size photograph.
  • Age proof.
  • Copy of Bank A/C statements for the last 6 months.
  • Copy of latest credit card statement.
  • Signature verification from your banker.
If you are self-employed, you need:
  • your business track record.
  • Copy of audited financial statements for the last 2 years.
If you are salaried, you need:
  • Salary and TDS certificate
  • Latest pay slip.
  • Letter from employer.
For self-construction:
  • Approved plans and clearance certificates along with estimates.
Can a joint home loan be applied? Will both mine and my spouse salaries be taken into consideration for calculating the loan amount?

Yes, your salaries can be clubbed for the purpose of calculation of the loan amount. This can be done either when the property is jointly held with the spouse or the spouse stands as a guarantor.

What is the approval time for a home loan?

If all the necessary documents are in order it takes around two weeks for the processing of one’s application and takes 1 more week for the bank to inspect the property papers and make the disbursement.

Approved validity time of a home loan?

Approval is valid for 3 months to give you enough time to choose a flat/house of your choice.

Any Tax benefits provision for a home loan?

Yes, you are eligible for tax benefits on the principal and interest components of the loan under the Income Tax Act, 1961.The benefits could differ each year; do check the current benefits available.


Note: Majority of information has been derived from various banks of India. For more information regarding home loans please contact our CRM.