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Home Loan is a secured loan given by a bank against the security/hypothecation of an underlying property. In the event of failure to repay by the borrower, the bank can, subject to laws of India, attach/sell the underlying property and recover the principal amount and any outstanding interest thereon. A home loan can be availed for buying an under-construction property, resale property or even to construct a house on a vacant piece of land. 

Loan eligibility is dependent on primarily the following factors:

  1. Cumulative net monthly salary of the applicant and co-applicant.
  2. Quantum of loans and credit card outstanding that you already have. Typically a bank will not give a loan if the total EMI obligation (including the current home loan that your are trying to apply for) exceeds 50-60% of your total net take home salary.
  3. Loan to asset Value (LTV) ratio of 75% which means that the customer has to fund the remaining 25% through his savings or any other source.

The final decision to grant a loan lies with the credit department of a bank. Some of the reasons why a loan can be rejected are:

Possible Issue:
Already running several loans and hence a bank may not be comfortable with your existing leverage levels vis-a-vis your salary level.

Possible Way Out:
a)If you have a spouse who is also working, you can add her as a co-applicant to boost the combined salary levels or
b) Try to pay off some of your debt so that your leverage levels can come down or
c) Do a balance transfer/debt consolidation/re-financing of your existing loans such that the rate of interest on loans can also come down and additional loan can also be provided Possible Issue:
Issues in your credit history as reflected in your CIBIL, Equifax reports. Possible way out:
a) If the issue is a minor one like some delay in payment of credit card due then we can try your application in some other bank who can possibly take a lenient view on the deviation.
b) If you think that the credit report is erroneous and you have sufficient documentary proof we will represent the case to the bank and try to convince the credit team.
c) If the issue is a major one like write off, settlement of any past dues etc then it might be difficult to obtain a loan. Certain mitigation factor like if you/your spouse/your parents have an own house in India can give comfort to certain banks to give you a loan. Possible Issue:
Most banks have certain internal credit parameters to evaluate a loan which is kept confidential and not shared with us. Several demographic, financial and credit aspects go into these internal evaluation. You might not have met the minimum cut off for obtaining a loan. Possible way out:
Finance Buddha can re-apply for your loan in one of the other 10 plus lenders that we are affiliated to

Pre closure means that a customer wants to close the entire principal outstanding amount at one go. Whereas part payment means that a customer wants to repay only a certain portion of the outstanding amount. Please ask our advisor for more details on this when you loan is being processed.

Home Loan preclosures are allowed without any extra charges as long as the mode of repayment you have chosen is Floating rate of Interest and not a fixed rate of interest. Regarding part payment, some banks may have a restriction on the number of times you can do a part payment per year and also the amount that can be part paid in a year. Please ask for clarifications to our or the banks’ loan advisor on all these factors before signing the loan document.

Unlike personal loans, every bank has a single rate of interest for all customers and it does not vary from customer to customer. The Fixed rate of interest will be slightly higher than the Variable rate of Interest. So it depends on which option you choose.

Finance Buddha will work with the banks to try and get you the loan within 7 to 15 working days of submitting completed documents.

The applicant and the co-applicant needs to provide the following documents:

  • Identity proof (PAN card)
  • Residence proof
  • Last 3 months salary slip
  • Last 6 months bank statement
  • 2 Passport sized photograph
  • Form 16
  • Property documents
  • Receipts for initial down payment

These are indicative list and more documents can be required depending on the bank.

All home loans repayment happen in the form of an EMI (Equated Monthly Installment) through the customer’s bank account. The customer needs to give few PDC’s (Post dated cheques) and sign an ECS mandate in favour of the bank disbursing the loan.

The bank will levy certain ECS bounce charges/penalties. In addition it will get reported in your credit report. Depending on the severity of the default it can have serious impact on your future credit possibilities like a home loan, car loan etc. In addition, the banks can also take legal action against the borrower.

The current rate of interest is varying between 9.40% to 9.70% depending on bank to bank. The processing fee is around Rs 10,000 which needs to be paid to the bank upfront at the time of submitting the application.

To calculate the borrowing limit, one can combine the earnings of oneself and the spouse or children. The combined income will then decide the borrowing limit. Minimum limit is INR 300,000 Maximum limit depends on the earnings combined For loan up to INR 2 Million – 15% of the property value in market For loan above INR 2 Million to up to INR 7.5 Million – 20% of the property value in market For loan higher than INR 7.5 Million – 25% of the property value in market

Age of the applicants: The age specifically of the primary applicant. Dependents: Number of dependents in the family of the applicant Fixed Obligations: Assets and liabilities like existing loans, etc Income: Stability and income returns of the primary applicant’s occupation.

Yes, absolutely. You can avail the Axis Bank home loan for buying a home, constructing a home, repairs of your home, home improvement and its renovation.

No, you get the opportunity to choose which kind of rate of interest you want to pay. You can pay through fixed rate of interest or you can pay by the floating rate of interest which depends on the MCLR and keeps changing.

First of all, the applicant will fill in the details and with required documents, submit the application form. If the documents and all the eligibility criteria are met, the bank will sanction the loan and notify the customer about it within 30 days of the submission of the documents and the application form. The 30 day submission period starts from the day the customer gets the receipt of the application form. If the loan cannot be sanctioned, then that will be notified as well to the customer. Then, the legal proceedings shall follow. The Axis Bank representative will carry out the technical evaluation of the property.

It is calculated on the basis of the principal loan amount, the tenor of the loan and the interest (floating or fixed) that is charged. After part payment or interest rate changes, the EMI is also bound to change.

The due date will be fixed and told to you.

It is the rate of interest levied on the part payment until the EMIs start to be paid.

Whenever there will be an increase in the rate of interest floating, then Axis bank will try to increase the loan tenor. However, if this impacts the rate of interest, then EMI will have to be increased.

It can happen in some cases. For this, the bank will have to check your loan paying capability. For this, the bank will need the below mentioned documents for verification: Salary slips for Last 6 months Bank statements indicating regular salary. Photo identity and address proof A letter for the change undersigned by you.

Whenever there will be an increase in the rate of interest floating, then Axis bank will try to increase the loan tenor. However, if this impacts the rate of interest, then EMI will have to be increased. If you want to get your EMI reduced in the latter case, you must make some part pre payment to Axis bank.

Yes, the bank will help you. You can switch your rate of interest as per the following switching amounts: Fees while switching from higher floating rate to lower is 0.5% of the outstanding principal Switching fees from floating rate to fixed rate of interest: 1% and cannot be greater than INR 10,000 Fees while switching from higher fixed rate to lower fixed rate is 0.5% of the outstanding principal Switching fees from fixed rate to floating rate of interest: 2%

Yes, it can be paid partly. Since the loan is disbursed partly, the interest will also be proportional to this. Therefore, you can pay the loan at lowered rate of interest.

The EMI can be paid through various modes: Post dated cheques: You can submit post dated cheques by your due date of the EMI at the nearest Axis bank loan centers. Electronic Clearing Service: By this option, non Axis bank account holders can pay their EMIs automatically at the end of the month. Standing Instruction: If you have a savings, salary, or current account with AXIS Bank then your EMI can be automatically deducted from your account at the end of your monthly cycle.

You can pay these cheques at the nearest Axis bank loan centers.

Yes, you can pre pay your loan. For this, there will be no pre payment charges on the floating rates of interests. However, charges will be applied on fixed rate of interest.

You can foreclose your loan by clearing all the dues. Charges are applicable.

You can get the loan papers after 16 days of paying the full loan.

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