I am 55 years old. What’s the age limit for a loan application?
—Lal Krishna Most banks have a maximum age limit of 60 years for salaried individuals since that’s the retirement age and 65 years for the selfemployed. The maximum tenure is restricted by the age of the borrower at the end of the tenure so as to ensure that the loan gets fully paid on or before the retirement age. However, some lenders like HDFC do have step down plans where the EMI is higher till the age of retirement and then lower after retirement assuming the loanee is eligible for pension. However, it is likely that the loan tenure will be restricted to five years (if salaried). You can take a joint loan with your earning spouse or children to increase the loan eligibility and ensure the loan is available for a longer tenure. I took a home loan in 2002 and repaid it in 2011. But now I want to take a loan to construct one floor. Can I get a rebate in income tax under 80c and 24b again and what are the other conditions?
—Manoj Juneja Yes, you can claim the benefits under Section 24b and 80c for construction of the first floor in your existing property subject to the fulfillment of other conditions such as completion of construction within three years from the date of your first disbursement. In case this is let out you will get full interest benefit but in case it is used for your residence your claim shall be restricted to R1.5 lakh per year. What is the maximum amount of loan given by the banks for a resale flat? My annual CTC is R3.5 lakh. How much amount of loan I am eligible for?
—Swati Shetty You can get a home loan to buy a resale property based on your income, value of the property and the title of the property. The age and the condition of a building also have a bearing on loan eligibility. The banks are nor- mally reluctant to lendmoney for a property, which is very old. However, if the property is in good condition, there should not be any problem in getting loan from any bank. Please note that most banks get the property valued independently and they will give you home a loan based on the value arrived by their valuer rather than the value mentioned in the purchase agreement. Frequently, the valuation as determined by the banker’s valuer is significantly lower than the actual cost and hence your effective down payment goes up.
As a thumb rule, if you are below 40 years, you should be eligible for around four times your net annual income (in your case around R15 lakh) up to a maximum of 80% (90% for loan less than R20 lakh) of the agreement value of the property for 20 years tenure. While assessing your eligibility the banks will take into account any existing loan being serviced by you. Please note, Your EMI – including other loans – should not exceed 40-50% of your net monthly income.