CHEQUE BOOK

HT Estates - - NEWS - Harsh Roongta

My wife and I have taken a loan worth R30 lakh for 15 years. We were both work­ing and man­aged to pay the dues for the last three years. Now we have shifted back to our na­tive place and are with­out jobs. Con­se­quently we are un­able to pay the hous­ing loan, the equated monthly in­stall­ment for which works out to nearly R30,000. How should we exit?

—San­jiv Sinha Any loan taken from a lender has to be re­paid in full and that too in time. If there is a gen­uine rea­son, the lender may be sym­pa­thetic and agree to re­struc­ture the debt. But you will still need to show how you will clear the re­struc­tured debt in fu­ture based on in­come sources that you can show or prove. Please note that it is not oblig­a­tory on the part of the lender to agree to any re­struc­tur­ing of the out­stand­ing amount.

It is in your own in­ter­est to make ar­range­ments for the pay­ment with the lender to avoid be­com­ing a de­faulter.

De­fault­ing on loan re­pay­ment will jeop­ar­dise your abil­ity to get any loans or credit cards in the fu­ture. More­over, the lender can take pos­ses­sion of the prop­erty and sell it off in order to re­cover dues if the de­fault per­sists for a long pe­riod.

If the full loan amount is not re­cov­ered from such a sale, the lender can also file a case against you for re­cov­ery of the bal­ance amount. If you can­not pay the loan, you have the op­tion to sell the prop­erty with the con­sent of the lender and pay the out­stand­ing loan amount. You are likely to re­cover a bet­ter price if you de­cide to sell the prop­erty.

Which banks pro­vide land loans and what are the gen­eral terms and con­di­tions?

— San­tosh Singh Len­ders are more se­lec­tive while pro­vid­ing plot loans than home loans. Plot loans are avail­able for a shorter ten­ure as com­pared to home loans and are more ex­pen­sive (at least 0.25% to 1% higher) than nor­mal home loans. Plot loans are gen­er­ally avail­able only when the plot is pur­chased from statu­tory au­thor­i­ties or de­vel­op­ers who are preap­proved by the con­cerned lender.

Even the down pay­ment re­quire­ment is usu­ally high and stands at around 35% to 40%. In case you are plan­ning to con­struct a house on such a plot soon, please opt for a com­pos­ite loan cov­er­ing the cost of con­struc­tion to get the loan eas­ily. You will also be able to get tax ben­e­fits on the en­tire loan.

The lender re­quires doc­u­ments for proof of in­come, iden­tity and res­i­dence for any loan. The lender will also want doc­u­ments re­lat­ing to the ti­tle of the plot that is be­ing pur­chased.

Not all fi­nan­cial len­ders pro­vide plot loans. HDFC Ltd, ICICI Bank, Life in­surance Cor­po­ra­tion Hous­ing or LIC Hous­ing and the State Bank of In­dia are some of the ma­jor play­ers, which pro­vide plot loans. But usu­ally the loan is given only if the plot is bought from a statu­tory au­thor­ity or de­vel­oper ap­proved by them.

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