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.