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I took out a home loan of R12 lakh from a pub­lic sec­tor bank for 15 years in 2011. My EMI was R13,080 but the bank has been de­duct­ing R14,000 ev­ery month since I opted for ECS. They have told me that my loan would be cleared be­fore time. Is this true?

—R Ma­lik The rate of in­ter­est as per the orig­i­nal EMI comes to 10.25% per an­num and on the ba­sis of the ECS amount, it seems the rate of in­ter­est is 11.48% per an­num. The best way to as­cer­tain the ef­fec­tive rate of in­ter­est is to ask for the amor­ti­sa­tion sched­ule (break-up of in­stal­ments into prin­ci­pal and in­ter­est com­po­nent) of your loan. This will help to you clearly un­der­stand the rate of in­ter­est be­ing charged now. Even if the ef­fec­tive rate of in­ter­est is only 10.25%, the bank is not jus­ti­fied in deb­it­ing a higher EMI with­out any valid rea­son. You can ap­proach the branch man­ager of the bank from where you have taken the loan and ask for a clar­i­fi­ca­tion on the dis­crep­an­cies in the EMI amount. Put in a writ­ten com­mu­ni­ca­tion for the same. If you are not sat­is­fied with the re­sponse re­ceived from the branch, you can ad­dress your griev­ance to the nodal of­fi­cer of the bank, de­tails of which are given on the bank’s web­site.

If you are not sat­is­fied with the re­sponse from the bank or do not get any re­sponse within four weeks of your com­plaint to the nodal of­fi­cer, you should file a com­plaint with the bank­ing om­buds­man on the Re­serve Bank of In­dia web­site: www. bankingom­buds­man.rbi.

I am work­ing in an au­to­mo­bile com­pany and want a loan for re­con­struc­tion of my old house. The prop­erty is in my fa­ther’s name.

—Kapil Midha You should ap­ply for the loan with your fa­ther as co-bor­rower as he is owner of the prop­erty. The len­ders will treat this as a self-con- struc­tion loan. For this, you have to sub­mit the ap­proved plans along with de­tailed cost es­ti­mates from an ar­chi­tect or a civil engineer. Since you are not an owner or co-owner in the prop­erty you will not be el­i­gi­ble for any tax ben­e­fits in re­spect of the loan re­pay­ments even if the loan is sanc­tioned based on your in­come and you ser­vice this loan. The lender has to be re­as­sured about the fact that the ti­tle will pass on to you af­ter your fa­ther and that you will con­tinue mak­ing the pay­ment.

I have taken a home loan from a bank. I was pay­ing pre-EMI for last two years but the flat is not com­pleted and the builder is ab­scond­ing. The bank has dis­bursed 90% of the amount al­ready with­out even in­spect­ing the prop­erty. Last year I got mar­ried and since then I have not been able to pay the pre-EMI (now it’s been changed to ac­tual EMI by bank and the amount has been rounded). Now I’m not get­ting a home loan and we are stuck. What can we do?

—Kaushik Mukherjee Whilst the bank’s ap­proval is a good in­di­ca­tor of the le­gal ti­tle of the prop­erty it is in your in­ter­est to carry out your own due dili­gence of the prop­erty and the builder be­fore buy­ing it. It is the buyer who is re­spon­si­ble for check­ing on the prop­erty ti­tle or the pos­si­bil­i­ties of a de­lay in con­struc­tion and the associated risks. Your li­a­bil­ity to ser­vice your home loan is in­de­pen­dent of your in­abil­ity to get pos­ses­sion of the prop­erty ei­ther due to le­gal dis­pute or fault on the part of the builder. The bank does not take the re­spon­si­bil­ity for any de­lay on the part of the builder in con­struc­tion due to any rea­son. You should have con­tin­ued to pay the EMI in order to main­tain good credit rating. By not pay­ing the pre-EMI for the last one year you have spoiled your credit his­tory and that has very long-term im­pact on your abil­ity to bor­row from the credit sys­tem be it credit card or any kind of loan. This spoiled credit his­tory is re­spon­si­ble for your in­abil­ity to get any home loan now. Un­less you set­tle your old home loan there is no chance for you to get any fresh home loan from any lender.

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