I have taken a housing loan from a private bank as ‘Resident home loan-variable rate-monthly rest.’ I find the ROI being charged is 14% since last Jan 2014. It has never decreased in line with their current ROI. The bank officials do not reply to my e-mails. What should be done? Please advise.
—J Mukherji Current (February 2015) competitive rate in the market for a loan amount below ₹ 75 lakh is around 10.15%10.25%, hence assuming your loan amount is below ₹ 75 lakh you can check if the existing lender is willing to reduce the interest rate to 10.15%-10.25%, even if it means paying a small conversion fee of upto 0.28% of outstanding loan amount. This will help you avoid the headache of transferring documents from one lender to another. If the lender is not willing to reduce the rate of interest, you can evaluate the option of switching the loan to another lender.
Since the National Housing Bank, which governs the housing finance companies has already instructed finance companies not to levy prepayment charges in respect of floating rate loans you will not have to pay any penalty for shifting such loans.
However, you may have to pay some processing fees to the prospective lender, though most of them usually agree to take over your loan from the existing lender without any significant processing fees. So effectively there will be no charge for shifting the loan to another lender.
You will need to have a good track record of payment to be able to get an offer from another bank to take over your existing home loan. I have taken a construction home loan from a reputed company in India. The loan amount sanctioned is ₹ 30 lakh but the amount disbursed is ₹ 10 lakh. I have constructed my house with the ₹ 10 lakh disbursed loan and financed the remaining with my own funds. The company has charged processing fees on ₹ 30 lakh instead of ₹ 10 lakh. My query is, can a company charge a processing fee on the sanctioned amount or on the disbursed amount? Please help.
— Pramit Singla The processing fee is the fee taken for processing your loan application and is either charged as a percentage of the loan amount or a flat amount and is usually nonrefundable unless mentioned otherwise. So in case you decide not to avail the sanc- tioned loan amount, the bank may not be liable to refund any portion of the processing fees paid earlier for the higher loan amount. I want a home loan but the houses I have seen are located in authorised areas and are very expensive. Is there any way I can buy an agricultural plot?
— MK Raut A loan to acquire a farmhouse (that is what a house on agricultural land is popularly called) will be very difficult to get as pledging of agricultural land and the house built thereon is not easy. Your best bet is to get a loan against some other security such as some other immoveable property or movable security such as shares, units, bonds, jewellery or life insurance policy with high surrender value. You can use that loan to buy the agricultural plot. I am interested in purchasing a flat from a private developer but the project is not located in an approved area. Can I get a loan from a private financial institution?
— T Singh If the proposed construction falls under the list of negative areas of the bank, the chances of getting finance for the purchase of the property seem bleak. You can try applying to the local co-operative banks.