I am looking to purchase a residential property (3BHK) in NCR. There are three options of payments: down payment plan, construction-linked plan, and subvention plan. Please advise on subvention plan advantages as compared with other two options.
—Ritesh Chaudhary Note that the risk of any delay in construction is on you so please do not agree on a full down payment offer in exchange for a price discount. No discount can justify the additional risks you take on this account. It is always advisable to go for a construction-linked plan for property to ensure that your exposure is in proportion to the stage of completion of the property rather than disproportionate. According to most interest subvention schemes in the market, a buyer does not pay any EMI during the construc- tion stage of the property for the first two years of the loan period. The pre-EMI interest for these first two years will be paid by the builder/ developer.
Also keep in mind that the bank does not guarantee on-time construction of the property and you will be held liable if the construction is delayed or if the builder defaults on the payment of interest to the bank. Remember, any default by the builder in payment of preEMI interest will severely affect your personal credit score.
I’m buying a commercial shop worth ₹ 50 lakh. I’ve already paid ₹ 25 lakh for it and want to avail a commercial loan of ₹ 25 lakh. A bank is ready to give me the loan. Please advice on the loan procedure and interest rate offers?
-Suresh Menon Different banks presume certain portion of your income as available for payment of EMIs of loans. It varies from bank to bank and there is no standard norm/formula. But normally the bank will assume that around 40% to 45% of your net salary is available for payment of EMI to serve all the loans. In case you have an existing loan it will have an impact on your loan eligibility.
The banks are very selective in granting loans for purchasing any commercial property. You can approach any commercial bank or NBFC for granting the loan to purchase a commercial property. The rate of interest on such loans is higher than regular home loans. Normally banks finance up to 60% to 80% of the property cost as a loan and the floating rate of interest starts from 12% pa. The loans are given for a maximum tenure of 15 years.
NBFC are more active in this sphere than large commercial banks. You will have to submit proof to the bank that the property has been allotted for commercial purpose. A few banks offer loans for purchase of commercial property at 11.75% to 14.00% pa while others offer interest rates of 10.85% to 12.6% pa for a maximum tenure of 15 years. With a monthly income of ₹ 40,000 you should be eligible for ₹ 15 lakh at the rate of 12 % per annum for 15 years tenure (assuming you are less than 45 years of age) and have no other loans.