What are the mistakes that can ruin your home loan?

Availing a home loan is a tedious process which involves a huge sum of money. Before applying for a home loan, the applicant should do his or her research carefully and one can never be too careful. Mistakes while availing a home loan can prove to be fatal. Some of them are:

• Not having enough money to repay back the principal loan amount: This is the most fatal mistake a borrower can make when availing a home loan. The maximum loan amount that is approved by a financial institution is 80% of the total property value. While providing the loan, the financial institution will also check the CIBIL score of the applicant. Before the borrower applies for a home loan, he or she must make the down payment first. For instance, if the value of the property in question is Rs.1 crore, the maximum loan amount that can be availed by the borrower is Rs. 80 Lakh. The difference between the loan amount and the principal amount is the down payment value. The down payment amount should be deposited by the borrower at the time of availing the loan.
• Availing a loan with the principal loan amount that is not affordable: Before you apply for a home loan, consider the EMI amount that is to be paid every month. Ideally, the EMI amount should not be greater than 30 to 40% of the total monthly income of the borrower. Determining the EMI amount on a future increment is ill-advised. 
• Opting for the wrong home loan option: With so many home loan options available in the market, it is not easy to select the right home loan. Home loans are structured in different ways with some financial institutions offering floating rates, others offering semi fixed rates and overdraft benefits. It is the responsibility of the borrower to identify his or her requirements and select the home loan depending on that. Often, the applicant ends up paying more money than he or she probably should. 
• Opting for a loan with the incorrect tenure: Selecting the loan tenure is also very important for the borrower. It depends on the financial capability of the borrower. If the loaned amount can be paid back in the determined loan tenure, the borrower should opt for a short-term loan as the rate of interest is usually low. If the principal loan amount is high, it is better to opt for a long-term loan. Defaulting on EMI payment will result in fines to be paid by the borrower. 
• Not doing proper research in the market: With various websites now available for aspiring home loan applicants to check home loan, research should be done thoroughly in order to pick the best home loan option as per the requirements and financial capability of the borrower. 
• Applying for a home loan with a poor credit score: Applying for a home loan with a poor credit score will harm the applicant’s chances of getting the approval for a home loan and if the application is rejected, chances are that the credit score will go down even further. Hence, it is advisable to maintain a healthy credit score. 
• Not applying for insurance when availing a home loan: This is a common mistake made by applicants when applying for a home loan. In situations of financial distress, the applicant can use the insurance to protect himself or herself and the family as well. 
• Studying the loan agreement thoroughly: It is essential for the applicant to study the terms and conditions of the home loan carefully before signing off on the agreement. If as the applicant or the borrower, you do not agree with any terms and conditions in the agreement, it is better to dispute it with the lender.       

Steps to choose the right lender for your home loan

A home loan is a pretty expensive affair and the repayment often goes on for more than 10 years - reaching 30 years in some cases too. Also, the minimum sum on a home loan can easily range in the lakh. So, it’s absolutely essential to approach the right lender so that you don’t have to pay too much interest or fees that you already need to. Here, we will talk about how to choose the right lender for your home loan.

1. Choose an NBFC: If you have tried applying for a loan, you will have come across a number of Non-Banking Financial Companies (NBFCs) that have risen in number over the last decade or so. As the name suggests, these aren’t your typical banks and they lend money just the same irrespective of what loan you’re looking for. Before they arrived, banks had the monopoly on deciding the lending structure and the interest on a home loan. However, NBFCs have vastly changed the way the market works. For starters, they have given rise to healthy competition in the sector and have slowly taken a fair share of the market, threatening the power previously wielded by banks. If you feel a bank may or may not entertain your requests for a lower interest rate, you should consider applying for a NBFC as they often try to go toe-to-toe with some of the leading banks and provided loans at competitive rates.
2. Compare between different offerings: When you decide to go for a home loan, you need to look at all the offerings that are available to you. For starters, you can use comparison as a tool and compare the loans provided by 3 or 4 different lenders. Go and have a sit down with each of these banks and ask for the best rate they can offer. Sometimes, a discussion such as this can get you an interest rate that is way below the market rate, so that’s worth your consideration. Also, talk about all the other aspects of the loan such as the processing fees, stamp duty charges, and basically other charges involved with a home loan. Basically, if you are getting a lesser rate home loan, it means that you are likely paying more than most on one or more of these charges.
3. Figure out what you want: A home loan for a new property and a resale property is slightly different and should be approached slightly differently. Know what you are looking for exactly, what type of interest rate you are looking at (fixed or floating), how much down payment you have ready, and if the lender will ask for more in your case, and also think of how you service the EMIs on a month-on-month basis. Answering all these factors satisfactorily is highly important when availing a home loan because repaying it takes more than a decade and even more in some cases.
4. Check the lender out: If you have done enough research and have already decided to take a loan from a particular lender, stop and think: Does the lender have a good track record? Are they going to make your life difficult by adding unexpected charges to your loan? You need to have a clear idea on where your lender stands in the market, if the lender has a reputation of strong arming their borrowers, there’s a likely chance they might do so with you. So, it’s always better to read reviews, talk to known acquaintances who have a loan from the same lender, and then decide on whether or not you should take a loan with them. 
5. Know that lowest rate isn’t always the best: There’s something called clickbait - and if you’ve been on the internet long enough, you will have come across it several times. These make tall and practically unreachable claims with the content they offer and offer underdeliver at all times. Somer lenders too are guilty of using such a tactic. To begin with, they will put up a loan for the lowest interest rate - a few basis points lower than the prevailing market rate just to catch the prospective borrower’s attention. Once they have reeled you in, they will give you a list of all the charges you may have to pay to get the loan. So, make sure to not fall for such ploys and go with reputed lenders that have been in the business for long.
6. Have a higher down payment ready: A down payment is often the first hurdle facing a home loan borrower. Typically, a lender will only give you 80% of the loan amount; 85% in some cases while the remaining 15% - 20% should be taken care of by the borrower. The higher the down payment you have, the better it is for you as you can get a loan at slightly improved rates and have chances of getting your loan approved at a much faster rate than anybody else. Having a higher amount ready tell the banks that you are confident and serious about what you are doing, which will help them make the decision faster.

 A home loan can be a massive burden for a borrower as they need to be repaid over a period of 10 - 25 years, while maintaining all your other financial responsibilities. Following the steps mentioned above will help you get the best home loan for your circumstances possible.

How To Go About Rectifying Errors In Pan Card?

When applying for a PAN card, if we are not careful while filling in the details asked for the form errors can creep in. These errors if not rectified can later result in some problems when the PAN card is to be used for certain purposes. When it comes to rectifying the errors in the PAN card, many applicants have doubts or are simply unaware of the process that needs to be followed. In this article, we take a look at the detailed process of how an individual can go about rectifying mistakes in the PAN card.

To rectify mistakes in the PAN card online, the steps mentioned below need to be followed:

• First, the applicant needs to visit www.tin-nsdl.com.
• Next, the applicant is required to select ‘PAN’ from under the ‘Services’ drop-down menu.
• Thereafter, the applicant needs to click on ‘Apply’ under the tab ‘Change/Correction in PAN Data’.
• On doing so, select the ‘Application Type’ as ‘Changes or Correction in existing PAN Data/ Reprint of PAN card (No changes in existing PAN Data).
• Next, select ‘Category’
• Following that, fill in the details like name, date of birth, e-mail ID, and mobile number.
• Enter the Captcha code and click on ‘Submit’.
• On doing so, the applicant will be provided with a 10-digit Token number, which will also be sent on the email address provided in the PAN application.
• Next, the applicant is required to click on ‘Continue with PAN Application Form’ to fill the remaining PAN application form.
• Check the option from among the options like ‘Submit digitally through e-KYC and e-Sign (Paperless)’, ‘Submit scanned images through e-Sign’, and ‘Forward application documents physically’ provided on the top of the page.
• Next, enter the PAN card number whose details are to be corrected.
• Fill in the details asked for in the form
• After filling the form, the applicant needs to upload identity, age and residence proof.
• Next, go through the details before saving the form to avoid errors.
• The next step that the applicant need to follow is to make the payment.

Note: For Indian residents, the fees is Rs.110 while for those who have address outside India the fees is Rs.1,020

For offline correction of errors in PAN card, applicants are required to follow:

• The applicant needs to download the form from the website.
• Fill in the details asked for in the form.
• The completed form along with the necessary documents are required to be submitted at the nearest PAN centre.

It needs to be mentioned here that the PAN correction form is also used for issuance of PAN card. Hence the applicant needs to make sure that the checks the correct option when applying for rectification of PAN details.
Always use the JS Compressor to shrink before you publish a website.

Go the online way for hassle-free, faster home loan approvals

The credit landscape in India is witnessing a revolution of a new kind. As innovative technologies are developing, the FinTech industry is tying together lenders and borrowers in a new way. Loans can be availed without having to wait for long hours at the bank. For example, if you are planning to apply for a home loan, there is no need to run around from bank to bank with a heavy file in hand. Thanks to the digital revolution, there are several platforms through which you can get your housing loan approved in a much more secure and faster manner. Read on to learn more about the advantages of taking the online route.

Better access
There are a lot of processes involved in applying for a home loan. Traditionally, you would have to approach the bank physically to seek out information on offers, interest rates, etc. Now, all the important information can be found online. Even sourcing the loan application form becomes much easier as it can be downloaded online.

Constant status updatesProspective borrowers are regularly updated about the status of their home loan application. From the time they login to their online profile to the time of the reimbursement of the loan, the customer is privileged enough to get constant updates.

Better reach
The digital revolution in finance is making it easier for all sections of the society to have access to credit. This means that people from remote and rural areas also have a high chance of getting access to information and apply for loans. Even if there are no banks in such areas, banking services can be availed online.

Turnaround time reduces
There is no need to wait in endless lines and run around trying to get your paperwork in order. You can compare home loan interest rates offered by various lenders online and apply for a home loan at the click of a button. Loan approvals also happen at a much quicker pace. This way, the end customer receives better services and the bank saves a lot of time.


Tailor-made products
One of the other main advantages of this type of loan application method is the fact that customers can customise their loans as per their personal financial requirements. This will help a lot of people get access to better credit facilities in time of need.


Paperless process
The entire process involved in applying for a home loan is paperless. All you have to do is to scan and upload documents. Also, have in place an e-KYC system. This is probably one of the main advantages of the online application process.

Things to know before applying for a home loan in India

1. Understand eligibility: You will not get the loan approval unless you meet the eligibility criteria. This simply means that the lender will assess if you will be able to make EMI payments based on the salary that you take home. Ideally, you should not be spending more than 50% of your salary on an EMI. This is one of the most important factors that will be taken into account before a bank approves your loan. Remember that any additional perks or reimbursements that you get will not be considered to be a part of your salary. Another thing to keep in mind is the liability aspect. If you have other loans in hand, this also plays a role.
2. Decide on tenure and EMI carefully: The longer the tenure for your home loan, the more interest you will end up paying. This means the total cost of your loan increases. This is why it is important to choose a tenure wisely. Do not go for a longer tenure just because you want to pay a lesser EMI. For example, if you are taking a loan of Rs.10 lakh for 20 years at the rate of 9.55% per annum, the EMI you will be paying will work out to be Rs.9,353.99 per month. However, the total interest paid will be Rs.12,444,956. On the other hand, if you take a loan for the same amount and the interest rate for a lesser tenure, let’s say 15 years, the EMI per month will be Rs.10, 472.44. Though the EMI is slightly higher, the interest paid on the whole loan will come down to Rs.8,85,038. 
3. Choose the type of loan: There are two types of loans offered based on the type of interest rate that is charged. One is a fixed rate, where the interest rate remains fixed throughout the tenure of the loan. On the other hand, if you have a floating rate, the rate of interest fluctuates based on various market conditions. Fixed rates are higher than floating rates in most cases. So, if you go for a floating rate, the EMI you pay can increase or decrease based on the changes in market conditions. 
4. Compare interest rates: The first and most important thing to do before you apply for a home loan is to look around for interest rates. Under no circumstance should you go for the first lender that approaches you. Do some thorough research and shop around for the best rate. However, do not make this your only parameter. It is also wise to read up on the bank that is granting you the loan or speak to some existing lenders.
5. Read all the documents: A home loan approval application is a legal document that comes with certain important terms and conditions that you must be aware of. Be mindful of how your bank defines a ‘default in payment’. Scrutinise all the clauses that are offered and it also makes sense to consult a lawyer before signing any agreement in this regard.

Final words
If you are an old customer and have a long relationship with the bank, it is important to make  sure that you negotiate for a better interest rate. This especially holds true if you have all documents in place and a good credit score to add to it.

What is internal home loan balance transfer?

Home loan balance transfer is a process where the home loan of a particular borrower is transferred from one bank to another, usually for a lower rate of interest. The new bank will pay off the loan in entirety to the existing bank, and all future home loan payments will have to be paid towards the new bank after the home loan transfer.

In case of an internal home loan balance transfer, it is a process where the home loan is transferred to another individual within the same bank. Let’s say that you have an existing home loan with a particular bank and would like to sell your house. At the same time, the buyer of the property would like to avail a loan to make the purchase. Instead of having to close your existing loan, and the buyer having to apply for another loan, the buyer simply takes over the existing loan. This is known as internal home loan balance transfer.

Requirements to internally transfer your home loan

• A letter of consent from the existing borrower to foreclose his loan in lieu of the property being sold 
• A loan application form that is duly filled by the new owner of the property
• The processing fee for the loan must be provided to the bank
• No objection certificate from the developer
• Any prepayment charges will have to be borne by the new owner

Steps To Manage Your Home Loan EMI

The home loan market has boomed in the last couple of years and it has allowed a lot more people to purchase a house. However, the flipside is that many home loan borrowers are having trouble with the EMIs. Usually, the monthly instalments that need to be paid are overwhelming to the borrower to the extent that their lifestyle has been compromised. And, since a home loan is a long-term investment, one must be wary about being unable to manage the EMI associated with it.

Mentioned below are some tips to help you manage your home loan EMI.

• Understand your monthly financial outflow – Prior to obtaining a home loan, understand the monthly outflow of cash that you need to set aside to pay off your EMI. There are several online home loan EMI calculators to help you determine this. Make use of these calculators to gauge if you are capable of repaying the loan. If the EMI exceeds 40 – 50% of your monthly income, it is a good idea to reconsider availing the loan. If you have other debts, reduce these debts from your monthly income and calculate 40 – 50% of this amount. If your home loan exceeds this amount, it is advisable to reconsider your home loan.
• Pay higher EMIs – Choosing a home loan with a higher EMI means that you will save on the total interest payable. This also helps you reduce the tenure on your home loan. However, one must keep the previous point in mind as well when opting for a loan with a higher EMI. One must not simply opt for a higher EMI if the current lifestyle is being compromised.
• Increase your EMI payments – Home loans are long-term investments, and during the tenure, an applicant’s income is bound to increase. Increasing your EMI as and when your income increases will help you save on the total interest payable and will reduce the tenure of the loan as well. This also applies to instances when a borrower receives a bonus or a lump sum amount. It makes sense to pay a part of it or the entire amount towards the home loan. This is because it helps you save on a substantial amount of the total interest payable.
• Transfer your home loan – If you have been paying off the home loan diligently for a while, you can request your bank to reduce the rate of interest. If the bank doesn’t oblige, you can choose to transfer your home loan to another bank. Most banks allow home loan balance transfers and this can help reduce the rate of interest and also modify the EMI. in this process.The new bank will pay off the home loan to your existing bank and all future EMIs will have to be paid to the new bank. However, it must be understood that after a while of paying back the home loan, you would primarily be paying back the principal and only a part of the interest. This means that you have paid off most of the interest on your home loan. It is, therefore, illogical to transfer your home loan after a certain point of the tenure of the home loan.
• Make prepayments – As mentioned earlier, make the effort to utilise any additional income you may receive to make partial prepayments toward the home loan. Although you may view it as losing out on a lump sum amount at once, you are actually saving on a lot of money by making prepayments. Usually, banks do not charge you on prepayments, and preclosure. Therefore, in order to save money, it is logical to make prepayments.
• Reassess your investments – If the total return on your investments is lesser than the total interest payable on your home loan, it is sensible to withdraw these investments to pay off the home loan. This is so because the marginal interest you avail from the investments will be overshadowed by the total interest you save by prepaying the home loan.

A home loan is a long-term commitment, therefore, it is important to make sure that you are financially capable of repaying this loan even before applying for it. Use online platforms that will help you assess the financial outflow you would have to incur to pay back the loan, and proceed cautiously. In case you are burdened by an existing home loan, follow the steps mentioned in this article and maintain financial discipline for a while. This will help you ease the EMI burden and will also help you pay off the home loan faster. Also consider refinancing your home loan to reduce the EMI you have to pay. However, this should be considered only after negotiating with your existing bank first.

Guide to LAP or Loan Against Property

When you avail a loan from a bank or an NBFC against your property that you keep as collateral, it is called loan against property. This is a secured form of loan as a collateral is involved. The repayment guarantee is provided in the form of collateral by this borrower.

Often, individuals ask how much loan can they avail if they go for loan against property. Thing is, you must first know the value of the property that you are going to offer as collateral. The loan that you can avail depends on the value of your property.

Generally, banks and other lenders offer up to 65% of the property value as loan against property. You must also understand that every loan comes with a rate of interest. Different lenders offer different rates of interest with their loans. You will be charged an interest rate ranging between 12% and 16% with the loan against property.

The tenure of the loan will be 15 years. However, if you wish to get a clear idea about the tenure associated with your loan and the rate that you have to pay, you should talk to the bank or NBFC from where you are getting the loan. The tenure and rates may vary from one lender to another.

Uses Of Loan Against Property:

Loan against property or LAP is a great way to avail funds when you need to arrange money for any high expenditure. Find below a list of things that can be carried out using loan against property:

• Wedding
• Purchasing land, a new house, or a commercial property.
• Setting up your business.
• Medical emergencies.
• Studying abroad.
• Honeymoon, family vacation, solo travel.

Please remember that these are not the only things that you can do using the loan against property. However it is very important for you to understand that the money should be put to good use. In case you end of spending the money on something that is not worth it and then fail to repay your debt, you might end up losing your house to the lender.

Types Of Properties Against Which You Can Avail Loan Against Property:

The types of properties against which you can avail loan against property are mentioned below:

1. Self-owned but rented commercial property.
2. Self-owned commercial property.
3. Self-owned plot of land.
4. Self-owned but rented residential property.
5. Self-owned and self-occupied residential property.
6. Self-owned residential property.

Factors That Determine Eligibility For Loan Against Property:

Your ability to repay the loan, financial status, and the property value are some of the common things that are considered for the determination of your eligibility towards the loan against property that you apply for. Your current debts and all your savings are also taken into consideration for determining your loan against property eligibility.

Perks Of Applying For A Loan Against Property:

• Loan against property offers a long tenure and make EMI payments easy for you.
• When compared to a personal loan, you can avail a bigger amount with loan against property.
• Since it is a secured loan, the rates are much lower than any other unsecured loan.

Bottom Line:

It is extremely important for you to know your financial status before you apply for a loan against property. Compare various loans and pick the one that suits your needs the best.