Home loan is a loan disbursed by a bank or financial institution (lender) to an individual specifically for buying a residential property. Here, the lender holds the title of property until the loan is paid back in full along with interest.

Home loans are long term borrowing instruments with a minimum tenure of 5 years and a maximum tenure of 30 years. The tenure offered to you for your personal loan depends on the loan amount that is sanctioned to you by the lender along with other factors.

Anyone — whether self-employed or salaried individuals/professionals — with a regular source of income can apply for home loans. One must be at least 21 years old when the loan period begins and should not exceed an age of 65 years when the loan ends or at the time of superannuation.

If the interest rate on the loan varies periodically over the loan tenure, then it is called a floating rate home loan. Lenders have their own base rate which determines the rate of interest charged on a home loan. The base rates of banks are revised from time to time based on RBI directives as well as other factors, which leads to an increase or decrease in the EMI amount payable.

Fixed rate home loans are offered at a predetermined interest rate during the loan period and these remain unchanged during the loan period irrespective of market conditions. This can be a huge benefit when market volatility starts affecting interest rates. For instance, if the RBI increases interest rates on loans, then people with fixed rate home loan will not be affected by any increase or decrease in the market interest rates and the EMI amount will remain unchanged. This type of home loan is less popular these days.

Business loan is a 1-3 year unsecured loan given by banks, NBFC’s (Non Banking Finance Companies) or P2P lending platforms without asking for any collateral, guarantor or hypothecation of any assets. Entities like proprietorship, partnership, private limited company or public limited company are eligible for this type of borrowing. The usage of a business loan is left to the discretion of the borrower and can be used for working capital purposes, meeting short term cash flow requirements, investments into plant and machinery etc.

Loan eligibility is dependent on primarily the following factors:

• The credit score of the entity and/or the partner/director/proprietor of the borrowing entity as reflected in your CIBIL or Equifax report or any other credit bureau. Having a good credit score is a necessary but not a sufficient criteria. If the credit score is a border line case then the bank may take a subjective call to limit the loan amount
• The last 2 year financials of the borrowing entity. Factors like turnover, partner/director salary, depreciation, interest cost, net profit after tax are some of the key parameters that goes into deciding the loan amount.
• Ability to service the EMI for the current loan be requested as depicted by the Debt service coverage ratio (DSCR). Banks generally ask for a DSCR of 1.0 to 1.5 depending on case to case basis.

Some banks like Bajaj Finserv allow part payment. However, there can be restriction on how many times in a year you can part pay and the minimum and maximum amount that you part pay. Again, please ask for clarification instead of our or the banks’ loan advisor on all these factors before signing the loan document.

Borrowing entity's PAN card, address proof, last 2 years financials (balance sheet, profit & loss, audit report), last 6 months bank statement, VAT/service tax returns, partnership deed/MOA, existing loans repayment track record. Additionally, the partner/director's PAN Card, KYC, own house proof, ITRs etc. On case to case basis additional documents may be required.

You will need to furnish the following documents along with the completed application form. Relevant information would relate to the guardian and the student both, when the loan is jointly taken.

• Mark sheet of last qualifying examination for school and graduate studies in India
• Proof of admission to the course
• Schedule of expenses for the course
• Copies of letter confirming scholarship, etc.
• Copies of foreign exchange permit, if applicable.
• 2 passport size photographs
• Statement of Bank account for the last six months of borrower
• Income tax assessment order not more than 2 years old
• Brief statement of assets and liabilities of borrower.

If you are not an existing bank customer you would also need to establish your identity and give proof of residence.

• There is no additional charge or processing fee for education loans upto Rs.20 lakhs. For loans above Rs. 20 lakhs, processing fee of Rs. 10,000 + GST is applicable.
• For Scholar loans, there is no additional charge or processing fee irrespective of the loan amount.
• In case of land/ property offered as collateral, legal/ valuation/ mortgage charges will be applicable
• In case of land/ property offered as collateral, legal/ valuation/ mortgage charges will be applicable

The outstanding interest for the moratorium period will be added to the loan amount at the time of commencement of the repayment. The EMI will be determined on this amount at the time the repayment is to commence.

EMI stands for Equated Monthly Instalments. This Installment comprises both principal and interest components. Your EMI would be calculated depending on the Tenure you choose, to repay your loan. The EMI would be higher if you choose to repay within a shorter period as against a longer-term loan. A shorter repayment period, however, reduces your interest cost over the term of the loan.

Any loan against a residential or commercial property can be used for both personal and business purposes. In fact, you can use loan against property for anything other than speculative or non-prohibitive activities.

Processing fee for loan against any property varies from bank to bank and is generally around 1 percent.

Loans against property has a maximum tenure of 15 years, subject to the condition it does not exceed your retirement age. This condition however can be flexible in certain cases

You repay the loan in Equated Monthly Installments (EMIs) comprising principal and interest. Repayment by way of EMI commences from the month following the month in which you take full disbursement.

Yes. Prepayment is possible and there is no prepayment fee if you repay the loan after six months of availing the loan if you pay from your own source of funds without transferring the loan.