Avoid having bad credit history

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: Amitoj Sethi

(Director, www.deal4loans.com)

I own a house along with my brother being a joint holder. Both of us are salaried employees for the past two years. We want to take a home loan for carrying out repairs and further construction. The estimated cost is Rs 2 lakh for a period of 7 years. Please suggest me some banks and the rate of interest.

The rates of interest for home improvement loans are currently in the range of 11% to 13%. You can approach consolidation portals like www.deal4loans.com for your loan requirement. They are in a position to put you in direct contact with multiple banks who will be able to fulfill your requirement in one go.

I have taken a home loan of Rs 12 lakhs from ICICI bank and I would like to know how I can change this to some other nationalised bank in Bangalore. Please let me know the names of banks that offer this facility and contact numbers too.

You can avail balance transfer facility from any of the nationalised banks like SBI, Syndicate Bank, Bank of Baroda & many more also; you can check with private banks as they are also offering competitive prices. But before switching over the loan please consider the pre-payment penalty that you would require to pay to the ICICI bank, ROI charges & final outcome of the pre-closure with the bank.

I have taken some personal loans and have defaulted a couple of times. This has given me bad credit history. What are the possibilities if there are two or three defaults?

You cannot correct past bad credit history. You can only ensure that you do not default on any incremental payments to improve the credit history. If your credit history remains bad or deteriorates, you will need to pay higher interest rates on your loans or may not get credit at all.

I am planning to buy a piece of land now and begin construction of my house after a year. Am I eligible to take home loans and will I get tax exemption for the EMI?

You can take a home loan for purchase of land and construction of a house on it. You get a period of 2 years to complete the construction from the point of purchase. You will get tax exemption on the EMI that you pay towards this loan.

I have taken a personal loan for Rs 2.4 lakhs from ICICI bank and I have repaid for 6 months till now. My monthly EMI is Rs 7,340. Am I eligible for another loan anywhere based on this repayment track of 6 months?

A lot of banks offer personal loans based on the track record of existing personal loans. The repayment tenure they look at is between 6 months to 30 months.

I am working in an MNC and drawing a monthly salary of Rs 40,000. There is a home loan of Rs 10 lakh for 20 years in my name, along with a car loan of Rs 2 lakh for three years. My friend and I want to purchase a plot near my company, which costs Rs 26 lakh. I want to know whether I will get a home loan. Can my friend be a co-applicant in this case and will this help me in getting an income tax exemption?

You can get a loan to purchase the plot and construct your house on the same. Most of the private banks like HDFC and ICICI offer this facility. Ideally banks only allow blood relatives to be co-applicants on the loan, but there are cases where friends have been allowed to be co-applicants/ guarantors with some additional documentation. The IT exemption limit is on an individual basis and not linked to the number of properties the loans are taken for. You are already availing of the tax exemption on your current home loan EMIs that you pay. Taking this additional loan will not benefit you in any significant manner. If you dispose off the earlier property, you should still be able to use the IT exemption through this new loan.

I want a personal loan of approximately Rs 4 lakh. I have a credit card of ICICI bank since two years with a credit limit of Rs 1.25 lakh and currently it has a balance of Rs 80,000. Which bank can provide me the best deal?

You could approach banks directly or aggregators like www.deal4loans.com. You could opt for a loan against your income documents like bank statements and salary slips or against surrogate credit products like credit cards.