By Chaitali Dutta
I had taken a car loan of Rs 10 lakh last year. Next month, I want to prepay Rs 5 lakh from my savings. Will the bank charge any penalty for prepayment?
—Sudeep Gupta
Usually in a floating rate car loan, prepayment is possible after 12 EMIs have been paid timely. However, some lenders may levy a charge on the prepaid amount. Please find out from your financing organisation about the charge details.
My home loan was disbursed six months ago. Can I get a top-up loan? Will the interest rate of the top-up loan be the same as the home loan?
—Gaurav Prasad
Yes, a top-up loan is possible for additional work in the financed house. However, the interest rate may differ from the original home loan. You will be required to pay a separate EMI for the top-up loan.
My daughter who is staying abroad wants to study for a specialised design programme. Can she take a short-term loan from India and what kind of collateral will we have to arrange?
—Deepak Pant
Do check if the university and the course are eligible for an education loan in India. It will be beneficial from the interest rate and income tax exemption perspective. The loan tenure would be 5-7 years. If an education loan is not possible, explore a loan against an asset like a loan against bank FD/ gold/ insurance policy/ MFs. Here the interest rate will depend on the collateral you are offering. The term of the loan may be shorter and early payment is possible.
I need a loan of Rs 5 lakh and will be able to repay in six months. Should I take a gold loan or a personal loan?
—S K Rao
A gold loan will carry a lower interest rate and will have a lower tax outgo. A personal loan is free of collateral hence is more expensive. It may sometimes come with restrictions on prepayment.
My son is an NRI based in the US. He wants to invest in a property in India. Can he take a loan from a bank in India and what would be the interest rate and repayment terms?
—Manoj Jha
NRIs working abroad can avail of home loans in India for buying property in India. The interest rate is the same as that for resident Indians. Some banks may have a special offer for NRIs for a certain period. The loan tenure can vary from 5 years to 20 years.
The writer is the founder of AZUKE Personal Finance Advisory.
(Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited.)
