By Chaitali Dutta
l My sister wants to start a business and needs some money. Can she take a loan against a property (LAP) jointly held by me and does she need to show the end use of the loan?—Vedant Jain
Yes, a LAP is possible in a jointly held property. However, please note that the loan availability will also be in the joint name. In the case of a LAP, the end use of funds is not verified by the bank.
l I checked my credit score six months ago and it is around 800. Now I want to take a home renovation loan. How can I negotiate with the bank for a lower interest rate?—Amit Kaushik
Yes, a borrower with a high score is usually well placed to negotiate for a better rate in future loans.
l I inherited a plot of land from my father. Now I want to construct a house which will cost around Rs 1.5 crore. How can I get a bank loan and what will be the terms of the loan?—Shiva Kumar
To get a loan to construct the house, first ensure that the land is in your name. If it is not, the inherited land has to be transferred to your name first. This can be done through legal assistance, as you will need a probate if your father left a Will or you need to procure an inheritance certificate. Once the commutation is complete, you may proceed to apply for the home loan.
l My daughter will do her MBA from the USA next year. Is it better to take a loan from a bank in the US or from India?—Padma
Looking at the expected trajectory of the interest rate in both countries, in the foreseeable future, it would be better to avail the loan in India.
l How can I open a loan overdraft account to pay my home loan and what are the benefits?—Manoj Sharma
A few banks such as State Bank of India, HSBC, and Standard Chartered Bank offer home loans as an overdraft. The advantage of such a loan is that in case you have some surplus money available which you deposit in the loan overdraft account, it can reduce your outstanding balance for the period the funds are available, and hence eventually works towards reducing the interest outflows. This kind of home loan is suitable for individuals having a healthy cash flow from multiple sources.