By Chaitali Dutta
I took a joint home loan of Rs. 60 lakh for 15 years. I reduced it to Rs. 45 lakh in the last two years. I am paying EMI of Rs. 60,000. Can I request the bank to reduce the EMI or loan tenure? —N Sundararajan
If in two years your loan amount is reduced from Rs. 60 lakh to Rs. 45 lakh, you must have done additional payments. In such a situation you may either reduce current EMI and keep tenure as 15 years or keep the EMI the same and reduce the tenure significantly. If your monthly cash flow is tight, and you are unable to save for future goals, go for EMI reduction. However, if you have a comfortable cash-flow, then reducing the tenure is better, as you will get loan free earlier.
How is balance transfer of housing loan done? —Atul Dua
Get an in-principal approval from Bank 2. You need to inform Bank 1 that you are going for a balance transfer on a home loan with another bank. The Bank 1 gives you a list of documents they are holding which you pass onto Bank 2. Once the Bank 2 completes the paperwork with you, you fix a date on which the balance transfer will take place. Bank 1 tells you the exact amount of required. Bank 2 issues that cheque by debiting your new loan account. Bank 1 loan amount is extinguished. The mortgage papers are released by Bank 1 to Bank 2. And Bank 2 creates its own mortgage on that property. You start paying the EMI to Bank 2.
For the past two years, I do not earn any regular salary but get lumpsum payments for doing work. Can I apply for a car loan? —Ashish Mehta
It may be difficult for you to pay the EMI regularly with an uncertain income. There may be some financial institutions who would consider providing you with a car loan. Unless the car is critical for you in your job, I would suggest you do not get into a loan situation. Rather save small amounts at each lumpsum receipts, build a corpus and buy a loan-free car.
My sister wants to take a study loan. Can I take the loan on her behalf? —Preeti Jha
It would be possible only if none of your parents is available or they have no income. In that case, the loan will be granted to your sister, for an eligible course, jointly with you. Here it is worth mentioning that unless you are a legal guardian to your sister, you will not get the benefit of interest paid under section 80E.
(The writer is founder, AZUKE Personal Finance Advisory (www.azukefinance.com). Send your queries to fepersonalfinance@expressindia.com)
