By Chaitali Dutta

* For an education loan, what is the period of repayment? If the amount is paid within the first three years, will the bank put any pre-payment penalty?

—K R Chandramohan

Usually, education loan tenures are in the range of 5-8 years, depending on the type of course/degree the student is going for. There are no pre-payment charges in case you want to pay off the education loan at one-go.

* I had taken a home loan and repaid the entire amount a year ago. I had taken a top-up loan linked to the home loan two years ago. I intend to prepay the entire amount soon. Will the bank charge me a penalty and what are the documents that I should take from the bank to close the account finally?

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—Arnav Paul

The home loan and top-up loans are handled the same way by the bank. Hence there will be no penalty for prepayment of the top-up loan provided it is a floating rate loan and there is no clause restricting pre-payment in your sanction letter. Once you repay the loan, collect all the original papers including the sale agreement, builder receipts, original insurance policy (life cover, natural disasters- as applicable), no dues certificate, and the final interest paid certificate for the relevant FY.

* I am planning to buy a second hand car from an aggregator. Can I get a bank loan to purchase the car and will the interest rate be higher than that for a new car loan?

—Rohit Kumar

Bank loans are available for used cars. The tenure of the loan does not usually exceed seven years. This period may be reduced by looking at the age of the pre-owned car. Yes, usually the interest rate applicable for a loan for a pre-owned car would be greater than that for a new car.

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* Is it possible to get a gold loan after pledging my wife’s ornaments and what are the documents that I have to sign?

—Gaurav Awasti

Gold loans are possible and the loan is granted to the person owning the gold. The loan amount will be lower than the valuation of the gold at the time of taking the loan. This is to cover the interest cost of the loan. The sanction letter will have the interest rate and other details of the agreement. You need to pay the loan back by way of EMI. In case, the loan is not repaid back and there are some outstanding liabilities, then the loan provider has the right to sell the gold to recover the overdue amount.

The writer is personal finance wellness expert and founder of AZUKE Finance. Send your

queries to fepersonalfinance@expressindia.com