Your Queries — Loans: You can prepay home loan every year to reduce loan tenure

November 3, 2020 2:00 AM

Any additional repayment either in bulk or in parts will reduce your interest burden. However, check with your bank if it will accept multiple repayments in one financial year.

Sometimes the financer may call for a guarantor. The trucks you purchase will be hypothecated to the institution.

By CHAITALI DUTTA

I took a home loan of Rs 50 lakh last year for 20 years. Can I prepay two more EMI every year to reduce loan tenure?
—Atul Sinha
Yes. Any additional repayment either in bulk or in parts will reduce your interest burden. However, check with your bank if it will accept multiple repayments in one financial year. If it declines, accumulate the EMI amount in short term bank FDs and make one extra repayment in a year.

I want to start a transport business. My friend has assured me a loan from a local financier. Can I get a bank loan to buy two trucks? What documents will I need?
—Sridhar Ganesh
Talk to the financing company directly. Look for other options also. For the financing, you have to submit KYC docs, your income proof, expectation of income from the trucks. Sometimes the financer may call for a guarantor. The trucks you purchase will be hypothecated to the institution.

I cleared my auto loan 10 years ago and did not take the documents from the NBFC. Now I want to sell my car. The NBFC has shut down. What should I do?
—Sharad K
I am afraid there is no recourse to get the papers back if the NBFC itself is closed. Find out if the NBFC was taken over by another FI/NBFC. In that case you may have a chance to recover your details and get the required RTO forms signed.

How will I get the government’s ex-gratia interest amount for the six months of moratorium I had availed?
—Avinash Singh
The order has been structured in such a way that the money will be credited to your loan account automatically by November 5, 2020.

I did not opt for loan moratorium. Will I also get some money from the government and how will it be adjusted in my home loan account?
—A K Rawal
Yes, all loan accounts up to Rs 2 crore, be it home loan, education loan, auto loan, personal loans, MSME loans, will be eligible for compound rate interest waiver irrespective of whether opted for a moratorium or not. The actual interest applied would be simple interest in this six-month moratorium period. The difference in the interest would be credited to your loan account automatically. You will see your outstanding go down to that extent.

The writer is founder, AZUKE Personal Finance Advisory (www.azukefinance. com). Send your queries to fepersonalfinance@expressindia.com

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