l Is it beneficial to opt for a home loan overdraft account?—Lalbabu Nishad
The home loan is sanctioned as an overdraft (OD) facility. With each passing month, the overdraft limit is reduced to the extent of the principal repayment in a regular home loan (which is essentially a term loan). The home loan as an overdraft facility works best for families that may have surplus funds for some time. For example, the salary may be parked in the overdraft account as soon as it comes in.
You can make your bill payments and expenses from the overdraft account itself. By the end of the month, the interest payable on the overdraft facility loan is lower than the regular home loan interest, as the extra funds sitting in the account reduce the outstanding for those days, which results in lower interest for the month. Do note that the EMI has to be paid regularly in these OD facility home loans as well.
l What valuation does a bank consider for a loan against securities? Can I sell the mortgaged securities later to repay the loan?—Rachit Goel
For loan against financial securities, the valuation is considered as on the day of sanction. For debt instruments the margin is lower while for equity based instruments, the margin is higher, considering the volatile nature of the valuations.
l For a gold loan, can I repay the principal and the interest as EMIs?—Gunjeet Jaju
Both options are available for a gold loan: either repay as EMI or as a lumpsum in the end.
l I am a salaried employee. Can I take a business loan of around Rs 1 crore and what are the documents required?—Ram Prakash
More than the documents, for a business loan, the business proposal has to be prepared with the three-year expected business growth scenario. The lender may require collateral to sanction the loan.
l Do I have to pay extra interest to convert the outstanding credit card dues into EMI for one year?—Rohan Chaudhary
No, there is no extra cost for the conversion.
l My NRI son wants to invest in a property in India. Will he be eligible to take a loan from an Indian bank and can I be a co-borrower?—Deepak Ghangas
NRIs can avail a loan in India to purchase property here. As for the joint holder, the name has to appear in the purchase documents as the joint holder in the property as well.
The writer is founder, AZUKE Personal Finance Advisory (www.azukefinance.com). Send your queries to fepersonalfinance@expressindia.com
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Investors should assess their financial goals, risk appetite and consult a qualified financial advisor before making investment decisions.
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