By Chaitali Dutta
What is the maximum period of education loan and does the repayment start immediately? —Manjot Singh
A typical loan tenure for an education loan is seven years. The repayment by way of EMIs starts after the course has ended. In the interim, interest is applied as simple interest on the loan outstanding. You may look at paying part of the interest during the course period.
My home loan is under the MCLR system and the transmission is very slow. Is it beneficial to shift to repo rate-linked loan and how can I do it? —Vinod Gupta
Yes, it would be beneficial to shift to a new loan that is repo rate-linked. Ask your existing bank or financial institution to give you a quotation for the new loan. You may also approach another provider and take their offer. That way, you will be able to go with the better option available.
My wife and I together earn around `2.5 crore. We are around 45 years old with no outstanding loan. We have inherited around 10 acres of agricultural loan on which we plan to start a poultry business. Can I get a loan of `15 crore for a period of 15 years? —Siddharth Khemu
In any business loan, the project report which has the details of future expected cash flows and profitability as well as the market opportunity, has to be compiled. The repayment needs to be done from the cash generated from your business, not from your salary income. Additionally, starting a business is not advisable while you are in a job, so maybe one of you needs to quit your current work to look after the business full time. It is suggested that, as the first step, a valuation of the inherited land is done by a government-authorised valuer. The second step would be to put a professional on the job to prepare a business proposal.
I had taken a car loan last year. I have received some money from the maturity of investments. Can I prepay the loan without any penalty? —Arvind
Yes, under a regular situation, after one year, you may pay an additional part payment or close the account fully, if you have funds available. However, there are some banks or financial institutions that may run a special offer where the prepayment clause would be different. Check your sanction letter to find out the exact clause in your particular loan.
The writer is founder, AZUKE Personal Finance Advisory (www.azukefinance.com). Send your queries to fepersonalfinance@expressindia.com