HomeLoan:Newborrowers Ifyouhavebeenplanningtobuyahomefromquitesometimenow,thisisthemostappropriatetimetobuyone. Thoughtheinterestratesarerising,butrisemaybequitesteepinthenearfuture.Thus,allyounewhome aspirantsdon'twait.Incaseyouwanttooptforahomeloantobuyyourdreamhome,thebestthingtodonowis totaketheteaserloanbeingofferedbysomeofthebanks.TheteaserloansofferyoufixedEMIfortheinitial13to 36monthsdependingonbanktobank.Earliermanybankswereofferingteaserloans,butmostofthesebanks havediscontinuedthemrecently..Otherthanthat,bankshavenormalhomeloanproductsFloatinghomeloan interestrateandFixedhomeloaninterestrateproduct.Floatinghomeloaninterestrates,asthenamesuggests, keeponchangingastheinaccordancewiththechangeinbaseratesortheBPLR(whateverthecasemaybe).There aretwotypesoffixedhomeloaninterestrateproducts,fixedfortheentiretenureorfixedforacertainperiodof time.Incasetheinterestrateisfixedfortheentiretenureoftheloan,thentheEMIofyourhousingloanwillbe fixedfortheentiretenureoftheloan.Butincasetheinterestrateisfixedonlyforaspecifictenuresay5years, thismeans,thebankcanchangeitsinterestrateevery5years.

HomeLoan:Existingborrowers Ifyouareanexistinghomeloanborrowerwithagoodtrackrecord,youshouldthinkaboutshiftingtoateaser ratescheme.Thetimeandeffortyouwilldevoteonshiftingyourexistingloantothenewteaserhomeloanwillbe wortheveryeffort.AlongwiththatthefirstthingyoushoulddoistoshiftfromtheoldBPLRsystemtothenew baserateregime.Thisbaseratesystemisnotautomaticallyapplicabletotheexistingusersandforthisyouwill havetoapplytotheconcernedbank.Thebankswillchangethebaserateandthissystemofsettingupthebase rateismoretransparentthanthesystemoffixingupBPLR.Thusconsiderconvertingyourexistinghomeloantoa baseratesystemwhichwillbemuchmorebeneficialtoyouthentostayintheoldBPLRsystem. HomeLoanApplicationProcess Theprocessoftakingahomeloancanbedaunting,especiallyifyouhaveneverappliedforanyloanearlier.And ignoranceonyourpartcannotonlymakeitanunpleasantexperience,butalsoprovetobecostly.Hereisastep bystepguidetoequipyouwiththerightinfo,soyouknowwhattoexpect. Fromapplyingforahomeloantogettingitinvolvesvariousstages.Theseare: Step1:Applicationform Step2:PersonalDiscussion Step3:Bank'sFieldInvestigation Step4:Creditappraisalbythebankandloansanction Step5:OfferLetter Step6:Submissionoflegaldocuments&legalcheck Step7:Technical/Valuationcheck Step8:Valuation

 Step9:Registrationofpropertydocuments Step10:Signingofagreementsandsubmittingpostdatedcheques Step11:Disbursement 1.Applyingforaloan Fillinguptheapplicationformisthefirststep.Thelookofanapplicationformmaydifferfrombanktobank,but nearly80percentoftheinformationtheyneedissimilar.Mostofthisisbasicallyyourpersonalandprofessional information,detailsofyourfinancialassetsandliabilitiesandthedetailsoftheproperty(iffinalised)includingthe estimatedcostandthemeansoffinancingthesame. Documentstosubmit Whilesubmittingtheapplicationform,everybankasksforseveraldocuments.Andmostbanksthesedaysprovide doorstepservice,sothatyoudon'thavetospendtimevisitingtheirofficetosubmitthedocuments.However, somebanksstillinsistonthecustomervisitingtheirofficesatleastonce. Proofofincome:Thiswillneedtobebackedupbyproofsuchascopiesoflastthreeyears'IncomeTaxreturns (alongwithcopiesofComputationofIncome/Annualaccounts,ifany),Form16/Form16A,lastthreemonths' salaryslips,copiesofthelast6months'statementsofallyouractivebankaccountsinwhichyoursalary/business incomedetailsarereflected,etc.Otherdocumentsthatyouneedtoprovidewithyourapplicationforminclude ageproof,addressproofandidentificationproof.Youmayalsobeaskedtogiveyouremploymentdetails. Ageproof:Copyofyourschoolleavingcertificate/Drivinglicence/Passport/rationcard/PANcard/Election Commission'scard/etc. Addressproof:Similardocumentsneedtobeprovidedtoprovethatyouareactuallystayingatyourcurrent address. Identificationproof:Sameasabove,butwithphotograph.Sometimes,thesamedocumentifitcontainsa photograph,thecurrentresidentialaddressandthecorrectagecanbetheproofforall3things. Youremploymentdetails:Ifyourcompanyisnotwellknown,thenashortsummaryaboutthenatureofthe company,itsbusinesslines,itsmaincustomers,itscompetitors,numberofoffices,numberofemployees, turnover,profit,etcmaybeneeded.Usually,thecompanyprofilethatisavailableonthestandardwebsiteofthe companyisenough. Financialcheck Alltheincomerelateddocumentsyousubmitserveaspecificpurpose.Thelendinginstitutionusesthemtostudy yourfinancialstatus. Thebankstatementsyousubmitarescrutinisedfor: Levelofactivityinthecaseofselfemployedpersons,thisgivesaverygoodclueabouttheextentofbusiness activities. Averagebankbalanceacursoryglanceattheaveragebankbalancesmaintainedinasavingsbankaccountspeaks volumesaboutthespending/savinghabitsofanyindividual.

Chequereturnsasmallchargedebitedbyyourbankinthestatementindicatesthatachequeissuedbyyouwas returnedbyyourbank.Manysuchchequereturnscanhaveanegativeimpactonyourloansanction. Chequebouncesifchequesdepositedbyyouarereturnedbytheissuer'sbank,theywillbevisibleinyourbank statementandagain,bankshavespecificnormsastohowmanysuchreturnsareacceptableinaperiodofone year. Regularperiodicpaymentstheexistenceofperiodicpaymentstootherfinancecompanies/banksetc.indicatean existingliabilityandyouwillneedtoprovidefulldetailstothelender. Yourinvestmentsalsocomeunderthescanner.Thishelpsthebanktoestimateyourabilitytopaythedown paymentaswellasyoursavingshabit. ProcessingFee Alongwiththeapplicationformandthecreditdocuments,banksaskforaprocessingfee.Thisfeevariesfrom banktobank,butisusuallyaround0.25%to0.50%ofthetotalloanamount.Forinstance,ifyoutakealoanofRs 10lakh,youwillhavetopayaroundRs2,500toRs5,000asprocessingfee.Theagentdealingwithyouearnsa commissionfromthebank,whichtosomeextentisalsoaffectedbytheamountoffeespaidbyyou. Mostbankshaveflexiblefeestructures,anditisadvisablethatyounegotiatehardtofindoutthebank'sminimum possiblefeesthoughitisunlikelythatabankwillagreetoprovidealoanwithoutanyupfrontfeeatall.Some bankshavezeroupfrontfeeloans,butthatadvantagemaybenegatedastheirotherchargessuchas"legal charges"and"stampduty"arenormallyhigher. Thisfeeiscollectedtomaintainyourloanaccount,andincludesworklikesendingIncomeTaxcertificatesevery year,maintainingpostdatedcheques,etc. Quicktips Whenapplyingforaloan,itwillhelptokeepcopiesofyourincomeproofhandy. Forselfemployedpersons,iftheincomehasincreaseddramaticallyinthepastyear,haveyourexplanationready astowhyyouthinkthisisapermanentincreaseinyourincomeratherthanjustaonetimeaberrationwhichmight bereversedinlateryears.Ifthebankisconvincedwithyourexplanation,thentheloaneligibilitycanbe consideredinrelationtothelatestincomeratherthanconsideringthemuchloweraverageincome. 2.Personaldiscussion:Facetoface Afteryou\'veformallyandsuccessfullycompletedtheapplicationprocess,allyouhavetodoiswaittillthehome financeinstitutionevaluatesyourpapers.Thewaitnormallylastsonlyadayortwoorsometimesevenless. However,somebanksinsistonmeetingyouafterreceivingtheapplicationform,andbeforetheloansanction.This istogathermoredetailsaboutyouthatmaynotbementionedintheapplicationformandtoreassurethemof yourrepaymentcapacity. Again,thisstageisinsistedupononlyinveryfewcasesthesedays. Quicktips Whilegoingforthepersonaldiscussion,carryalltheoriginaldocumentspertainingtotheinformationprovidedon theapplicationformforthepersonaldiscussion. Avoidsubmittinganyfakedocumentsanddonotlieaboutthefinancialdetailsrequested;banksprocesshome loansonlyaftertheyareconvincedaboutyourcredentials.

3.FieldInvestigation:Checkingyouout Thousandsofpeopleapplyforloanseveryday.Andhowevereagerabankistocompleteitstargets,everyloanisa risk.So,itisonlynaturalthatitconfirmsorvalidatesthedetailsyouprovide.Thebankchecksallyourinformation includingyourexistingresidentialaddress,yourplaceofemployment,employercredentials(ifyouworkforasmall organisation),residenceandworktelephonenumbers.Representativesaresenttoyourworkplaceorresidenceto verifythedetails. Eventhereferencesyouhaveprovidedintheapplicationformarecheckedout.Whilethismaysoundirritating andaninvasionofyourprivacy,banksareforcedtoundertakevalidationintheabsenceofanycreditbureau.Once yourcredentialsarevalidated,ithelpsestablishtrustbetweenyouandthebank. Quicktips Theaddressandtelephonenumberverificationworkisusuallyoutsourcedtosmallfirmsandtheabilityofthe representativesisoftenuneven.Hence,interactionwiththemmaynotalwaysbesmooth.Whenthevalidation processstarts,expecttoreschedulesomeofyourotherworkforbeingavailabletofurnishdetailsrequired. 4.Creditappraisalandloansanction:Gettingthenod Thisisthemakeorbreakstage.Ifthebankisnotconvincedaboutyourcredentials,yourapplicationmayget rejected.Ifitissatisfied,itsanctionsyourloan. Thebankorthehomefinancierestablishesyourrepaymentcapacitybasedonyourincome,age,qualifications, experience,employer,natureofbusiness(ifselfemployed),etc,andbasedonthese,worksoutyourmaximum loaneligibility,andthefinalloanamountiscommunicatedtoyou.Thebankthenissuesasanctionletter.This lettermayeitherbeanunconditionalletter,ormayhavecertaintermsandconditionsmentioned,whichyouhave tofulfillbeforetheloandisbursal. Quicktips Finalloanamountandyourloaneligibilityaretwodifferentthings.Onceyouknowwhatyouareeligibletoget, youcandecideontheloanamount.Justbecauseyouareeligibleforahugesumdoesnotmeanyoushould borrowheavily. Thesanctionletterisanimportantpieceofdocumentandyoushouldkeepitsafely. 5.Offerletter:Ido... Oncetheloanissanctioned,thebankssendsyouanofferlettermentioningthefollowingdetails: Loanamount RateofInterest Whetherfixedorvariablerateofinterestlinkedtoareferencerate Tenureoftheloan Modeofrepayment Iftheloanisundersomespecialscheme,thenthedetailsofthescheme Generaltermsandconditionsoftheloan Specialconditions,ifany

Acceptancecopy

 Ifyouagreewithwhatismentionedintheofferletterfromthebank,youwillhavetosignaduplicateletterofthe sameforthebank'srecords.Earlier,banksusedtochargeadministrativefeesalongwiththeofferletter.However, withrisingcompetition,administrativefeeshavevirtuallydisappearedfromthehomeloanmarket. Quicktips Checkiftherateofinterestmentionedandtheloanamountontheletteristhesamethatwasdiscussedand agreedupon. Homeloanrateofinterestscanbenegotiated,usethefacttoyouradvantage. 6.Thelegalangle:Propertyandpapers Now,thefocusofthebank'sactivitiesshiftsfromyoutothepropertyyouintendtobuy.Onceyouselectyour property,youneedtohandovertheentiresetoforiginaldocumentspertainingtoyourpropertytothebankso thatitcankeepthemassecurityfortheloanamountgiventoyou.Thesenormallyinclude: Thetitledocumentsofyourseller,whichprovetheseller\'stitleincludingthechainoftitledocumentsifheisnot thefirstowner. NOCsfromthelegalownerssuchascooperativehousingsocieties,statutorydevelopmentauthorities,thelessor ofthelandinthecaseofleaseholdland,etc.NOCsarenotrequiredwherethepropertyissituatedonfreehold landandtheentirelandisbeingtransferredalongwiththestructure. Thesedocumentsremaininthebank'scustodyuntiltheloanisfullyrepaid. Legalcheck Everybankconductsalegalcheckonyourdocumentstovalidatetheirauthenticity.Eventhedraftsaledocuments thatyouwillbeenteringintowithyoursellerwillbescrutinised. Thedocumentsaresenttoalawyerintheirpanel(eitherinhouseoroutsourced)forathoroughscrutiny.The lawyer'sreporteithergivesagoaheadifdocumentsareclear,oritmayaskforafurthersetofdocuments.Inthe lattercase,youareexpectedtohandovertheadditionaldocumentstothebankforacleartitle. So,ifabankdecidestodisburseyourhousingloan,youhaveeveryrighttosmile,sinceyoucansafelyassumethat yourpropertydocumentsareclearandthetransactionissafe. Quicktips Sometimesthebankmayaskyoutopayforthelegalverification.However,mostbankscoverthecostsinthe upfront(processing)feethatyoupay. PropertydocumentationinIndiaisnonstandardandnontransparent.Hence,ithelpstobuypropertyfroma reputeddevelopersincetheyknowtheprocessinsideout,andkeepallthedocumentsready. Duetotheheavytransferchargesonsaleofpropertyand/orveryheavystampduties,somepeopleconductsale ofpropertybyshowing"lowerconsideration"thanagreedfor,withthebalancebeingpaideitheronanamenities agreementorincash.Alsotheconceptofsalebyexecuting"irrevocablepowerofattorney"hasgainedground especiallyintheNationalCapitalRegion.Allthiscouldrestrictthechoiceofyourlendersandmaytherefore increasethecostoftheloan,whichyoumightwanttokeepinmindwhilefinalisingsuchproperties. 7.Technical/Valuationcheck:Makingdoublysure Banksareextremelycarefulaboutthepropertytheyplantofinance.Theysendanexperttovisitthepremisesyou

intendtopurchase.Thisexpertcouldeitherbeabankemployeeorhecouldbelongtoafirmofarchitectsorcivil engineers. Sitevisit Thesitevisitstoyourpropertyareconductedtoverifythefollowing: Incaseofunderconstructionproperty Stageofconstructionisthesameasthatmentionedinthepaymentnoticegiventoyoubythebuilder. Qualityofconstruction Satisfactoryprogressofwork. Layoutofflatsandareaofpropertyiswithinpermissionsgrantedbythegoverningauthority. Thebuilderhastherequisitecertificatestostartconstructionatthesite. Valuationofthepropertyinrelationtootherdealsinthesurroundingareas.

Incaseofready/resaleconstruction External/internalmaintenanceoftheproperty. Theageofthebuilding. Willthebuildinglasttheloantenure?Thishasadirectbearingonyourloaneligibility,sincetheloan tenurewillberestrictedtothemaximumageofthepropertyasdecidedbythebank'sengineerandthis willimpactyourloaneligibility. Qualityofconstruction. Surroundingarea(development). Whetherthebuilderhasreceivedtherequisitecertificatesforhandingoverpossessionoftheflat. Thereisnoexistinglienormortgageontheproperty. Valuationofthepropertyinrelationtootherdealsinthesurroundingareas. Theseinspectionsarecarriedouttoprotectconsumerinterestsintermsofconstructionquality, adherencetolocallaws,approvedbuildingplans,etc.Atechnicalinspectionalsoletsthebankunderstand theprogressofconstructionsoastoreleasethestaggereddisbursements.

Quicktip Donotcircumventorskipthisstageandensurethatitiscompletedasearlyaspossible.Asabuyer,itgivesyou confidencethatyourpropertyhasbeeninspectedbyexpertsandthatyouarebuyinganassetthatislegallyclear andtechnicallysound.Thefeeforthisservice,likethelegalcheck,mayeitherbebuiltintoyourupfrontfeeorbe chargedseparatelybytheBank 8.Valuation:Realitycheck Sincehousingloansarecheaperthanotherloans,therehavebeencaseswhereindividualshaveshownpurchase ofpropertiesfromrelatedentitiesatinflatedpricestoobtaincheaploans. Sincetheriskassociatedwithdiversionoffundsishigherthaniftheloanwasusedforgenuinepurposes,banks carryoutanindependentvaluationtofindoutwhetherthetransactionisinlinewiththeexistingmarketpriceof thearea. Valuationhasbecomeakeyparameterindeterminingtheloanamountthatcanbesanctionedbythebank.The

valuationprocessisquitesubjectiveanddependsonthequalityandabilityofthepersonsentbythebankfor valuation. ValuationofrealestateasaprofessionisstillinitsinfancyinIndiaandisstillnonstandardised.Inmanycases,the valuerdeterminesthevalueofthepropertyatanamountthatislowerthanthedocumentedcostoftheproperty andthiswouldresultintheloanamountbeinglower,sincethebankfundsacertainpercentageofthecostor valuationoftheproperty,whicheverislower. Thispracticehasledtosevereconsumerissuesinanincreasingnumberofcases,asthevaluationisnormallydone onlyaftertheconsumertakesasanction(bypayingafee)andafteridentifyingandcommittingtobuythe property. Thevaluationissuerarelyariseswhenapropertyispurchasedthroughareputedbuilderdirectlyoriftheproperty ispreapproved.Inboththecases,thebankswouldhavealreadycompletedthevaluationandtherefore,youcan safelyassumethatthereisnodifferencebetweenthedocumentedcostofthepropertyandthebank'svaluation amount. Quicktip Somebankswillchargeaspecialfeetocoverthesecostsormayaskyoutopaythevaluerdirectly,thoughfor mostbanks,theupfrontfeecoversthesefeesaswell. Approachbankswhicharewillingtodothevaluationevenbeforethesanctionprocessandbeforeyoupayanyfee tothebank. 9.Registration:Sealingthedeal Afterthelegalandtechnical/valuationcheck,thedraftdocumentsasclearedbythelawyerneedtobefinalised andsignedandthestampingandregistrationofthedocumentsneedtobedone.Also,ifanyNOCsarepending, theseneedtobeobtainedintheformatapprovedbythebank'slawyer. 10.Signingthehomeloanagreement:Inblack&white Allborrowersneedtosignthehomeloanagreement.Youalsoneedtosubmitpostdatedchequesforthefirst36 months(ifthatistheagreedmodeofrepayment).Theoriginalpropertydocumentshavetobehandedovertothe bankatthisstage.Somebanksalsocreateadocumentrecordingthehandingoverofthepropertydocumentsto themassecurityfortheduerepaymentofthehomeloan. Thisdocumentisalsocalledamemorandumofentryandattractssignificantstampdutydependingontheamount oftheloaninsomestates.Thestampdutypayableonsuchamemorandumisnaturallyrecoveredfromyou. Notallbankscreatethismemorandumandhencethestampdutymayormaynotbepayable,dependingonthe practiceofthespecificbank.However,evenwherenosuchmemorandumofentryiscreated,thestate governmentconcernedmay,inthefuture,demandastampdutyontheloantransaction,whichnaturallyis recoverablefromyouasperthehomeloanagreementsignedbyyou. 11.Disbursement:Thebigpayout Afterthebankhasensuredthatthepropertyislegallyandtechnicallyclear,alltheoriginaldocumentspertaining totransferofownershipofpropertyinyourfavourhavebeensubmittedandallthenecessaryloanagreements havebeenexecuted,finally,itispaymenttime!Youwillnowactuallyreceivethechequeinyourhand.Timeto celebrate!Butholdonasecond.Beforethebigmomentarrives,youneedtosubmitdocumentstoprovethatyou havepaidyourpersonalcontributiontowardstheproperty,sincebanksnormallyfinanceonlyupto8590percent ofthetotalcostofthehouse.

 Incaseyouareexpectingmoneyfromothersourcestofundyourowncontribution,youneedtoprovidesufficient evidenceforthesame.Itisonlyaftersubmittingthisproofthatthebankwillreleasepartdisbursementofthe loan. Thechequewillbeinthenameofthereseller(forresaleflats),builder,societyorthedevelopmentauthority.Itis onlyinexceptionalcircumstances,thatis,ifyouprovidedocumentstosupportthatyouhavemadeanexcess paymentfromyourownaccountthatthechequewillbehandedovertoyoudirectlybythebank. Quicktips Allbankschargeinterestontheloanamountfromthedayonwhichthechequehasbeenmadeandnotfromthe dayonwhichthechequeishandedovertoyou/seller.So,takedeliveryofthechequethesamedayorthevery nextdaytoavoidpayingextrainterestonmoney. Disbursementinstages Usually,loansaredisbursedonthebasisofthestageofconstructionoftheproperty.So,incaseofresaleorready possessionproperties,thedisbursementisfullandfinal.However,incaseofunderconstructionproperties,the paymentismadeinparts,alsoknownaspartdisbursement. Eachoptionwouldhavedifferentdisbursementprocesses. Partdisbursement:Whenaloanispartlydisbursed,thebankdoesnotstartEMIsimmediately,sinceitis calculatedonthetotalloanamountataparticularrateofinterestandforagiventenure.Moreover,itnormally doesnotstartbreakinguptheinstallmentsintoitsprincipalandinterestcomponentsuntiltheentireloanamount isdisbursed. Toovercomethisdifficulty,bankschargesimpleinterestonthepartlydisbursedloanamount.Forinstance,ifyou haveasanctionedloanofRs10lakh,butthepropertyisunderconstructionandthebankhasdisbursedonlyRs4 lakh,youwillbechargedasimpleinterestonlyonthedisbursedamount.Thisprocesscontinuesuntilthefinal disbursementtakesplace.ThesimpleinterestpaidiscalledPreEMIinterestorPreEMI. Atthisstage,banksmaytakeonlyaroundthreetosixpostdatedchequesonaccountofPreEMI. Quicktips Alwaysensurethattheamountofsimpleinterestisavailableinyourbankaccounttoavoiddishonourof thecheque. ThesystemsofmostbanksdonottrackPreEMIpaymentsaseffectivelyasEMIpayments.However,as pertheloanagreement,yourliabilitytopayPreEMIisabsoluteandwithoutreceivinganyreminderfrom thebank.YoumayhavetopayadelayedpaymentchargeifyourPreEMIisdelayed.So,itisinyourown interesttokeeptrackofthenumberofPDCsgiventothebankforPreEMIandreplenishthem,should theneedarise. Submitthedemandletterfromthebuilderasandwhenraised,toensurethatthebalancedisbursement cantakeplace. Collectthereceiptfromthebuilderforthepartdisbursementandhanditovertothebank. Ensurealltheabovearecompliedwithtillthefinaldisbursementoftheloan.

Fullandfinaldisbursement:Ifitisareadypossessionproperty,thebankdisbursestheentireloanamountin favourofeithertheresellerorthebuilder.

 Quicktips Taketimetofillintheloandocumentsbeforeyousignthem.Somecolumnsmayhavetobekeptblankasthe exactamountsmaynotbeknown,butthisshouldbelimited. Thebankissupposedtoreturnacopyoftheloandocumentssignedbyitsauthorisedsignatorybutthatrarely happensinpracticewithoutsustainedfollowup. Keepphotocopiesofalldocuments/agreements/letterssubmittedtothebanktoavoidanymisunderstandings later. Therelationshipcontinues... Thefinaldisbursementdoesnotendyourrelationshipwiththebank.Infact,itisjustthebeginning.Andthereare variousissues/situationsthatariseinbetweenthebeginningoftherelationshipanditsend. Theseinclude: Postdisbursementdocuments Repayment Incometaxcertificate Prepayment Loanpreclosure/satisfaction Postdisbursementdocuments

Paymentreceipt:Oncethebankhandsoverthepayordertoyou,youinturnareexpectedtohanditovertothe resellerorthebuilder.Youshouldgetareceiptfromthemforthepaymentandhanditbacktothebank,asitwill becomepartofyourmortgagedocumentation. Sharecertificates:Incaseyourpropertyispartofasociety,youwillneedtogettheflattransferredtoyourname byaskingthesocietytoissuethesharecertificateinyournameandrecordingthetransferofownershipintheir books. ThisnormallyhappensatthefirstAGM/EGMafterthesaletransaction.Thistransferredsharecertificatealso happenstobeapartofthemortgagedocumentationandhas,therefore,tobehandedovertothebankafterthe transfertakesplace. Repayment Theloanisgenerallyrepaidbyequatedmonthlyinstallments,usingpostdatedcheques.Banksusuallyaskfor12, 24or36PDCs,afterwhichyouneedtorepeattheprocessuntilyouhaverepaidtheloan.Somebanksmayalso insistonachequeforanamountequivalenttotheloanoutstandingattheendofPDCperiodtoensuretimely replenishmentofPDCsforthenext12,24or36monthsasthecasemaybe. Incaseyourinstallmentsaretobedeductedagainstyoursalary,youneedaletterfromyouremployeraccepting thisarrangementanddirectlyremittingtheamounttothebankeverymonth.Thisispossibleonlyifyour organisationhasanarrangementwiththebankforallemployees. Somebanksallowyoutogivestandinginstructionstothebankwhereyouhaveyoursavings/currentaccountto deductmoneyeachmonthcreditingyourhomeloanaccount. SomebanksallowthemonthlyinstallmentstobepaidbyconvenientECSfacility.

Anotherpossiblemodeofpaymentisbycashordemanddraft(notallbanksofferthis).YoucandeposittheEMI everymonthatthebank'soffice. IncomeTaxcertificate Everybankissuesanincometaxcertificatethatservesasrequisiteprooftoletyouavailoftaxbenefitsthataccrue onrepaymentofahomeloan.Thiswilltypicallycontainthetotalamountofinterestandcapitalrepaidduringthe year. Thisismandatorytoclaimthetaxbenefitinrespectofselfoccupiedproperty.Youwillhavetofilethiswithyour taxreturnsandsubmitthistoyouremployerorcharteredaccountanttocalculateyourtaxliability. Prepayment Youcanprepayaloaneitherinpartorinfullatanygivenpointoftime.Youcanalsoprepayitevenwhenitisonly partlydisbursed.However,mostbankshaveanupperlimitonthenumberoftimesapersoncanprepayhisloanin ayearaswellasontheminimumamountyoucanprepayeachtime. Untilrecently,bankschargedapenaltyforpartorfullprepayment.Butincreasedcompetitionhasforcedmost bankstoallowpartialprepaymentatnilcharge. Mostbankslevyaprepaymentchargeifyoumakefullrepaymentandaskforreleaseofyourpropertydocuments. Loanpreclosure/satisfaction Youalsohavetheoptionofcompletelyrepayingtheloanatanytime.Ofcourse,eachbankhasitsconditionsfor preclosure.Also,theloanwillgetcompletelypaidoffontheexpiryofthetenureoftheloanifyouhavepaidall yourinstallmentsontime. Onceyouhavecompletelyrepaidyourloan,ensurethattheentiresetoforiginalpropertydocumentsishanded backtoyou.YoushouldalsoaskthebankforaNoObjectionCertificatesayingtheaccounthasbeencleared.Asan option,thebankmayissueaconsentletterstatingthatthepropertyisnowfreefrommortgage. Ifyouhaveguarantors,thebankwillissueaseparateletterforeachoftheguarantorsstatingthattheirliabilityhas cometoanend.Onlyafteryoureceivethesedocumentscanyousaythatthepropertyisnowcompletelyfreeof mortgage. Atthisstage,insomecases,youmaydiscoverthattheoriginaldocumentshaveyetnotbeenreceivedbythebank fromtheregistrar.Insuchcases,youwillneedtofollowupwiththeregistrarandgetthedocumentsfromthem directlybyshowingthemacopyofthebank'sclearancecertificate. Sometimes,(andwemuststressonlysometimes)thebankmaymisplaceyouroriginalpropertydocumentsleading toavoidablestress.Infact,thebankmayclaimthatthesedocumentswerenevergiventothematall.Hencethe importanceofinsistingonaproperreceiptoftitledocumentswhilehandingthemovertothebank. Rememberthatreceiptwillcomeinveryusefulwhentheloanisfullypaidoff.Also,itisextremelyusefulwhen youwanttoshiftyourloantoanewlender.