Most banks allow you to repay both part and full prepayment of a home loan. You are also allowed to pay a certain portion of the outstanding balance and go with the same EMI afterward. However, many banks charge early repayment penalties up to 2-3% of the principal amount outstanding. Prepayment penalty may vary according…
It is not mandated by any authority like RBI or IRDA to buy a life insurance policy from a bank in order to get a loan. However, if you buy a life insurance policy equivalent to the loan amount it is beneficial to family members in case of your unfortunate death. The loan amount will…
Switch over or Balance transfer of Home Loan means you can switch the loan amount from one bank to another. If you are facing the problem of the high rate of interest charged on your existing home loan, whereas other banks are charging a lower rate of interest, you may prefer to close your account…
In terms of the recently amended Factoring Regulation Act, 2011which widens the scope of companies that can undertake factoring business, permits Trade Receivables Discounting System (TReDS) to file the particulars of assignment of receivables transactions with the Central Registry on behalf of the Factors for operational efficiency. The Act empowers the Reserve Bank of India…
There are 18 types of charges you may have to pay on home loans. Do keep in mind all of these charges may not apply to every borrower; so before applying for a home loan know what are the fees you may have to pay on home loans. Also, these charges will vary across lenders…
The word ‘Margin’ has multiple meanings. In trading percentage of profit is known as margin. The amount we have deposited with the equity brokers is also called margin. When you approach a bank or NBFC for loans like home loans, education loans, personal loans, etc., they do not finance 100% of the value of the…
A home loan interest rate reset clause allows the lender to review the interest rate after a certain period, as per the occurrence of a scheduled reset date of the loan. A reset rate is the new interest rate that a borrower must pay effective from the scheduled reset date. The lender will provide details…
In banks, the markup is the value added to the cost of funds used for lending as Spread or mark-up broadly: profit. Banks are free to decide the mark-up or spread over the cost of funds. As per RBI guidelines, banks shall adopt the following broad components of spread: (i) Business strategy: The component shall…
EMI stands for Equated Monthly Installment for the loan you avail of from your bank or other lenders. Each installment of the loan repaid under EMI consists of the principal portion of the loan amount and the interest paid on the loan based on the tenure of the loan, and rate of interest. The principal…
In the past, it was a prevalent practice in certain Indian States wherein a deed of power of attorney, coupled with the sale agreement, was treated as concluding or confirming the sale. No sale deeds were registered for conveying the properties. However, in 2011, the Supreme Court, in the case of Suraj Lamp & Industries…