Yes Bank Loan Against Property - Frequently Asked Questions

Q. For what purpose are Loans Against Property used?
A. There are a variety of home loans on offer: a) Home Purchase Loan b) Home Improvement Loan: for renovation and repair of your home c) Home Loan Top-up: additional funding at Home Loan rates along with existing Home Loans on the same property d) Home Loan Transfer: balance transfer of home loans from other banks and Housing Finance Companies e) Home Loans for Self Employed: tailor made home loans for self employed professionals or non-professionals
Q. What is EMI?
A. EMI (Equated Monthly Instalment) is the amount payable to the Bank till the loan is paid back in full. The Emi consists of Interest as well as Principal component.
Q. Who can be co-applicant to the loan?
A. You can include your spouse as a co-applicant for the Loan. His / her income can be added to enhance the loan amount. However all co-owners of the property should necessarily be the co-applicant.
Q. What is a floating Home Loan?
A. You can include your spouse as a co-applicant for the Loan. His / her income can be added to enhance the loan amount. However all co-owners of the property should necessarily be the co-applicant.
Q. What is pre-EMI interest?
A. Prior to full and final disbursement and commencement of EMI, you pay Pre-EMI interest on the portion of the loan disbursed to you. Pre-EMI interest is payable every month from the date of each disbursement up to the date of commencement of the EMI.
Q. What are the tax benefits of home loans?
A. The property to be purchased becomes the security and the same is mortgaged to the Bank / Home Finance Company till the loan(s) is/are repaid. Both principal as well as interest of home loans attract tax benefits. With effect from 1st April 2005 (i.e. assessment year 2006-07) under section 24(b) and 80C of the Income Tax Act 1961. As per Income Tax Act 1961 rules, the current applicable exemption under section 24(b) is INR 1,50,000/- for the interest amount paid in the financial year and up to INR 1,00,000/- (under section 80C) for the principal amount repaid in the same year. The same is subject to changes in the Income tax Act from time to time.

 
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