Q1 For what purpose can you avail of Loan against Property?
You can avail of Loan against Property against Residential & Commercial Property for either your personal or business activities other than speculative or non prohibitive activities.
Q2 How will IDBI decide the loan amount I am eligible for?
IDBI Bank will decide the loan amount based on your repayment capacity. Repayment capacity takes into consideration factors such as income, age, qualifications, number of dependants, spouse’s income, assets, liabilities, stability and continuity of occupation and savings history. However the eligibility of loan shall not exceed 85 per cent of the cost of property.
Q3 Who can be co-applicant to the loan?
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.
Q4 What are the fees you will be charged?
A Processing fee of up to 1.00 % of the loan amount applied.
Q5 How will the rate of interest calculated?
Interest is calculated on daily reducing balance. Your monthly out-go (equated monthly installment - EMI) is much lower as compared to the interest on annual reducing balance.
Q6 What is the tenure of the loan?
You can repay the loan over a maximum period of 15 years. Repayment will not ordinarily be extended beyond the age of retirement (if you are employed) or on your reaching 60 years of the age, whichever is earlier. However, IDBI Bank will be endeavoring to determine the repayment period to suit your convenience.
Q7 How do I repay the loan?
You repay the loan in Equated Monthly Installments (EMIs) comprising principal and interest. Repayment by way of EMI commences from the month following the month in which you take full disbursement.
Q8 What is Pre-EMI interest?
Pending final disbursement, you pay interest on the portion of the loan disbursed. This interest is called pre-EMI interest. Pre-EMI interest is payable every month from the date of each disbursement up to the date of commencement of EMI.
Q9 What security will I have to provide?
The security for the loan will be the first mortgage of the property(Equitable mortgage by Memorandum of Entry) to be financed, normally by way of deposit of title deeds and/or such other collateral security, as may be necessary.
Collateral security for by way of assignment of insurance policy or any such other assignable financial instruments are also required, as security to loan if deem necessary by the Bank.
Please do ensure that the title to the property is clear, marketable and free from encumbrance. To elaborate, there should not be any existing mortgage, loan or litigation which is likely to affect the title to the property adversely.
Q10 Can I repay the loan ahead of schedule?
Yes. You can repay the loan ahead of schedule. No Prepayment / Foreclosure charges after expiry of 6 months of final disbursement, if the borrower pays from his own source of funds.
Q11 Does the property have to be insured?
You will have to ensure that the property is duly and properly insured for fire and other appropriate hazards, as required by IDBI Bank, during the tenor of the loan and to produce evidence thereof to the Bank each year and/or whenever called upon to do so.
Q12 Are the Bank policies subject to change?
Yes. These policies will be reviewed periodically.
Q13 How is my loan reassessed if there is a change in status from Non-Resident Indian to Resident Indian?
The repayment capacity of the applicant(s) based on Resident status is reassessed and a revised repayment schedule worked out. The new rate of interest will be as per the currently applicable rate of Resident Indian loans (for that specific loan product). This revised rate of interest would be applicable on the outstanding balance being converted. A letter is given to the customer confirming the change of status.