Fixed rate home loans, like the name suggests, have a fixed rate of interest throughout their tenure, whereas for floating rate home loans, the interest rates are subject to changes in key RBI policy rates. Depending on the prevailing RBI rates, one’s EMIs might increase or decrease.

Yes, one can prepay their outstanding loan amount prior to the completion of the tenure. In case of floating rate loans, there will not be any additional charges. However, for fixed rate home loans, prepaying through refinance might get penalised by up to 2%.

According to the Section 80C of the Income Tax Act, one can avail a deduction of up to 1.50 L on a home loan principal amount, repaid annually. As per Section 24 of the IT Act, tax payers are eligible for benefits of up to 2 L on the interest amount repaid annually.

A Co-Applicant could either be the Applicant’s immediate family member, like spouse, children (of major age), or parents. Co-owners of a property are mandatory Co-Applicants by default. However, Co-Applicants do not necessarily need to be co-owners.

The pre-EMI is payable by the payee to the loan provider before the completion of the entire loan disbursement. Post disbursement, the regular EMI’s are applicable, comprising the principal and interest amount.

The different types of home loans that one could avail are:

• a. Home Purchase Loan: Best suited for people looking to purchase a new ready-to-move house/ flat or under construction property.
• b. Home Construction Loan: Best suited for people trying to construct a new home/ flat.
• c. Home Conversion Loan: Best suited for those looking to move to purchase a new property while already having bought a previous house with loan.
• d. Plot Loan: Best for people trying to purchase a residential plot for home construction or living unit, if they are eligible.
• e. Home Improvement Loan: Best for those looking to repair or renovate an already existing property.
• f. Home Extension Loan: Best for people trying to expand / extend an already existing property.
• g. Home Loan Balance Transfer: It can be availed by those who want to get their existing loan balance transferred from an existing lender to a new one, due to reduced interest any other reason.
• h. Home Loans for NRIs: These are home loans that cater to NRIs residing in the country, including PIOs and OCIs.

MCLR stabs for Marginal Cost of funds based Lending Rate. It is the benchmark rate set by a financial institution, below which it cannot lend money to its customers.

Yes, one can switch from fixed rate to floating rate during their home loan tenure, and might be subject to a conversion fee by the lender.

The loan repayment tenure begins only after the loan amount has been disbursed by the lender in its entirety. However, the pre-EMI payment needs to be made monthly on the partially disbursed loan amount.

Depending on whether one’s lender deems them eligible enough to repay two loan EMIs at the same time, they could avail two home loans at the same time. However, the tax benefits on the second loan might be different and the loan seeker might need to establish the second property as self- occupied or let-out.

No, home loans do not cover 100% of the property value. Lenders usually determine a margin on their loan. For example: if a lender has set a loan margin at 10%, this means the bank/ financial institution will be covering 90% of the cost whereas the 10% has to be a down payment by the loan seeker, to cover the entire property cost.

When lenders/ financial institutions scrutinize one’s application, they ensure the applicants’ capacity to repay the monthly EMIs is not affected by any other on-going home, personal or vehicle loan. In case an applicant is already repaying EMIs on prior existing loans that comprise more than 50%-60% of their income, their application is likely to be rejected.

Usually, the amount one can avail through a personal loan is not as high as that of a home loan. For non-specific financial needs, personal loans are better. However, for specific home or property needs, home loan is the best bet. One could also get top-up loans o their home loan to cover any extra costs, such as furniture, etc.

No, only one loan can be availed on one particular property and any exception to that is considered fraudulent and punishable. The Central Registry of Securitisation Asset Reconstruction and Security Interest of India or CERSAI is a body which ensures such activities are prevented.

A joint home loan has an Applicant and a Co-Applicant. A Co-Applicant can be one’s spouse, immediate family (like parents or major children). It is beneficial to have a Co-Applicant since it increases eligibility by taking into consideration the Co-Applicant’s income for loan repayment purposes. A property Co-Owner is a Co-Applicant by default. However, it is not a mandate for a Co-Applicant to always be a property Co-Owner.