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    Balance Transfer

It means transferring the existing loan from one bank to another bank . Most bank charges 2 to 3% as foreclosure penalty ,but still in many cases after paying this penalty its beneficial to transfer the loan. 

Common Reason for balance transfer are :

  • Better rate of Interest: This is the main reason for a borrower to opt for a balance transfer of its existing loan.
  • Top-up Loan: Second biggest reason for balance transfer is requirement of additional funds over and above the existing loan. This is common in cases where a top-up loan has been refused by the existing bank.

Product  features :

  • Max Top up -  60% of market value of property which includes existing loan amount.
  • Tenure – 1 to 15 years
  • Interest rate – As applicable . Interest rate keeps on changing .
  • Age limit - max 65 years for salaried or retirement age whichever is earlier and 70 years for self employed.
  • Loan foreclosure penalty - Means paying off the complete loan at one go. Most bank charges 2 to 3% of principal outstanding 
  • Income tax benefit - principal repayment upto 1 lac under section 80(c) and interest repayment upto 1.5 lacs under sec 24.
  • Co-applicant - Most of the banks ask for co-applicant .

Co-applicant in case of

  • Individual  - spouse,parents
  • Director  - spouse , parents , pvt ltd company , other directors .
  • Partner - spouse , parents , other partners .
  • Co-owners of property need to be co-applicants in loan . 

Loan process

3 documents are required for a loan to get disburse

  1. Sanction letter: - Loan sanctioning is based on the financial documents,personal documents and past credit history of the borrower.  Based  on the information provided banks calculates the loan eligibility and decides on the loan amount.

    Documents required for loan sanctionning are :- 

          Documents in case of salaried
          Documents in case of sole proprietor (proprietorship)
          Documents in case of partner (partnership)
          Documents in case of director (private limited company)

  2. Legal report: - In this complete chain of property documents , starting from allotment of the property till the last transaction , are required . Based on these documents  legal report is made.
  3. Technical report : - In this approved map by municipal authority is required .On map provided , physical verification of the property    happens .While verification certain things are checked like area of property , usage of property(Residential or commercial) .

If all the 3 documents are approved by the bank  , than disbursement documents are signed and cheaque is made in name of existing bank.This complete process takes 15 to 18 days , subject to complete documents are provided by borrower

      

 

 
     

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