Which is the best way to repay the housing loan faster?

Pre-Payment is not the only way to close your loan faster. To close the loans faster we can follow the 3 different methods.

I will be giving you a detail advantage of each of the method.

  1. Increase your EMI
  2. Make a part-payments
  3. Loan as OD account product
  4. Monitor you loans and correct to lower rates when ever possible.

Let me explain in detail of each of the method

  1. Increase Your EMI :

This option to be used when you have more monthly savings and want to be debt free faster. Very important here is more monthly savings. Keep the sufficient buffer from your salary for living expenses and additional 10% as the buffer so that you don’t by increasing the EMI later day you don’t have tough time.

Increasing the EMI is much better option if you have steady flow of income and if you are planning to save some money and make a part-payment, then mathematically its better to increase the EMI. For example if you have to increase your EMI by Rs 5000 or saving Rs 5000 every month and after 12 months you make a saving of Rs 60,000/- and make a part-payment. Option 1 is better as it would contribute towards principle every month compare to after 1-year. You might be saving at-least extra Rs 2000 more.

One important thing to note is , most of the banks allow you to increase your EMI but very few allow you to decrease the EMI amount. So think before you do.

2. Make a Part-Payment :

This option to used when you have a lump sum amount received in the form on Bonus or when you have sold something and received the amount. Its said to keep things simple and stupid always clear your loans when ever you get a lump sum amounts.

One important thing to note is , each bank follows specific rule while receiving the part-payment. In case if you are walking to the branch mostly minimum part-payment should be 1 month EMI. If you are planning to pay via online it might be minimum 3-months EMI. Note each bank has its own policy, so please check.

3. Loan as OD account product

This option can be used if you have availed a special loan product which provides OD facility. Let me explain what is OD Facility for the Loan. If you have availed a 50 Lac loan and say you have got 10 lac as bonus. Now if you transfer the 10 Lac to your Loan OD Account then Interest would be charged for only 40 Lac amount. Now after a 1-year, if you like to withdraw the 10 lac, then you can withdraw the amount as its parked. Then from that day what ever is the principle left, bank will be charging interest on the pending amount. What ever interest you have earned on 10 lac will be adjusted toward the principle. This allows to close the loan faster.

All banks don’t provide this products. Banks like Bank of Baroda, SBI , Standard Charted & IDBI have this option. These days banks are charging 0.10% to 0.20% more for this product. So avail them only if you are receiving a lump sum amount and want to use it later day or else make a part-payments to close the loan faster

4. Monitor you loans and correct to lower rates when ever possible.

This option is least used but most powerful one with very little payment. When ever rates fluctuate one need to compare how his/her interest rate compare to ongoing market rate. In case if you are paying higher rate then ongoing we need to check are you going to really pay higher next change or not before correcting.

Interest rate has two components,

Interest Rate = MCLR(Base Rate) + Margins

When you avail your loan in variable rate, the margin gets fixed. So say you availed a loan at 8.50% where in MCLR is 8.00% and Margin is 0.50%

Interest rate = 8.50% = 8.00% + 0.50%

Next change if MCLR(Base rate) changes to 9.00% then your rate would be 9.50%

if it become if MCLR(Base rate) changes to 7.00% then your rate would be 7.50%

Now suppose, if you are paying 9.50% at a given time and in the market if the new customer is getting at 9.25% then we have to check why is he paying 9.25%

There can be 2 cases .

  1. He is paying lower margin then you. Say MCLR(Base Rate) is at 9.00% and his Margins are only 0.25% then its a time to correct your margins from 0.50% to 0.25%
  2. He is paying higher margin then you. Yes its possible if the MCLR(Base Rate ) is at 8.50% and Margins are at 0.75% then he would still pay 9.25% 0.25% less than you for 1-year. But later after 1-year if the MCLR(Base Rate) changes to 10% then you would be paying 10.50% where as this person is going to pay 10.75%.

Note : Lower doesn’t mean lower always. It can be only for a short time. Loans are normally tend to be longer specifically Home Loans. So Manage them well. We help you managing all this to close your loans faster for more help check Manager my Loan

We are specialised in this process. Avail all services at free of cost.

Budget Highlights 2018-19 On Tax: Direct Taxes & Indirect Taxes

High anticipation on budget on Feb-1st

We have complied budget Highlights of 2018-2019.

Personal Taxation : Budget Highlights – DIRECT TAXES



Tax Rates

No Change in income tax slab or tax rates or surcharge

Education cess substituted with Health and Education cess of 4%

Standard Deduction

Standard deduction of INR 40,000 or amount of salary received whichever is less.

However transport allowance for INR 19200 and medical reimbursement for INR 15,000 was previously available and post this proposal , a bundled exemption of INR 40,000 is available i.e. only an increase of INR 5800.

Transport allowance exemption is available only for differently abled person.

Capital Gains

Provisions of section 54EC – The lock-in period for investment of specified bonds under 54EC is increased to 5 years from 3 years. This is pertaining to capital gains arising from long term capital assets, being land or building or both. This amendment is effective April 1, 2018

Senior Citizen Deductions – health insurance premium and medical treatment

Section 80D provides a deduction in respect of payments towards annual premium on health insurance policy or preventive health check-up of a senior citizen or medical expenditure in respect of very senior citizen. This has been proposed to increase from INR 30,000 to INR 50,000.

Section 80DDB provides deduction to individuals or HUF‟s in respect of amount paid for medical treatment of specified diseases. The deduction value is proposed to be increased to INR 100,000 from INR 60,000

Withdrawal from NPS S c h e me

An employee contributing to NPS is allowed an exemption in respect of 40% of the total amount payable to him on closure of his account or his opting out. This was previously not allowed to non-employee subscribers. However, it is proposed to extend the said benefit to all subscribers

Deduction in respect of interest income to senior citizen

Deduction of INR 10,000 is allowed under 80TTA with respect to interest income from savings account. It is proposed to allow a deduction of INR 50,000 in respect of interest income from deposits held by senior citizens.

Also it is proposed to amend section 194A to raise the threshold for deduction of TDS on interest income from 10,000 to 50,000

PF / Pension

As a measure to incentivise employment of women in formal sector and to enable higher take home wages, women employees contribution for first three years of employment is proposed to be reduced to 8%. However, employer contribution to continue at current rates.

Non-Corporate Assesses – Tax
Assesses (less than <) 60 Years


FY 2018-19

Tax rate

0- 2,50,000


2,50,001- 5,00,000*


5,00,001- 10,00,000


10,00,000 Plus


Surcharge Applicable to Individual Income

FY 2018-19

Tax rate

0- 5,00,000


50,00,001- 1,00,00,000


1,00,00,000 plus


Assesses (more than >) 60 years and (less than <) 80 years  / Senior Citizens

FY 2018-19

Tax rate

0- 3,00,000


300001- 500000*


5,00,001- 10,00,000


10,00,000 Plus


Assesses (more than>) 80 years 

FY 2018-19

Tax rate

0- 5,00,000


5,00,001- 10,00,000


10,00,000 Plus


Corporate Assesses – Tax 

Sub Category


Tax Rates

Corporate tax rate reduced to 25% (plus applicable surcharge and cess) for domestic companies with total turnover or gross receipts not exceeding INR250 Crores for assessment year 2017-18

Health and Education Cess at 4% instead of Education Cess of 3%

MAT relief for Companies undergoing Corporate Insolvency Resolution Process

It is proposed to amend section 115JB to provide that the aggregate amount of unabsorbed deprec iation and loss brought forward (excluding unabsorbed depreciation) shall be allowed to be reduced from the book profit, if a company‟s application for corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 has been admitted by the Adjudicating Authority.

Benefit of carry forward and set off of losses pertaining to companies undergoing corporate insolvency resolution process

Section 79 of the act provides for carry forward and set off of losses in a closely held company only if there is a continuity in the beneficial owner of the shares carrying not less than 51% of the voting power on the last day of the year or years in which the loss is incurred.

In case of company seeking insolvency resolution involves change in the beneficial owners of shares is beyond the persmissible limit under section 79. Therefore, it is proposed to relax the rigors of section 79 in insolvency cases.

Measures to promote Start ups

Deduction under 80 IAC shall be available to eligible start-ups for consecutive three out of seven assessment years if it

> is incorporated on or after 1 April 2018 but before 1 April 2020,

> turnover doesn‟t exceed INR 25crores for seven previous years

> if it is engaged in innovation, development or improvement of products or processes or services, or a scalable business model with a high potential of employment generation or wealth creation.

International financial services centre (IFSC)

It is proposed to amend section 47 of the act to provide that transactions pertaining to transfer of a capital asset being bond or global depository receipt under 115AC, through recognised stock exchange located in international financial services centre be exempt where consideration is paid in foreign currency.

Alternate Minimum Tax for a unit located in International Financial Services Center to be 9% (plus applicable surcharge and cess)

Application of dividend distribution tax to deemed dividend

Deemed Dividend under section 2(22)(e) is taxed in the hands of the recipient at the applicable marginal rate.

Now it is proposed to bring deemed dividend under section 115 O and proposed to be taxed at 30%, without grossing up.

Royalty and FTS payment by NTRO

Section 195 requires a person to deduct to deduct tax at the time of payment or credit to a non resident.

The national technical research organization (NTRO), it is proposed to amend section 10 so as to provide that the income arising to the non resident , not being a company or foreign company, by way of royalty from or fees for technical services rendered in or outside india to the NTRO will be exempt from income tax.

Aligning the scope of business connection with modified PE Rule as per Multilateral instrument

Business connection amended in section 9 to include any business activities carried through a person who, acting on behalf of the non-resident, habitually concludes contracts or habitually plays the principal role leading to conclusion of contracts by the non-resident. It is further proposed that the contracts should be-

o in the name of the non-resident; or

o for the transfer of the ownership of, or for the granting of the righttouse, property owned by that non-resident or that the non-resident has the right to use; or

o for the provision of services by that non-resident.

Business Connection to include significant economic presence

Explanation 2 to the section 9 which defines „business connection‟ is also narrow in its scope since it limits the taxability of certain activities or transactions of non- resident to those carried out through a dependent agent. Therefore, emerging business models such as digitized businesses, which do not require physical presence of itself or any agent in India, is not covered within the scope of clause (i) of sub-section (1) of section 9 of the Act.

In view of the above, it is proposed to amend clause (i) of sub-section (1) of section 9 of the Act to provide that ‘significant economic presence’ in India shall also constitute ‘business connection’. Further, “significant economic presence” for this purpose ,shall mean-

o any transaction in respect of any goods, services or property carried out by a non-resident in India including provision of download of data or software in India if the aggregate of payments arising from such transaction or transactions during the previous year exceeds the amount as may be prescribed; or

a systematic and continuous soliciting of its business activities or engaging in interaction with such number of users as may be prescribed, in India through digital means.

The existing tax treaties would not be impacted by the concept of significant economic presence, however, attempts will be made to include the concept in the future Indian tax treaties.

Amendments in relation to notified Income Computation and Disclosure Standards.

Several provisions of the Act, as regards applicability of Income Computation and Disclosure Standards, stand amended. This is expected to ensure a higher level of certainty in relation to ICDS

Long term capital gain tax on sale of equity shares etc.

Long term capital gains on sale of an equity share of a listed company or a unit of an equity oriented fund or unit of a business trust by all assessees (including FII) in excess of INR 100,000 shall be taxable at 10% subject to satisfaction of certain conditions.

Equity Oriented Mutual funds to be liable to pay tax at the rate of 10% on income distributed to unit holders

Tax on transfer of immovable property

No adjustments to sale consideration, in respect of transfer of immovable property, will be required if the difference between the stamp duty value and sale consideration on transfer of immovable property is not more than 5%.

Rationalisation of provisions relating to country by country

Section 286 of the Act, contains provisions relating to specific reporting regime in the form of country by country report (CbCR) in respect of international group. The following amendments are propsed to be made so as to improve the effectiveness and reduce the compliance burden of such reporting :

The time allowed for furnishing the CbCR, in the case of parent entity or Alternative Reporting Entity (ARE), resident in India, is proposed to be extended to twelve months from the end of reporting accounting year;

> constituent entity resident in India, having a non-resident parent, shall also furnish CbCR in case its parent entity outside India has no obligation to file the report of the nature referred to in sub-section (2) in the latter‟s country or territory

> the time allowed for furnishing the CbCR, in the case of constituent entity resident in India, having a non-resident parent, shall be twelve months from the end of reporting accounting year;

> the due date for furnishing of CbCR by the the ARE of an international group, the parent entity of which is outside India, with the tax authority of the country or territory of which it is resident, will be the due date specified by that country or territory;

> Agreement would mean an agreement referred to in sub-section (1) of section 90 or sub-section (1) of section 90A, and also an agreement for exchange of the report referred to in sub-section (2) and sub-section (4) as may be notified by the Central Government;

> “reporting accounting year” has been defined to mean the accounting year in respect of which the financial and operational results are required to be reflected in the report referred to in sub-section (2) and sub-section (4).

Deduction in respect of income of Farm producer companies

100% deduction in respect of income of farm producer companies for period of 5 years introduced (having turnover upto INR 100 crores)

Tax treatment of transactions in respect of trading in agricultural commodity derivatives

Trading of agricultural commodity derivatives which is even not charged to commodity transaction tax shall be treated as non-speculative


* Disallowance for certain cash payments would be applicable to certain entities claiming benefit of section 10(23C)

* New scheme for scrutiny assessments (e-assessments) to be introduced by way of notification

* Compensation (capital or revenue) for termination or modification of a contract relating to business to be taxable as business income and relating to employment to be taxable as income from other sources

* Conversion of stock-in-trade to capital asset to be taxable as business income at the fair market value („FMV‟) as on date of conversion

Excise Duties :



Excise duty on Petrol and Diesel

Changes in Basic Excise Duty on motor spirit (petrol) and high speed diesel oil (effective from February 2, 2018)


Existing Rate / litre

Revised Rate / litre

Unbranded Petrol



Branded Petrol



Unbranded Diesel



Branded Diesel



> Additional Duty of Excise (Road Cess) of INR 6 per litre on motor spirit (petrol) and high speed diesel oil will be abolished upon enactment of the Finance Bill, 2018.

> Road and Infrastructure Cess levied on petrol and high-speed diesel at INR 8 per litre.

> Upto the enactment of Bill, levy of road cess has been exempted on domestically manufactured and produced petrol and high speed diesel.

Other exemptions

The following products are exempt from Road and Infrastructure cess subject to payment of appropriate excise duties on petrol and diesel and GST on ethanol or bio- diesel used for making such blends.

(i) 5% ethanol blended petrol. (ii) 10% ethanol blended petrol. (iii) Bio-diesel, up to 20% volume.

Service Tax : 



Retrospective exemptions granted

>> Life Insurance services provided to Coast Guard personnel by the Naval Group Insurance Fund (for the period 10 September 2004 to 30 June 2017)

>> Services by Goods and Services Tax Network to Central Government, State Government or Union Territories (for the period 28 March 2013 to 30 June 2017) are proposed to be exempted from service tax.

>> Government‟s share of profit petroleum on services by Government by way of grant of license or lease to explore / mine petroleum crude or natural gas or both (for the period 1 April 2016 to 30 June 2017).

>> Refund can be claimed within 6 months from enactment of the Finance Bill, 2018.

Customs Duty :




> Central Board of Excise and Customs to be renamed as the Central Board of Indirect Taxes and Customs (effective from date of enactment of Finance Bill)


> “Assessment” will include specific aspects such as classification, duty, valuation, exemption or concession of duty etc.

Rate of customs duty

> Rate of basic customs duty is 10%

Change in Customs Tariff Act, 1975

> IGST Valuation methodology and compensation cess for Warehoused goods sold prior to clearance for home consumption or export has been prescribed.

Social Welfare Surcharge

> A new levy in form of Social welfare surcharge at the standard rate of 10% on aggregate of customs duties has been introduced effective immediately. This e x c l u d e s S a f e g u a r d d u t i e s , C V D , A n t i – d u mp i n g d u t y a n d S o c i a l W e l f a r e Surcharge. Certain goods exempt from SWS and certain items such as Petrol, HSD, Gold and Silver are at 3% ( Notification 11/12/13 of 2018 ).

Road and Infrastructure Cess

> The existing Road Cess (levied at INR 6 per litre) on Petrol and High Speed Diesel has been replaced with the new Road and Infrastructure Cess (to be levied at INR 8 per litre). However, the total duty incidence on import of both the products remains the same due to change in CVD


> The scope of Customs Act has been expanded to apply to any offence or contravention committed outside India by any person unless specified otherwise.

Indian Customs Waters

> Definition of „Indian Customs Waters‟ has been amended to extend its limit to „Exclusive Economic Zone‟ of India upto 200 nautical miles from 12 nautical miles.

Redemption Penalty

> Requirement to pay redemption fine dispensed with in cases of voluntary payment of all dues. Further, the option to pay redemption fine to be void, if not paid within 120 days from the date such option was extended.

Risk based Selection

> Provisions introduced in Customs Act, 1962 to provide legal backing for verification of risk based selection of self-assessment through customs automated system. The methodology of Risk based Selection has been codified in the law

Show Cause notice

· Process of pre-notice consultation by the authorities before issuance of demand notice for recovery of duty or refund in cases other than collusion, suppression, etc. This is intended to enable ease of the process and to minimise litigation.

> Provision introduced for issuance of supplementary SCN in specified circumstances.

Revised guidelines for Advance Ruling

> Applicant to include any importer or exporter or any other person with justiciable cause to the satisfaction of the authority.

> Application for advance ruling is to be made to Custom Authority for Advance Rulings (CAAR) (Principal Commissioner or Commissioner of Customs)

> The time limit for pronouncement of ruling is reduced from 6 months to 3 months.

> Appeal against the order of CAAR can be made before Authority for Advance Ruling under the Income Tax Act.

Education and SHE Cess

> Education cess and secondary and higher education cess abolished

Time Limits

> Time limits set for adjudication proceedings except in certain cases. In the event that proceedings are not completed within the time frame, it shall be deemed as if no notice is issued.


> Government is now empowered to exempt goods which are imported for repair, further processing or manufacture, Re-imported for repair, further processing or manufacture after exports.

E Payments

> A Facility of electronic cash ledger has been introduced and the payment of duty, interest and penalty is possible through such cash ledger

Basic Customs Duty Rates on – some products


Raw Cashew
Bricks, blocks , tiles, ceramic goods
Solar tempered glass for manufacture of panels etc

Basic Customs Duty Rates on – some products


Crude Edible Vegetable Oil

Refined edible vegetable Oil

Food Preparations ( certain exclusions )

Perfumes, beauty, make up preparations etc

Specified parts of mobile phones

Truck and Bus radial tyres

Woven fabrics of Silk

LCD and LED panels

Footwear and parts of footwear

Refractory bricks and ceramic goods

Cut and polished coloured gem stones

Diamonds including lab grown, semi processed , half cut, broken etc , Non industrial diamonds

Imitation jewellery
Spark ignition engines of certain motor vehicles Compression ignition engines of certain motor vehicles Mattresses
Scent and toilet sprays
Cigarette lighters

Compile by NMR & Associates Chartered Accounts
For any information/assistance Contact: CA. NAGARAJ MUTT RACHAIAH

e-Mail ca.rajmrn@gmail.com | nmrandassociates@gmail.com

Cell: +91 9980 662 817 | Phone +91 8023 464 517



Reasons to Get a Personal Loan

Personal loan is always an option to look for when you need huge amount for unseen or unknown reasons. Though it is quite expensive, it is accessible. People look up for personal loan for different reasons. Some reasons can be really for true and good while others reasons for personal loan can be for a mere waste such as taking personal loan for gambling is really not a wise decision.

However, loanyantra helps you to find out the real reasons for when to get a personal loan.

The most popular reasons to get a personal loan are :

  1. Paying off debt / To consolidate Debt : You may be stuck up with some long-time pending loans which may be eating too much of your income. Personal loans are handy and affordable as you can avail the personal loan to pay off those debts. Some of such debts may include, credit card bills, car loans, home related loans like home improvement loans,etc.

At times, you might have different loans under different names paying different interest rates. To avoid confusion or if you find clearing all the loans is worth, then opting for a personal loan is best.

Home improvement loan is not given for 35 year old houses or if the applicant’s age is above 60 years. To get a personal loan, the banks will not ask to mention a reason. So, if you need changes for your old house, you can get a personal loan.

Paying credit card bills on-time will not affect your credit score. So, it is always advisable to get a personal loan within your limit and clear off all the debts and bills. This will help you in further loan applications.

Reasons to get a personal loan
Reasons to get a personal loan – Loanyantra’s support to you

2. Medical Emergencies : Nothing is more important or more expensive than health. Your insurance might take time to cover your ill health or your dear one’s expenses or medical bills. Or you must not have opted for insurance ever. So, you can avail personal loan to cover all your medical expenses either the unpredictable ones or expenses to fulfill daily medical expenditure.

3. Perform a Wedding : Now-a-days it is very common to plan well in advance to perform a wedding. But marriage is something you never knew what and where it happens or rather when it happens. It truly is ‘Planning the unplanned’.  The so called investments might not reach the maturity period and you might not be able to be left with cash in hand.

So, irrespective of the plans, you can anytime go for a personal loan to fulfill your heart content style of wedding.

But remember opt for a loan amount to an extent you can repay it.

4. Luxury Needs : Today’s world is in comfort-friendly zone. So, if you are in need of that high-end phone or a laptop, or if you crave for that newly launched car or a smart T.V., you can definitely get a personal loan. Usual lifestyle now in India is having a fun-filled and lovely family time. So, the financial crisis might interrupt your vacation plans.  Personal loans always help you to fulfill all your dream desires.

Personal loans are therefore also known as multi-purpose loans as they may be used for a variety of reasons. The lender does not question the intent of the borrower.

Moreover, loanyantra is always with you to take care of your financial health. We assure you with a lower interest rate and that too with the best bank. Also avail the discount for one full year which will again reduce your interest rate.



Home Loan Documents-Upgrade the property with the same builder

Anand & Deepthi, a smart couple, had booked a 2-BHK, an under construction property from a reputed builder in their locality. Anand had a passion to buy a home of his own. With in an year of booking they became proud parents of twins. So to support the couple, Anand’s parents moved to his house. They were flood of relatives who came down to wish them. As Anand & Deepthi were working away from his home town, most of the relatives stayed atleast for a day.  Anand realized he needed his parents support to raise his twins and a 2 BHK would be small for them.

So Anand, wanted to sell this flat and buy a 3 BHK.  When Anand spoke to the builder, builder said he can upgrade to 3 BHK apartment from his 2 BHK apartment.  Anand had availed a loan and already 30% of payment got released from his home loan.

He wanted to know, “What was the process in Home Loan for upgrading a property ? “.  So, he got to know the procedure from the banker who requests him to submit the below documents.

upgrade the property with the same builder
Upgrade your property with the same builder
Documents to be submitted for Upgrading a Property.

1)      Original Cancellation Deed required.

2)      Disbursement Against Registration.

3)      Letter from Builder about the property swap & OCR transferred to New flat no.

4)      Loan to be increased or downsize.

5)      2 cheques required from salary account.

6)      Original Agreement of sale copy.

Anand submits all the above mentioned documents. It took him more than a month to do the entire process.  Now he was happy as he had prepared his sweet home for the future.

Home Loan process for Swapping Flat


Statistics show that 1 in every 100 buyers upgrade their property after they had blocked it.

Loanyantra takes this platform to let you know more about Upgrading the property : 

Some famous justifications include for us Indians to upgrade the property are  “my family needs more room”, “we can free up some cash for our children’s education (or buy a car!)”, or “I’m sure we can make some money from selling the bigger house and downgrade after the kids grow up”.

So, what to know before you upgrade the property –

Are you in the financial position to upgrade? If yes, then cross check if you are aware of the below mentioned points, to ensure you are in the correct line.

  • Have you got the registration sale deed or Agreement of Sale?
  • You need to get the NOC from the builder and you can enter into a Deed of Exchange and you have bounden duty to pay the additional amount in respect of 3BHK.
  • Moreover, if you got the registration of Sale Deed, you have another option also, you can resale the flat to the builder by execution of Resale Deed by receiving your total consideration amount. Later, you can enter a fresh Sale agreement for 3BHK.
  • Also another option involved is Gifting the property to the builder. But please know all the legalities from your lawyer.
What Loanyantra can do when you upgrade the property.

Loanyantra can take care of your home loan and helps you in submitting the right documents. Enjoy the door-step service.

Let us know once you are done with the registration, we will carry forward the rest of the process with the bank you choose.

Always wishing to serve you – Loanyantra.com

When does Home Loan EMI start?

Your Home Loan EMI starts from the time the Bank has created a disbursement cheque. Some banks start your EMI from the date you picked the first disbursment cheque even before you have

First EMI is called broken period EMI. Which is lesser than your EMI.

What is Broken period EMI?

When you opt for EMI payment, say 5th of every month. Now suppose your disbursment cheque is handed over on 25th of the month. Then Bank would calculate interest for 25th till 5th of next month.. say for 10 days and it would take it on 5th. The next EMI will be as per your EMI schedule.

Again you can go for Pre-EMI or Full EMI. I would suggest if you are capable of paying full EMI then start with Full EMI. Most of the times Banks will keep it to Pre-EMI for under construction properties. Which will not decrease your loan tenure.

Plan your loan well, then only you will close it faster and home will be fully yours.

If you already have existing home loans then to plan well and close faster, then manage the loan on Loanyantra for free Home Loan Management Company India: LOANYANTRA

If you are looking for Home Loans and want to plan it well to close fast then apply on LoanYantra | Get Home Loan Online .

21 Thumb Rules of Personal Financial Planning.

Personal financial planning
Personal Financial Plan
21 thumb rules of personal financial planning.

1. 30 % of your income must be used for monthly living expenses.

2. 30% of your income must be used for liabilities repayments, if any..

3. 30% of your income must be SAVED and INVESTED for your future LIVING.

4. 10% of your income must be spared for entertainments, vacations

5. 6 months expenses must be available for emergency fund (should be invested in LIQUID FUND, FD Etc)

6. Home loan must be registered and applied on both husband and wife name. (Both can get benefits on Home loan Tax benefits)

7. Buying second house for investment is not advisable ( Survey reports – it will fetch you only around 3% return)

8. After 45 years of age, not supposed to enter into any BIG LIABILITIES (Higher education of children and wedding of children will happen around 45 to 50 only, so plan now for the same.)

9. Have joint account @ Bank savings account.

10. Property must be registered on both Husband and wife name. (As per legal act – after husband first legal heir is wife, after wife it goes to children).

11. Regular check on Nominations at all financial instruments. if  not nominated, do it now..

12. Only in insurance policy, claims payable to Nominee. In other financial instruments legal heirs certificate is must to get back the settlement

13. Must have Term Insurance to financially secure future of your dependants..

14. Don’t take any financial investment decisions EMOTIONALLY, and also Avoid last minute tax saving investment decisions, plan well in advance.

15. MEDICLAIM is must (in spite of Group mediclaim coverage given at office) (After retirement there is no mediclaim coverage, after 50-55 years of age, it’s very tough and costly to enter into mediclaim)

16. For your jewelry LOCKER, Only one lakh is payable by bank, if theft or fire happen at bank. Provided insurance done.

17. Like same way Government guaranteed only one lakh for your FD also. (Fixed deposits with Banks upto Rs. 1 lakh only are backed by deposit insurance)

18. Know all Tax implications. You cannot avoid paying tax. But you can minimize by way of tax planning and investments..

19. All financial documents must be kept safely and keep family members informed of the same.

20. Financial investments must be followed through personal financial planning adviser.

21. Review your portfolio for every six months.

These are general suggestions, but personal financial planning and investment decisions depend upon case to case.

Have a Healthy and Wealthy Financial Year 2017-2018…..

How bank calculate interest, is it really 8.5% when they say it for home loans?

One should understand well to mange the home loan well else manage your loan for free on Home Loan Management Company India: LOANYANTRA

Interest rate consist of 2 components.

Interest Rate = Margin Rate + MCLR Rate for specific period or Base Rate

When you avail a loan for 8.50% that would be broken up into

8.50 % = 0.50%(Margin) + 8.00% (1-Year MCLR)

Its confusing right.

When ever you take a loan either Fixed or Floating the margin on that day gets fixed.

In case you loan is floating, then the floating will depend on the MCLR Rate for the specific period. Normally most of the banks give you for 1-year. Meaning every 1-year your rate would change as per that days MCLR for that period.

Say after year 1-year MCLR is 9.75% then your interest rate would be 10.25%.

10.25% = 0.50% + 9.25%

For more details you can check the blog : Demonetisation effect on Home Loans – Get Home Loan Online In India

Which is most preferred bank for home loan in India?

Home Loan depends on following factors

  1. Your Salary or Your Business turnover
  2. Your age
  3. Your Existing Loans
  4. Your Credit Score.
  5. Last but not the least the Property you are buying & Own contribution to pay 20% of the property
  6. Location , approvals of the property.

Your Salary : You should be earning enough to pay the 80 lac EMI.

Your Age : Based on your age, maximum Loan tenure will be decided. Before you retire i.e 58 years you should be clearing the loan.

Existing Loans : If you have any exiting Loans, you will be paying EMI so you overall eligibility would come down for the next loan.

Credit Score : Banks/NBFC would look at your credit report and based on how you have paid will decide to go if they want to give you loan

Property : When you are asking for Rs 80 lac loan, it would mean at least the property should be Rs 1 crore. Technically the price of the property should support it and you have to pay 20% from your self funding and 80% you can take loan. It should not be like for Rs 10 Lac property you are paying Rs 1 Crore.

Approvals of the property : Based on the Location and type of approvals and amount of deviation while constructing banks would take a call if they will be giving loan or not.

So based on the property you have selected and based on your financial profile you need to select the bank and the loan product. Some not so famous banks will have better products for certain properties.

Plan your loan well, so that you will close faster and home will be fully yours.

If you are looking for Home Loans and want right home loan fit for you and to plan it well to close fast then apply on LoanYantra | Get Home Loan Online .

If you already have existing home loans then to plan it well and close faster, then manage the loan on Loanyantra for free Home Loan Management Company India: LOANYANTRA

Guide to the Home Loan Process

Buying a home is one of the major decisions a person has to take during his life. It is rare to find someone who pays the entire cost of home at one go. A home loan is an essential part of any home buying endeavor. Taking a home loan is a long journey, which involves many stages. The key to getting your home loan in a smooth way is being familiar with the entire home loan process.

Know the home loan process before-hand
Beginning the home loan process in India

The process of getting a home loan starts with a formal application for the loan. The application form requires certain basic information about you. This will include your personal, residential, income, employment, educational details and details about the property, estimated costs and current means of financing the property. Though the requirements may vary from bank to bank but there are certain things which every bank will ask.

The application form must be supported with valid documents to substantiate the facts. Generally the banks will ask you to submit following documents.

  • Income proof
  • Age proof
  • Identity proof
  • Address proof
  • Employment details
  • Proof of educational qualifications
  • Details about the property if finalized
  • Bank statements

Proof of income : This will need to be backed up by proof such as copies of last three years’ Income Tax returns (along with copies of Computation of Income/Annual accounts, if any), Form 16/Form 16A, last three months’ salary slips, copies of the last 6 months’ statements of all your active bank accounts in which your salary/business income details are reflected, etc. Other documents that you need to provide with your application form include age proof, address proof and identification proof. You may also be asked to give your employment details.

Age proof : Copy of your school leaving certificate/Driving license/Passport/ration card/PAN card/Election Commission’s card/etc.

Identification proof : Same as above, but with photograph. Sometimes, the same document if it contains a photograph, the current residential address and the correct age can be the proof for all 3 things.

Address proof : Similar documents need to be provided to prove that you are actually staying at your current address.

Your employment details: If your company is not well‐known, then a short summary about the nature of the company, its business lines, its main customers, its competitors, number of offices, number of employees, turnover, profit, etc may be needed. Usually, the company profile that is available on the standard website of the company is enough.

Educational qualification : The copy of certificates of your higher educational qualification needs to be submitted.

The purpose of the entire exercise is to ascertain the suitability of an applicant for a home loan. The income documents and bank statements provide vital clues to the bank regarding your financial health.

Processing fees for home loans in India. : An important thing to note about home loans is the processing fee. Banks charge a processing fee for every home loan application. This fees is non refundable. This fees is used by the bank to start and maintain the home loan process including completing the various formalities during the entire period.

Evaluation and verification of home loan applicant : After applying successfully for the home loan and submitting the processing fees, the bank evaluates your application, decides in principal about your home loan and requires a personal meeting with the bank officials. This decision for personal interaction can be taken within 2-3 days of submitting a complete application. The purpose of this personal interaction is to know more about the borrower and his repayment capacity. Being satisfied by your application and personal interaction, the bank proceeds to verify all the facts that you mentioned in your application for home loan. A field investigation process is initiated – to confirm and validate everything stated in the application form. Qualified representatives are sent by the bank to your office and place of residence to ascertain the facts. The references provided in the application are cross checked and verified.

Verification of repayment capacity : Once the field investigations over, the bank now goes ahead to verify your repayment capacity. This is the most vital part of any home loan process. If the bank finds that you’ll not be able to repay the money back with interest on time, it will simply deny you any home loan offer. On the other hand if the bank finds that all’s well and is convinced by your repayment capacity, it sanctions your home loan. Based on how well the bank is satisfied by your financial conditions and repayment capacity the bank can issue a conditional sanction or unconditional sanction. If the sanction is conditional, you’ll have to fulfill the conditions imposed before the loan is disbursed.

Sanction letter for home loan : The bank then prepares a sanction letter which contains the following detail:

  • The amount of home loan sanctioned
  • The interest rate applicable on your home loan
  • Whether the interest rate is fixed or floating
  • Your home loan tenure
  • The mode of repayment of the home loan
  • If any special scheme applies to the home loan, its details
  • The terms and conditions associated with the home loan

If you find the offer attractive and agree with all the facts mentioned in the sanction letter, you will have to provide an acceptance copy to the bank. This is generally a duplicate of the sanction letter signed by you, provided to the bank for its records. If the bank charges any administrative fee, it will have to be submitted at this stage.

Verification of the property : Now the bank will verify the property in question. The home loan is a secured loan with the property being used as the security or collateral. So, to get the home loan you must submit the original documents of the property to the bank. The title deeds, no-objection certificates and other documents required by the bank are to be submitted in original and the bank keeps them safely until you repay the entire loan amount. After taking the papers, bank conducts a legal check so as to verify that the property has a clear title and the home loan is being disbursed to the right person and for the right reasons. Banks don’t lend for disputed properties and for titles where ownership cannot be easily enforced.

Along with the legal check, banks also send experts to the location of your property to conduct a technical valuation. If the property is under construction, the banks verify the stage of construction, quality of construction, progress of construction, locality etc. and evaluate the property on established parameters. In case where the property is ready or is being resold the bank verifies the ownership, maintenance, age of property, quality of construction, locality and required legal clearances. The banks have qualified valuators, which assess the value of property on various parameters and decide on the amount of loan

The sole purpose of all this exercise is to ensure that the property has a clear title, is technically sound and meets the valuation standards of the bank.

Note: Verification is not necessary if loan is being sanctioned by a tie-up Bank.

The disbursal of home loan : Once the formalities are completed and the bank is satisfied with the legal, technical and financial valuation of the property, the registration process for the home loan begins. The legal documents are to be prepared on stamp papers of required denominations in a format approved by the bank’s lawyer. The home loan agreement is then signed and you need to submit the post dated cheques for the agreed term. After the home loan agreement the loan disbursal process begins. Depending on the home loan purpose, and the agreed type of disbursal (lump sum or in stages), banks disburse the home loan amount.

Income Tax certificate

Every bank issues an income tax certificate that serves as requisite proof to let you avail of tax benefits that accrue on repayment of a home loan. This will typically contain the total amount of interest and capital repaid during the year. This is mandatory to claim the tax benefit in respect of self-occupied property. You will have to file this with your tax returns and submit this to your employer or chartered accountant to calculate your tax liability.

How Loanyantra Works During the Home Loan Process :

It is our work to make you feel at ease during the process. We are here to make you select the best and your favourite bank. We ensure that your process is smooth as we send you alerts and remainders about each step before even the agent comes to you. You can always contact our relationship manager for any queries.

Can I avail a loan against another property if I already have a home loan from a bank?

Yes you can avail Loan Against Property for other loan provided you meet the eligibility requirement.

If you are falling short of eligibility, how do you increase it ?

  1. In case, if your spouse is working to increase the eligibility you can add the spouse as a co-applicant to increase the eligibility.
  2. In case if you have rented your other house, then you can show rental income and increase your eligibility.
  3. In case if you have a small loan where in you are paying high amount as EMI, then try to close it to increase the Eligibility.
  4. In case if your tenure of existing home loan is less than maximum tenure you are eligible, then increase the existing home loan tenure to get more loan.
  5. Last but not least, incase if you are paying higher interest rate then the market rate, first thing to do is to correct the EMI to existing rate and reduce the EMI. This would also increase your loan eligibility.

Your eligibility requirement would depend on following things

To get a loan will depends on following factors

  1. Your Salary or Your Business turnover + other incomes
  2. Your age
  3. Your Existing Loans
  4. Your Credit Score.
  5. Last but not the least the Property you are buying & Own contribution to pay 20% of the property

Your Salary : You should be earning enough to pay the EMI + at least 40% of earning for your living expenses.

Your Age : Based on your age, maximum Loan tenure will be decided. Before you retire i.e 58 years you should be clearing the loan.

Existing Loans : If you have any exiting Loans, you will be paying EMI so you overall eligibility would come down for the next loan.

Credit Score : Banks/NBFC would look at your credit report and based on how you have paid will decide to go if they want to give you loan

Property : When you are asking for Rs 80 lac loan, it would mean at least the property should be Rs 1 crore. Technically the price of the property should support it and you have to pay 20% from your self funding and 80% you can take loan. It should not be like for Rs 10 Lac property you are paying Rs 1 Crore.

All banks will not approve all the properties.

Plan your loan well, so that you will close faster and home will be fully yours.

If you are looking for Home Loans and want right home loan fit for you and to plan it well to close fast then apply on LoanYantra | Get Home Loan Online .

If you already have existing home loans then to plan it well and close faster, then manage the loan on Loanyantra for free Home Loan Management Company India: LOANYANTRA