Your queries- Loans; Brother-sister duo is not automatically given loan

Your queries: Loans; Brother-sister duo is not automatically given loan

By Chaitali Dutta

l My unmarried sister wants to take a home loan of Rs 20 lakh. Can I become a co-borrower with her and remove my ownership from the bank records once she gets married?—Brijesh Pant

l I have paid my EMI regularly for five years. Since I will be taking a sabbatical for one year and will get a reduced salary, how can I negotiate with my bank for a one-year moratorium on EMI. I can pay 50% of the EMI for one year and then resume paying the full amount?—Yogesh Parmar

This will be challenging to negotiate with your existing bankers. You may have to do a balance transfer to a new bank/lender. However, there’s no harm in discussing your present situation with the existing creditor and see if it can offer you a new loan with revised terms.

l I retired two years ago. If I take an education loan for my son, will it be in my name and what collateral do I have to give?—Jitender Kumar

The education loan will be in joint name with both your names. The collateral need and the amount will depend on what you’re looking for. Usually, a mortgage of a property or lien on financial assets like FDs and RBI bonds is acceptable.

l How will the interest rate on a car loan be calculated? Will the amount of EMI be fixed even if the repo rate rises or falls?—KP Sharma

The car loan interest is calculated on monthly rests. It will usually be at a floating rate of interest. The rate is pegged to the repo rate. The EMI is fixed on the existing rate. It remains constant for the entire loan period. However, with the repo rate going up and down, the tenure of your loan will be adjusted up or down.

l I am planning to buy a pre-used imported car. Will I get a loan from a bank at a lower cost as the rates charged by some private financers are in the range of 12-15%? I am self-employed; what are the supporting documents that I have to show to the bank?—Lakshya Kumar

The car loan eligibility, sanction, documentation, and rate of interest would be similar to used car loan financing. The bank/NBFC will verify your loan repayment capacity. This is usually done through three years of ITR and the last six months of bank statements to show the adequacy of cash flows to service the loan. These papers are in addition to the car documentation and history.

l For a top-up loan, what is the limit that I can apply for and will the interest rate be lower than that of the home loan?—Manoj Kaushal

The top-up home loan does not exceed 70-75% of the original loan. It also depends on your repayment capacity, level of other debts, value of the property and the internal guidelines of the lender. The interest rate of a top-up loan would be in sync with the prevailing home loan rates.

The writer is personal finance wellness expert and founder of AZUKE Finance. Send your queries to [email protected]