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 PantThe loan is sanctioned based on the ownership of the property. You may purchase a property in the name of siblings. However, a brother-sister duo is not automatically sanctioned a loan. The main applicant has to be the sister and the brother can become a co-borrower with an undertaking to stay in the same property. The rules applicable for such loans are different for different banks and NBFCs.

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 KumarThe 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 SharmaThe 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 KumarThe 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 KaushalThe 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]