A Guide To Home Loan - Finserv Markets

1. A Guide To Home Loan At Finserv Markets What is a Home Loan? A home loan is an amount of money that an individual borrows from a bank or money lending company at a certain rate of interest to be paid with the EMI every month. The property is taken as a security by the money lending company for the Home Loan. The property can either be commercial or personal in nature. When the borrower cannot pay the dues, the lender will possess all the legal rights to recover the outstanding loan amount by sale of the property in question. Types Of Home Loan? There are many types of home loans available to cater to the different housing needs that people have. Let’s discuss some of the different types of these loan offerings in the subsequent paragraphs. • Loans for Purchase of Land • Loans for Home Purchase • Loans for Constructing a House • House Expansion or Extension Loans • Home Conversion Loans • Loans for Home Improvement • Balance Transfer Home Loans • NRI Home Loans • Bridged Loans • Stamp Duty Loans Loans for Purchase of Land Several institutions provide loans for the purchase of a plot of land. Owning a plot provides a lot of flexibility to owners, who can construct a house as per their discretion. You can also purchase the land simply for the purpose of an investment. Loans for Home Purchase This is undoubtedly the most popular variant of Bajaj Finserv housing loans and is used for buying a brand new or a pre-owned house. Your interest rate will be either fixed or floating. Typically, the interest will be between 9.85% and 11.25%. Loans for Constructing a House

2. This is for people wishing to build their own house instead of buying a pre-constructed one. The plot should be purchased within a year of application to be included in the loan amount. Your loan amount will be based on the approximate construction cost. House Expansion or Extension Loans Many would like to add extra rooms or a balcony to their house and this loan is perfect for such clients. It’s a type of financial assistance for altering the structure of your house or for home extensions. Home Conversion Loans This loan can be used by those individuals who are currently paying off a housing loan, but would like to move into a new house. Through the home conversion option, they can transfer their existing loan to the new home. Loans for Home Improvement Home renovations or repairs can be quite expensive and can make a dent in your savings. This type of Bajaj Finserv Home Loan is designed to take care of internal repairs, electrical renovation, painting and more. Balance Transfer Home Loans This option allows you to transfer your loan from one lender to another without any hassles. Individuals may choose to move to another lender for better services or lower interest rates. NRI Home Loans Indian citizens who reside abroad are known as Non-Resident Indians (NRI). This scheme is specially designed for NRIs who wish to purchase a residential property in India. These loans are commonly provided by many Indian public and private sector banks. Bridged Loans They are short term loans provided for existing homeowners wishing to purchase a new property. This loan will act as a contingency fund for buying your new house until the old home is finally sold off. Stamp Duty Loans Relatively unknown among the masses, this variety of housing loans will cover the stamp duty charges incurred while purchasing your new property. Now that you know about the different types of home loans, you can apply for the one that fulfils your needs and requirements. Always ensure that you educate yourself about the interest rates before you choose your preferred lender.

3. What Is the Eligibility Criteria For Home Loan? You must be a citizen residing in India. You must be a salaried individual with at least 3 years of experience. Salaried individuals between the age of 23 to 62 are eligible and can apply for a Home Loan. Home loan amount you can apply for - Minimum – 10 Lakh and maximum - 3.5 Crore. How To Apply For a Home Loan? Applying for your home loan: You will be initially required to fill out an application form with your personal details. This will help the bank/financial institution determine your home loan eligibility. Once that’s done, the following documents will have to be submitted as a part of the process • ID (Identity) Proof: For example: AAdhar Card / Driving License / Passport etc. • Age Proof: For example, AAdhar Card / Birth Certification / Passport etc. • Address Proof For example, Electricity Bill, Aadhar Card / Passport / Rent Agreement (in case currently residing on rent) etc. • Employment Details • Bank Statements • Pan Card • Property Details At Finserv Markets, the online applications process for applying home loan is very smooth and eligibility criteria are easy. Paying the processing fee: At Finserv Markets, we charge a small amount as processing fee which ranges from 0.25% to 0.50% of the total loan amount. Verification: This is done to gauge the applicant’s repayment capability. The amount that you wish to borrow will be the foremost factor that’ll be taken into consideration. Other things like the value of your existing assets and past debt repayment records will also be considered while determining your home loan eligibility. A final decision regarding the principal amount will be taken by the bank on the basis of this evaluation report. Finserv Markets – a prominent financial institution, offers clients flexible payback tenures based on their repayment capacity. This makes things even more

4. convenient and easy for customers apart from the fact that your loan will be provided by a top- notch financial assistance provider. Drafting your home loan offer letter: Once the results obtained from the verification process are satisfactory, the bank will provide you with a home loan offer letter. The following details will be included in it: • Interest rate charged • Sanctioned principal amount • Loan tenure • Method of repayment • Terms and conditions • dotted line since these would include all fees and surcharges along with penalties (if any) in case of foreclosure/prepayment of the loan. This is critical since it has an impact on your loan cost It is advisable that you carefully review the terms and conditions before you sign on the • Special schemes Upon receiving it, you can provide a sign stating your consent if you find the offer reasonable. Property verification: All legal documents pertaining to the property in question will be verified by the bank / financial institution after which an inspection will be conducted and a verification report will be generated detailing out the different aspects of the property. Disbursal: Finally, upon verification, validation, and approval, the loan amount will be disbursed and the same will be credited directly to your bank account. The entire process will be completed online in an easy, convenient and hassle-free way. Due to the volatility of the interest rates and banking policies, aspirants need to be careful while selecting their financial providers. It is always advisable to rely on a trusted and regulated institution like Finserv Markets for your home loan requirements. Also, consider referring other blogs or seek guidance from an expert before making a final decision. Documents Required For Home Loan KYC Documents Know your customer documents are the basic details of the borrower, like their name, address, etc. For the KYC documents, one can submit: • PAN card • Address proof – Passport, Voter ID, and Copy of rent agreement • Passport sized photograph Income Proof

5. Banks/ Non-Banking Financial Companies (NBFCs) thoroughly analyse the income and finance history to evaluate lender’s loan eligibility. It is important that there is in flow of income. The income should reflect on the lender’s bank account only after assessing the monthly income, borrowers approve loans. To show the regular income an individual can furnish the following documents: • Form 16 (both Part A & Part B) and IT Returns of last two years • Salary slips of last three months • Bank account statement of last six months • Employee ID card • Employer Certificate/ Appointment Letter/ Increment Letter (as applicable) Property Documents Lenders not only conduct a background check of the borrower but they also do a check on the property before approving the home loan. It is prudent that the construction of the house is done under legal grounds and has all the permissions in place. The property documents stay with the bank/NBFCs as security which explains the intense scrutiny. If the borrower defaults the loan or fails to repay, the property ownership goes to the lender and they auction it to retrieve lost money. The documents that require to stay with lenders are: • Registered Agreement for Sale • Commencement Certificate • Index II • Approved Building Plan copy • Registration Receipt • Payment receipts to the builder • Sanction letter • Occupancy Certificate • Chain agreement from the previous owner • Society maintenance bill copy • Society Share certificate • Society Registration certificate • Possession letter / Allotment letter • Electricity Bill Copy • NOC from Society • Property Insurance copy

6. The list is pretty much what any lender would require. It is always better to be prepared than to be thrown in situations where the paper work gets difficult to manage. Maintain all the documents, share it with the lender even if it is of the least importance. Home Loan EMI Calculator Home loan is one of the biggest loans that you will avail in your lifetime. Naturally, repaying the home loan is a huge financial burden. Hence, to ease this burden, leading banks/financial institutions usually enter into an agreement with you, which allows you to repay your home loan in Equated Monthly Instalments (EMIs). The concept of EMI is to enable you to honour your home loan commitment in parts so as to not impact your financial stability and plans. Now that you have opted to pay your home loan through the EMI option, you need to plan your other monthly commitments well in advance. The aim is to pay the EMI in a timely manner and not miss it because of other financial plans. To do this, you need to know your exact monthly outflow or your EMI amount. The home loan EMI calculator by Finserv Markets is the simplest way to know this. What is an EMI? An EMI is the monthly repayment that you, as a borrower, must make to your lender within the pre-determined / agreed upon loan tenure. The EMI consists of two portions with one portion dedicated to the principal repayment, and the other towards the interest payout. During the initial years, the interest component of the home loan is higher. However, once you move towards the end of your loan tenure, the interest component reduces and the principal repayment amount increases. Thus, the amount of the EMI remains the same throughout the tenure, but the interest component and the principal repayment component varies according to the stage of the loan. The home loan EMI calculator is an online tool by Bajaj Finserv, which lets you provide / key-in certain inputs so that the inbuilt calculator can give you the exact amount you will need to shell out every month towards your home Loan. The three important inputs are: • Loan amount This is the principal amount of the Bajaj Finserv loan that you wish to avail from us. • Rate of interest This is the interest rate that is required to be paid on the amount borrowed. You can enter the interest rate on the home loan as agreed upon with us. • Loan tenure The next input is the loan tenure or Bajaj Finserv loan duration. This is the total term, throughout which the home loan will be serviced. The inputs are taken on a calibrated scale, which allows you to change the inputs according to your preferences. The amount of EMI is calculated within seconds of getting the inputs. Whenever you change the inputs, the EMI result changes accordingly.

7. If you want your financial position to be secure and stable, you have to do sound planning. Before planning your finances, you must know how much you need to pay for each of the commitment. The home loan EMI calculator helps you to make an informed decision about creating a provision for each commitment beforehand. With Finserv Markets, applying for a Bajaj Finserv Home Loan is easy, quick and completely hassle- free. What’s more? Your home loan comes with a plethora of features and benefits that you can avail right from the comfort of your home. So why wait? Head over to Finserv Markets and apply for a home loan with us, today! Tax Benefit On Home Loan Home loans can be of great help if you plan to buy your dream house. Due to a significant change in the rate of interest on home loans, your desire to own a home is no longer a distant dream. Buying a house not only brings satisfaction and a sense of safety, but it also brings with it financial security as well. Many people know about home loans, but only a few know about tax benefits of home loans. One of the simplest ways of knowing about this is by using the home loan tax benefit calculator. This calculator will give you the break-up of your repayment process in within minutes and allow you to review your payment in advance. Home Loan Tax Benefit Calculator • are up to Rs 2 lakhs under Section 24(b) of the Income Tax Act, 1961. Tax benefit on home loans is the same for both self-occupied and rented properties which • like salary to Rs 2 lakh only under Section 24 of the Income Tax Act, 1961. It also aims to confine the loss on house property, which can be reduced from other incomes Following are the tax savings on home loans: Tax Benefits on First Home or Self-Occupied Properties Individuals with self-occupied properties can avail tax benefits on interest paid up on home loans, up to Rs 2 lakh, under Section 24(b) of the Income Tax Act, 1961. This would be due to the deductions from other parts of your income like salary or income from any other source. However, this would be applicable only if the construction of your house is completed within 5 years, calculated from the end of the financial year in which you have taken the loan. Tax Benefits on Rented House For rented homes, it is 30% of the rental income which is municipal tax, standard deduction, and interest paid on the loan for the house is allowed for tax deductions. After all of these deductions, the rental income is zeroed down and then termed as loss from house property. Hence, a taxpayer can save on his/her total income tax payable on rental income as well as your total income. The tax benefit on rented homes remains the same as in cases of a second home or

8. additional property and also in cases where the house is under construction. Enjoy all of these tax benefits and a host of others like online application, the swift disbursal and minimal documentation on applying for a personal loan with Finserv Markets. Tax Benefits on Home Loans Here are 3 sections under which you can claim for tax benefits on home loans: – Deduction on Interest under Section 24 (b) Tax benefits on home loans for payment on interest is allowed under Section 24 (b) of the Income Tax Act, 1961. If you’re paying your monthly EMIs for a home loan, then the interest component can be claimed as tax deduction. You can claim this deduction at the starting of the year wherein the construction of your house is completed. If you have a rented home, then the entire interest for that year can be claimed as a deduction as well. Also, note that even if you have missed your EMI payments during the financial year, you can still claim for a tax deduction on the interest portion of the EMI. Deduction on Principal Repayment under Section 80C You can also claim the principal repayment under Section 80C of the Income Tax Act, 1961. You can claim a maximum amount of Rs. 1.5 Lakh as a deduction under this section. Under the EMI plan, prepayment charges, service fee, processing fee are also eligible for deductions under Section 24 (b). Deduction for First-Time Buyers under Section 80EE This would be an additional deduction of about Rs 50,000 for interest on home loans. It would be over and above Rs 2 lakh deduction under Section 24 (b) and Rs. 1.5 lakh under Section 80C of the Income Tax Act, 1961. For this, you will have to provide a statement from your lender that shows the amount payable and the amount also paid towards the principal and interest. Your balance income after all deductions would then be taxed as per the income tax slabs.