Home loan issued by the Tamilnad Mercantile Bank has all the relevant features which make it an all-inclusive home loan product. Besides allowing tax benefits, these loans help individuals to build their dream houses without having to worry about finances.
Tamilnad Mercantile Bank Home Loan
Features of this loan are enlisted below for a better understanding:
- The loan can be used for various purposes like:
- For purchasing a land and then constructing a house
- For purchasing a new house
- For purchasing a new flat
- For funding or financing the expenses of renovation or extension done on an existing house
- For purchasing an old house or an old flat
- For taking over an existing home loan from another bank or Financial Institution.
- If the loan is taken for buying an old house or a flat, the same should have been constructed within the last 20 years from the date of application of the loan and the old house or the flat should have a residual life remaining of 15 years or above. The residual life should be evaluated and certified by the bank’s Approved Engineer and the valuation of that property would be done by the bank’s Approved Engineer and Branch Manager.
- If the loan is taken for overtaking an existing loan from a bank or a financial institution, the loan amount sought, should not exceed the outstanding amount of loan taken from another bank or financial institution. Evidence would be required from the bank or institution stating that the loan is a regular account. Moreover, the repayment tenure allowed in case of take-over of an existing loan would be the residual period under the existing loan. If the applicant wishes for a higher tenure, the same can be allowed provided that the tenure falls within the residual life of the house or flat for which the loan was taken. Such residual life would be ascertained and approved by the bank’s Approved Engineer.
- Individuals aged 18 years to 50 years can apply for this loan. If the loan is taken on a joint basis, one of the applicant’s age should be below 50 years even if the other applicant’s age is above 50 years. If the loan is availed by professionals like Chartered Accountants, Doctors, Engineers, Lawyers, etc., the maximum age of availing the loan is extended to 60 years.
- The home loan can be taken for values up to Rs.3 crores. For loans which are taken for renovation and extension purposes, the maximum quantum is limited to Rs.25 lakhs
- If an outright purchase is made, the sanctioned amount of loan would be the purchase cost, market value or Registration Value whichever is lower.
- If the house is constructed on a pre-owned plot of land, the loan is issued after keeping a 10% margin on the loan subject to the condition that the total realizable value of the property after the construction is completed is more than 133.34% of the amount of loan taken for the construction purposes
- If the HUF is availing of the loans, the male members of the HUF should act as guarantors to the loan. If an individual is taking the loan, the spouse, father or a suitable third party should act as a guarantor for the loan. Such a guarantee requirement can be waived by the bank if the repayment capacity of the borrower is ascertained to be good.
- The repayment of the loan availed should be completed within 25 years of availing the loan
- The Equated Monthly Instalments of the loan must never exceed 50% of the take-home salary of the applicant if he is a salaried employee. For others, the ratio should be a minimum of 1.50:1
- A collateral security would be required to avail of the loan facility. Such security would be in the form of an equitable mortgage of the house or flat which would be financed by the loan
- The loan instalments should duly be paid on or before the due date every month. If the borrower defaults on his repayments, a penal interest of 2% over and above the rate of interest applicable on the loan taken would be charged on the outstanding balance of the loan
- There would be a processing fee of 1% of the amount of the loan sanctioned payable by the borrower for availing the loan
The rate of interest charged on the loans would depend on the quantum of loan availed and the repayment tenure chosen.
- Loans which are taken up to Rs.30 lakhs with repayment tenure of up to 5 years, the rate of interest would be the Base rate which is 10.40% per annum.
- If the repayment tenure exceeds 5 years and goes up to 15 years, the rate of interest charged would be Base Rate + 0.25% which is 10.65%.
- For loans having repayment tenures above 15 years, the rate of interest is Base Rate +0.50% which would be equal to 10.90%.
- If the loan amount is higher than Rs.30 lakhs, a flat rate of Base Rate +0.50%, i.e. 10.90% would be charged per annum irrespective of the tenure of repayment chosen by the applicant.
The margin would be maintained by the bank in every instance of loan application. The margin requirement, however, would depend on the purpose for which the loan has been taken.
- For purchasing a land and then constructing a house thereon – 25% margin requirement
- For purchasing a new flat – 25% margin requirement
- For construction of a house – 10% margin requirement
- For renovation of an existing house not older than 5 years – 25% margin requirement
- For renovation of an existing house older than 5 years – 40% margin requirement
- For purchasing an old house or an old flat or its renovation – 30% margin requirement
The processing fees of Tamilnad Mercantile Bank home loan is 1.00% of the limit sanctioned without any maximum cap.
Applying for the loan would require the applicant’s usual KYC documents and the following:
- Proof of income which can be the Income Tax Return, Balance Sheet, Salary Certificate or any other valid documents acceptable as a Proof of Income
- Civil Engineer’s Estimation
- Copy of Title Deed of the Property, wherever applicable
- Approved plan wherever applicable
- Letter from the third party guarantor, wherever applicable
Tamilnad Mercantile Bank also offers home loans meant for Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs). The features of the loan and the eligibility criteria are mentioned below:
- The home loan can be availed by NRIs or PIOs for building a new home on his or her owned land, for buying a ready house or a flat or an under-construction house or flat, for buying an old house or a fat, for buying land for construction of a house where the house must be constructed within 2 years of such land purchase, for taking over an existing home loan from another bank or company, for carrying out repairs, renovations or extensions to an existing property or for reimbursing investments made by the borrower in the year preceding the loan application.
- The loan can be taken for a maximum of 2 housing units
- The amount of loan that shall be granted by the bank, would depend on the purpose for which the loan is required and also from the area of loan application. For metropolitan centers, a maximum loan of Rs.500 lakhs can be taken while for non-metropolitan centers, the maximum amount is limited to Rs.300 lakhs. For house renovations, a maximum of Rs.25 lakhs can be taken as loan and for taking over an existing home loan, the loan amount would not exceed the actual amount of loan which is outstanding with other banks or companies. If a top-up loan is availed, the amount would be the lower of 7.5% of the home loan already availed or Rs.7.5 lakhs.
- For availing a top-up loan, the following conditions must be fulfilled:
- The loan account should not show any outstanding principal or interest amount and the loan should have been regularly paid up to the date of seeking a top-up loan.
- The original LTV(Loan to Value), as mentioned in the home loan, would be maintained and the total loan for calculating the LTV would be the aggregate of the balance of the home loan and the top-up loan.
- The assets would not be revalued for calculating the LTV
- The borrower should have sufficient balance in the salary or his business income as per the required eligibility criteria to meet the EMI payments of the top-up loan
- The loans would be allowed for an additional construction of approved plans only.
- For security, an equitable mortgage of the land, house or flat which is purchased on constructed using the loan would e required.
- For new flats, the margin required would be 25%, for land purchase, the margin would be 25% and for construction purposes, the margin is 10%. Renovations or repairs on homes aged 5 years or less would require a margin of 25% while those of age 5 years and above would require a margin of 40%. Old flats or houses require a margin of 30%.
- Margin requirements would be bought through banking channels either by a direct remittance or from the applicant’s NRE, NRO, FCNR or NRNR Account.
- The guarantee of a resident Indian who is a blood relative of the NRI applicant would be required for the loan. The guarantee can be waived subject to the bank’s analysis
- The repayment period allowed for the loan is a minimum of 5 years and a maximum of 30 years or the buyer reaching 65 years of age, whichever is earlier.
- A moratorium period of 12 months may be allowed if the building is under construction or in other cases as deemed fit by the bank
- For repayment irregularities or defaults a penal interest would be charged which is 2% in addition to the rate of interest applicable on the loan
- 0.25% of the amount of loan sanctioned would be charged as the processing fee exclusive of the relevant taxes.
- There are no documentation or prepayment charges under this loan scheme
- NRIs with an Indian Passport or PIOs with a foreign passport can apply for the loan individually or jointly with a spouse or close relatives.
- PIOs can be citizens of any country except Bangladesh, Pakistan, Sri Lanka, Afghanistan, China, Iran, Nepal, and Bhutan. PIOs should also fulfill the below mentioned criteria:
- They must have held an Indian Passport once, or
- They or either of their parents or grandparents were citizens of India by virtue of the Constitution of India of the Citizenship Act, 1955, or
- The PIO is a spouse of an Indian citizen or an individual mentioned in the above points.
- The age limit for NRIs and PIOs, either individually or jointly, should be within 21 years to 50 years.
- For salaried individuals, they must have stayed abroad for a minimum of 2 years or have a valid job contract abroad for 2 years where 6 months have been completed or they are working abroad on assignments with Government or Government agencies or other specified agencies. If the individual is self-employed, the stay abroad must be for a minimum period of 3 years.
The organization provides the facility of EMI calculators. With the help of this calculator, an individual can find out the Equated Monthly Installments as per his eligibility. The applicant can access Paisabazaar.com site at any time and use the calculator and calculate his EMI depending upon the amount of loan he/she wishes to apply for. All he needs to do select the amount that he/she wishes to borrow, and the anticipated BFL Home loans interest rate. After having selected the desired amount, the user now needs to select the tenure for which he needs the loan, i.e. the repayment period as per his/her convenience. EMI and repayment period share an indirect relationship with each other, i.e. the longer the tenure, the lower is the EMI and vice-versa. Using the slider, the user can exercise various options and play with different repayment period till he/she reaches an EMI amount suitable to him.
Checking the Status of Loan
Disbursement of the actual amount of loan would take some time and customers may want to check the status of their application. The Paisabazaar.com website also provides this facility where the applicants can track their loan’s status. The application reference number and the customer’s mobile number would have to be provided and the page would display the status of the loan within seconds.
Home loans can be applied online through Paisabazaar.com. There some personal details of the applicant would be required, filling and submitting which would allow the applicant to make an online application for his Home Loan. This online process is easy and other home loan products can also be compared or the EMI can also be calculated on the same platform.