Customer's Guide


What are the types of housing loans available?

Various varieties of housing loans are offered by different financial institutions. Prominent among these are:

  • Home Loans

    This is the basic housing loan for the purchase of a new home, which covers the cost of the flat, deposits and charges, stamp duty and registration charges.

  • Home Improvement / Extension Loans

    These are for the purpose of undertaking repair works and renovations in a home that is already owned by you.

  • Bridge Loans

    Bridge loans are for people who wish to sell their existing house and purchase another one and need finance for the new house until a buyer is found for the old one.

  • Balance Transfer

    A balance transfer indicates the paying off of an existing housing loan and availing of a loan with a lower rate of interest.

  • Refinance Loans

    Refinance loans are taken to pay off the debt incurred from private sources such as relatives and friends, for the purchase of your present house.

  • Loans To NRIs

    These loans are designed as per the requirements of NRIs who want to buy a house in India.

Who can apply for a housing loan?

Any Indian citizen, including Non Resident Indians, with a steady source of income can borrow funds for financing the cost of a flat from housing finance companies and banks.

Can a Non Resident Indian avail of housing loans?

Yes, depending upon the eligibility criteria and policy of the bank.

How much can a person borrow?

Loans are generally disbursed between 70%-80% of the cost of the flat. The balance money is to be funded by the flat purchaser from his own contribution. The percentage of loan would vary from bank to bank.

How does Kalpataru assist a flat purchaser in procuring Housing Finance?

All projects at Kalpataru are preapproved for the grant of home loans by leading housing finance companies and banks. The Kalpataru sales team liaises with the all leading Housing Finance Institutions for project approvals, processing the loan, documentation and disbursement of loans.

What is an EMI?

Equated Monthly Installment ("EMI") is the amount comprising a portion of the interest and the principal loan amount, which is payable by a borrower to the lender every month.

How is the rate of interest calculated in India?

Interest rates vary from time to time and from institution to institution. The interest is calculated either on a daily or monthly reducing or yearly reducing balances.

What is a fixed-rate housing loan?

A fixed-rate housing loan is a loan where the rate of interest is constant through the entire term of the loan period.

What is a floating interest rate housing loan?

A floating interest rate loan is a loan where the interest rate payable is linked to the bank's internal prime lending rate (PLR) such as the base rate which rises and falls as per banks policy.

What are the repayment period options?

Repayment period options range generally from 5 to 20 years. Some of the banks may give loans up to 25 years also.

What are the charges for availing a housing loan?

  • Processing Fees are payable to the lender on applying for a loan and can either be a fixed amount not linked to the loan or may also be a percentage of the loan amount.
  • Prepayment Penalty between 1% and 2% of the amount being prepaid is charged by some institutions when a loan is paid back before the end of the agreed duration. Many banks now don't levy penalty on partial prepayment.
  • Franking Charges as per prevailing rate of Government Authority.

What security is required for a housing loan?

The flat purchased is the primary security and is mortgaged to the lending institution till the entire loan is repaid. Additional security such as life insurance policies, shares, bonds, fixed deposit receipts, national savings certificates can also be offered, as per the requirements of the institution.

Do lending companies require guarantors?

Yes. Many lending companies require 1 guarantor or a co-applicant.

What is the time required for approval of a loan application?

Varies from bank to bank but usually it is 15 - 20 days for a salaried person and 20 - 30 days for a self employed person depending on the applicant's documents.

What is the time required for disbursement of loans?

Usually loans are disbursed within 10 - 15 days after completion of verification by the institution, documentation (original agreement for sale / lodging receipt) and completion of all relevant procedures. Submission of proof that the borrower's own contribution has been paid by him to the vendor / builder / developer is also an important aspect.

Do institutions accept joint loan applications?

Yes, but this policy varies from bank to bank.

What are the documents required at the time of applying for a housing loan?

The standard list of documents required of all loan applicants is as follows:

  • Photographs
  • Proof of age
  • Identity papers
  • Proof of residence

For salaried individuals:

  • Latest salary slip
  • Last 2 years form 16 or equivalent
  • Bank statements reflecting salary credits for the previous six months

For self-employed individuals:

  • Certified copies of balance sheet
  • Profit and loss statement
  • Tax challans / tax returns for the previous 3 years

For partnership/private limited companies:

  • The Articles of Association
  • Partnership deed and details about the firm

For NRIs

  • Latest salary certificate specifying, name (as it appears in the passport)
  • Date of joining
  • Passport number
  • Designation
  • Perquisites and salary
  • Photocopy of labour card/identity card
  • Photocopy of valid resident visa stamped on the passport
  • Photocopy of monthly statement of local bank account
  • Property related documents