Here are few important FAQ you should know, according to the PNB website.
1. How Do I Benefit If The Interest Is Calculated On A Daily Reducing Balance ?
On the annual reducing balance method, you will continue to pay interest on amounts you repay during the coming one year as the interest for the year is determined on the basis of the balance outstanding at the beginning of the year.
In the case of the daily reducing balance, which is the methodology we employ, your interest is calculated only on the outstanding loan amount, which reduces every time you pay off your EMIs or make any prepayments. This in essence lowers your effective rate of interest significantly.
2. Can I Get An In-Principle Approval And Actually Avail Of The Loan Later ?
Before you choose the house you want to buy, we give you an in principle approval based on your income and repayment capacity.
This makes the entire process of identifying and buying a house easier and more flexible. You won`t be under pressure to identify a house as you know how much funds the bank would make available to you.
3. What Will Be The Repayment Period Of Housing Loan ?
For Construction/ Additions of House/ Flat/Purchase of ready built house/ flat: Loan along-with interest is to be re-paid in equated monthly installments within a period of 30 years inclusive of moratorium period
For carrying out repairs/ renovation / alterations to the house/flat: Loan along-with interest is to be re-paid in equated monthly installments within a period of 15 years inclusive of moratorium period, if any.
4. What Security Do I Have To Furnish ?
PNB requires mortgage of the property for which the loan is being taken. Where mortgage can`t be provided, other tangible security needs to be provided. The title of the property should be clear, for which a certificate would be required from the Bank`s approved advocate, safeguarding your interests as well as Bank’s interests.
In case mortgage cannot be created immediately in situations like house/flat is being purchased/allotted by the Housing Board, Development Authorities or Co-operative Society/Builder, and title/conveyance deed are executed in favour of purchaser only after completion of construction & possession/ making full payment of the cost of house/flat, a stamped Tripartite Agreement is executed amongst Housing Board/Development Authority/Cooperative Society/ Builder, the intending borrower and the Bank before release of the loan.
5. Are NRIs Are Also Eligible For Housing Loan From PNB ?
Loan to NRI/ PIOs is also available for acquisition/construction/repairs/ renovation/improvement of flat/house to be owned in their names. NRIs/PIOs in India as also for the purpose of purchase of plot. This flat/house, acquired by utilization of the loan, can be used for self occupation/letting out. Loan can also be considered where NRI/PIO is a principal borrower with resident close relative(s).
6. What Are The Documents Required By PNB At The Time Of Applying Housing Loan ?
While applying for housing loan, you are required to furnish the following information/ documents:
Loan application form, duly completed, with Photograph.
- Identity Proof
- Address/ Residence Proof
- Age Proof
- Education Qualification Proof
Income Proof:
Salaried Class : Salary Certificate issued by the employer (indicating gross and net salary), Income Tax Return, Bank Statement of Salary account for last six months.
Agriculturist : Record of land holding and cropping pattern or any other proof of income.
For all other individuals : Last 3 years Income Tax Returns or Assessment Order and Computation of Income Statement; Bank Statement of Account for last six months.
Income Proof of spouse/ earning children/ co-borrowers (if applicable).
Undertaking of the borrower/co-borrower as to whether he/she owns residential property in his/her name.
Any other document which may be necessary as per requirement of the case.
7. What Is EMI ?
EMI stands for Equated Monthly Installments. Such installment comprises of both principal and interest component.
8. Can I Prepay The Loan? Are There Any Charges ?
Yes, you can prepay the loan at any stage without any charges on loans sanctioned on Floating rate of interest.
In case of loans sanctioned at fixed rate of interest there are no charges in case it is pre-paid from your own sources. However, prepayment charges of 2% are levied in case of shifting of Housing Loan A/c by takeover to other banks/ housing finance institutions.
You can also deposit more than your EMI amount into your loan account and bring down your interest
The charges and process may vary with banks and NBFCs, one should check and read the documents before applying for a home loan.