Understand the repayment mechanism of a Home Loan

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"Khab thak karza chukaogi re?" (By when will you cough up the money)

"Mujhe aur thoda time de doh". (Please give me some more time)

During the fiftees and the sixtees one never needed to visit a movietheaterto hear this dialogue between a villain and a borrower, the villain delivering it in a husky voice. You could hear it in the business districts of any city, the villain here being a moneylender. Moneylender could fleece a borrower by imposing an interest rate which could go even up to a whopping 8% per month…yes, per month.

Today, thankfully the lending sector is organized. There are various kinds of loans available with amicable terms & conditions regulated by the government to meet different needs, one of them being Home Loans which come with fixed and floating interest rates.

With borrowing comes repayment and Home Loan repayments come in the form of EMI. There are various banking and non-banking institutions that offer Home Loans and it is important to choose a lender who offers the appropriate repayment plan.

Here are some points to know with reference to the repayment mechanism:

Don't go overboard while deciding on the EMI. Consider basic expenses that you need to meet with, regularly
Keep provision to save for expenses that incur after your house is ready, building maintenance charges for instance.
Do not keep a shoestring budget for EMI. Remember, if your EMI bounces for want of adequate bank balance, there will not only be a late fee imposed on you, but even your credit score may plummet
If you are eligible for the government led Pradhan Mantri Awas Yojana (PMAY), you can enjoy a concession in your EMI amount through interest rate subsidy. Do bring it to the notice of your lender and furnish all the relevant documents to apply for PMAY
Understand all the terms and conditions pertaining to EMI repayment from your lender. Do not ignore the fine print.
The repayment period of a Home Loan is proportional to the borrower's age. Lower the age, longer can be the repayment period

To understand the EMI,Home Loan features and available options including balance transfer of an existing Home Loan, we at Kotak Mahindra Bank dig out all the information and rest assured that we don't conceal any conditions or costs. Beware! The scruples of a modern day lender may fall short of that of the aforementioned 'moneylender', just marginally. It's possible that not all lenders can be as transparent as Kotak Mahindra and give you a Quick Home Loan.

Disclaimer: Terms & Conditions Apply.
Credit at sole discretion of Kotak Mahindra Bank Ltd and subject to guidelines issued by RBI from time to time. Bank may engage the services of marketing agents for the purpose of sourcing loan assets.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.