60 L Home loan from PNBH, need help for future course of action…..

POSTED BY Pragyan ON October 15, 2012 2:21 pm COMMENTS (3)

I have bought a property jointly with my wife and were in need of a home loan of around 60-65 lakhs. We have also gone for a Contruction Linked Payment Plan and the possession of the said property will be towards end of 2016. Together, me and my wife have a CTC of around 20 lakhs p.a. with no existing loans.

When I went to SBI for a Home loan request they placed a condition saying that they will grant loan only if I submitted the original registry of the home that my father owns as guarantee. So did PNB bank. As we did not want to risk another property while buying a new one, we did not go for this option.

We have finally taken a loan of Rs.6078976 with Pre-EMI of Rs.61716 (starting October 2012) from PNB Housing at a ROI of <10.75 + 0.25> for 20 years. We also paid a processing fee of <0.25>. We have been informed that by opting for Pre-EMI, as the actual amount paid to the builder will increase as construction progress, it will help reduce the principal amount and we could end up paying the bank lesser by 20-25 lakhs on the interest of this total loan.

However, There was some mis-selling done in this process and we did end up feeling a little cheated. We were told a rate of 10.5% which after documents processing came to be 10.75% and as the first payment deadline was due , we had no option left but to proceed with the loan from PNBH.

I know I could have done better by referring this website earlier, but I am now trying to focus on what I can do now to help my cause. Hence, I would very much like to seek help of the experts on this forum which might help me in repaying the loan with as liitle extra cost and interest as possible.

So I’d like advice on if it would be advisable to get it transferred to SBIH or LICH or SBI(not sure if they will accept or not) in the near future or at the earliest possible? I am not sure how to calculate the exact costs in this case or how to get started or research this?

Would really appreciate your help.

Thanks,

Pragyan

3 replies on this article “60 L Home loan from PNBH, need help for future course of action…..”

  1. Credexpert says:

    Dear Pragyan,

    If you have not taken the full disbursement and you are paying the EMI as mentioned, then the question arises – How is the amortisation happening and on what amount of principal is the interest component of the EMI ( as of the current level of disbursement ),is it on the disbursed amount or on the total loan ? It should be on the disbursed portion only.

    On the question of can you switch the loan, that will depend on any conditions that your current lender has on this and may reflect in your offer letter or loan agreement.
    Your current rate is 10.75% – any thoughts of switching should be worth your while if there is interest rate differential of at least 1 % and Nil or low charges for the switch both from the new lender and your current lender.

    Regards,
    Credexpert

  2. Pragyan says:

    Hello Credexpert!

    1. No, I have not taken full disbursement.
    2. No, the builder has been paid only a sum of around 7.5 lakhs as per the first demand of the Construction Linked Plan.
    3. No benefits as its not full disbursement.

    What I mean is that even though the amount disbursed to the builder by the bank is only 7.5 lakhs, I am still paying this 60K EMI from day 1 which is helping me reduce my principal amount.

    1- Is it even possible to transfer a loan at such an early stage of taking a loan?
    2- As my home loan is from PNBH, its BPLR is 14.25% + spread of 3.25%. The ROI is 10.75%. Is there any deal that I can negotiate with the bank that can be of an advantage to me?
    3- PNBH is not linked to base rate and as I understand Housing Co. are as a policy linked only to BPLR. Is that correct?

    And the service that you are suggesting would really be great and much appreciated by all. Good Luck!

    Thanks,
    Pragyan

  3. Credexpert says:

    Dear Pragyan,

    A few clarifications:
    1. Have you taken full disbursement?
    2. Have you paid the builder the full amount, although you need to pay him in stages.
    3. If you have paid, then has he given you any benefits for early payments?

    Also, what you have mentioned seems to be the EMI and not the PRE EMI. (Rs 61,716).
    Whilst most lenders will charge some fee in the normal course, it should be a one time and not an annual fee.

    Interest rate actually charged will depend on rate prevailing at time of disbursement so that could explain the variation.

    Transferring your loan does involve some costs and you should check that before actually switching. Also, the difference in rate should be worth your while and should at least be 1%

    We will shortly be providing a service where we will recommend what loan is the best for an individual, currently, the option is to visit the websites of some of the larger lenders, and make some calls.

    Regards,
    Credexpert

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