Bank will pay only 65% Not 80% of home loan.How to arrange shortfall of fund ?

POSTED BY Shailesh Mishra ON April 1, 2013 5:45 pm COMMENTS (8)

I have taken Housing Loan from SBI(Max Gain). Total cost of the property is 50L but bank said that they could consider 40L as loanable amount. So they sanctioned 32L loan to me although as per my take home salary, they could have sanctioned bigger loan. Now, when its time to disbursement, they are calculating 50L as total project cost and asking to pay 35% of every demand raised by builder. I paid 4L initially and builder raised request for 10L but bank release only 7.5L .I was of the impression that becuase bank considered 40L as project cost during sanctioning process, I will need to pay 20% of every demand raised by builder but looks like I missed some fine point here.

I was planning to take top up loan for around 10L but as bank started demanding 35% from me, my plan got misbalanced.

What is the best option available to me now? From where can I source extra fund? Personal loan will be the last option.  



8 replies on this article “Bank will pay only 65% Not 80% of home loan.How to arrange shortfall of fund ?”

  1. Dear Shailesh, you can not convert your existing PL into a a top up loan later on. Yes you have the option of availing PL as of now, use it & once your top up loan is available, avail it & payback the PL. No there is no chance of getting Top up before completion of 1Y.



  2. Shailesh Mishra says:

    Thanks once again Ashal.
    Is there any chance of getting top up loan before one year? Do you know any such case ? Can the branch official use its discretion on sanctioning before one year ?
    One more thing Ashal.
    Can i personal loan be converted into topup loan at later stage provided we fulfill topup requirements ? If so, i can take personal loan now and get it converted to top up loan after one year.

  3. Dear Shailesh, registration & stamp duty charges are included in the cost. What abiout selling Gold or Assets & investments?



  4. Shailesh Mishra says:

    Thanks Ashal for replying. Bank sanctioned only 40L as other 10L were the amounts like club membership,adv maintenance,water,parking,registration etc.As per my understanding, bank do not sanction loan of these heads.
    I was of the view that as bank considered 40L as project cost while sanctioning , it will not consider 50L while disbursement so in nutshell , i will have to pay 35% (NOT 20% what i was expecting) which is giving me sleepless nights.I was always aware that i need to manage 10L extra which bank is refused to loan but I never thought that bank will ask to pay so early.

  5. Dear Shailesh, what was the reason of considering only 40L out of 50L cost of your apartment. As the loan is sanctioned as CLP – construction linked payment, bank is rightly saying now that you should match your 35% with every 65% disbursement by bank.

    If your loan is just started, you can not opt for top up loan. The same is available with SBI but only for loans having a year’s track record of repayment. At this juncture, you can not even transfer your loan to any other bank (still you may give it a try with HDFC or Axis).

    Selling your other assets & investments is the only option other than borrowing from friends & relatives.



  6. Shailesh Mishra says:

    Thanks Free financial Calculators.
    1) So do you have any idea on when can i apply for top up loan?
    2) Will any other bank give top up without transferring loan itself ?
    3) Can i talk another home loan from any other bank considering that i still have eligibility to take more loan ?

    Please excuse me if i am sounding so naive. I am .

    1. Don’t worry I am as naive as you are in these things. Let us wait for dear Ashal to enlighten us.

  7. Some options are:
    top-up loan if elligible
    loan against FDs, NSC, KVP, PPF, shares, gold, insurance policies (not a great idea but desperate times call for desperate measures)
    loan with employer if possible
    If you have enough gold sell it.
    If you don’t have any of above assets borrow from friends or relatives.

    Else only option is a personal loan. If you must take a personal loan get with part payment and pre-closure options.

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