RBI guidelines for home loan
RBI has set policies for loans and deposits in India without performing the central bank and other important functions of the country. All policies related to debt are also directed by the RBI and banks operate within the RBI Guidelines. These guidelines can be modified periodically by taking into account different types of loans, liabilities and in view of various macro and micro financial parameters. Here we focus on some guidelines that define the home loan section.
RBI Guidelines for Home Loan:
In the view of the borrower, taking into account the qualifications, submitting the necessary documents and in accordance with the terms repaid by the lender in the loan agreement.
Guidelines for Pre-Payment Claims:
We usually get home loans with a huge interest cost, usually for a large ticket and for a period of 10 to 25 years. This burden can be reduced if the borrower is able to pay the full or partially by reducing the sum or tenure of the borrower. If the borrower chooses to make a partial/full prepaid, the fee will be charged from 2% to 5% of the principal amount that banks and NBFCs do not pay before the RBI guidelines, according to the preemptive fees. Now, according to RBI guidelines, floating interest liabilities are not allowed to charge any fee for prepayment. This decision will greatly affect the home loan transfers.
Home Balance Transfer means you get a low-interest loan from an existing one. We have helped to save huge amount by helping customers switch to low-cost loans in mymoneykarma.com. On the same topic on our blog, you can read about the way home loan transfer policy works. The balance transfer option essentially requires a new loan to close the loan and pay the principal amount that does not pay. Accounts on floating rate loans cancelled by borrowers will result in a new loan without burdening the charge. Nonetheless, banks charge a fixed rate of 1% to 3% on fixed payments.
Loan to value ( LTV) Ratio Guidelines:
The RBI’s announcement in October 2015 affects the loan amount available to the borrower. If the borrower permits the RBI to borrow the debt of 90% of the debtor’s property value.
Guidelines for Home Loan Insurance:
The Banks or Financial Institutions gives a great sense of security to homeowners. Thus, the borrower’s home loan insurance is good to obtain a security net against such eventuality or other unfortunate events such as income or disability.
Sometimes banks can emphasize that the borrower is either insured or borrowed without the knowledge of the debtor. However, RBI guidelines are not mandatory to buy a debtor’s insurance or buy from the lender.
There are some important RBI rules for housing loans in India. These rules affect your decision to take a loan and repay it; So they are important.