By Chaitali Dutta
I had taken a loan of Rs 20 lakh and repaid it last year. Now I want to take Rs 10 lakh as a loan against the existing property to buy some agricultural land. Will a bank issue such a loan and ask for the end-use of the money?
—Alok Kumar
This loan will be considered as a loan against property and the interest rate is higher than a home loan. The quantum is also only 50-60% of the property’s value. The applicant has to pay for the valuation of the property, which the bank will arrange for. The end-use proof is not required.
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If I take an education loan for my son’s higher education, will it be in my name and will I get the tax benefit?
—Rakesh Goyal
Usually, the education loan is in the joint name of the student and one of the parents/ guardians. Yes, if you pay the interest accruals while your son is completing the course, you will be able to claim the tax benefit under Section 80E.
As I have a credit score above 800, how can I negotiate with the bank for a lower interest rate?
—Deepak Madan
Applicants with 800 and above credit score will have to ask for a lower interest with the bank where they apply for the loan. You may also apply for in-principle approval from two to three banks which will enhance your chances to get a larger loan at a lower interest rate.
I intend to take a home loan of Rs 50 lakh next year. Should I avoid multiple short-term personal loan and credit card applications now for liquidity needs?
—Name withheld
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With your intention of securing a home loan in the near future, it would be beneficial to check your CIBIL score. The personal loan is to be taken only for critical needs when no other option is available. If you have multiple loans going on, then your home loan quantum eligibility may be reduced. Having one or two credit cards is useful for managing the cash flow and maximising the benefits of the card.
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