Ramesh and Anitha have identified their dream house. The three-bedroom apartment is by a reputed builder, the people who are already living there are great, the amenities and hobby and children's classes are ideal for their daughter to grow in and for them to retire with.
Roopkumar has, after months ofwindow shopping and magazine browsing, identified the right diamond necklace for his wife on their wedding anniversary. However, the necklace costs a lakh over his budget.
Roger, on a one-week deputation to Singapore from his office in India, sees a magnificent digital camera at a steep discount in a mall. The item was not on his purchase list. But the camera which costs `40,000 on discount will cost nothing less than `65,000 in India. He does not want to miss the opportunity to make a killing on the purchase.
One solution for all
The one solution for all the scenes above is to get a loan. But is getting a loan so easy? Yes, it is. The question is - "Have you taken the right loan?" The right loan takes care of the following things:
1. Choosing the right type of loan
2. The processing time matches your needs
3. The interest rate is competitive
4. The EMI is affordable
How to get the best loan?
Anyone with the right background can get a good loan. However, it requires some planning and preparation. In the three scenarios above, the choice of the loan (the first step) is relatively easy. Ramesh and his wife need to go for a housing loan. Roopkumar can opt for a personal loan and Roger can swipe his card for his camera.
After choosing the loan type, to ensure that the best deal is got, one has to take care of the documentation. The better the document support for processing the loan, the better the loan terms offered by the bank/ financial institution.
Document check list for housing loans
For the Ramesh family, who are looking at their housing loan, the checklist will include the following:
1. Documents Provided by the Seller/Builder
a. Property documents
i. The purchase deed of the builder/ seller
ii. DTP approval for the site
iii. Building approval documents
iv. Draft copy of the sale deed (which is to be registered)
b. Encumbrance certificate
c. Pre-Approved loan form (if any)
2. Documents to be kept ready by Ramesh
a. Tax returns filing documents for Ramesh and Anitha for 2 years.
i. If salaried without other income, the Form 16 provided by the employer will do as the supporting document.
ii. If salaried with other income, too (like rental, share trading, interest from bank deposit, etc) then the supporting document for all will be required.
iii. If income is from business, then the audited tax filing and income calculation documents will be required.
1. Care should be taken here that the filing dates are at least 6 months apart. Two tax filings within a short period will activate warning radars for the loan processing officer, as the intention for the filing would have been to get the loan.
b. Loan Track (if any) from of all the previous / current loans
c. A lawyer opinion on the documents provided by the builder/ seller. Though the bank/lending institution will do their own legal due diligence, it is better to check with a lawyer before the loan processing, as sometimes one may find a legal problem leading to rejecting the property itself.
d. PAN card(s)
e. Cash / deposit proof for the margin money / down payment. A minimum 15 to 20% of the total cost of the house is expected to be contributed by the buyer/borrower. From financial health perspective; higher the down payment, the better it is - as the loan burden will be lesser.
Documents check list for personal loans
The documents required for Roopkumar for the personal loan for his wife's necklace are not much. Generally, a personal loan will be processed much faster than a housing loan. There are always exceptions to this rule though.
The documents that Roopkumar needs to keep ready are:
1. Income documents as mentioned earlier
2. Loan track from previous /existing loans
3. Address proof
4. ID proof
5. PAN card
Since the personal loan is an unsecured loan, the track from previous loans, the address and ID proof are also important.
Documents check list for credit card
Roger is in a different situation compared with Ramesh and Roopkumar, as his loan is pre-approved in the form of a credit card. He has only one item to check for before going for buying his camera. He only has to check whether he has the credit balance on his card for going ahead with the transaction.
Summary
Each loan has its own list of documents to get the better of it. The housing loan probably is the most demanding of them all. The credit card however is the one that requires the most amount of thought (though it requires practically no documentation to use one).
Roopkumar has, after months ofwindow shopping and magazine browsing, identified the right diamond necklace for his wife on their wedding anniversary. However, the necklace costs a lakh over his budget.
Roger, on a one-week deputation to Singapore from his office in India, sees a magnificent digital camera at a steep discount in a mall. The item was not on his purchase list. But the camera which costs `40,000 on discount will cost nothing less than `65,000 in India. He does not want to miss the opportunity to make a killing on the purchase.
One solution for all
The one solution for all the scenes above is to get a loan. But is getting a loan so easy? Yes, it is. The question is - "Have you taken the right loan?" The right loan takes care of the following things:
1. Choosing the right type of loan
2. The processing time matches your needs
3. The interest rate is competitive
4. The EMI is affordable
How to get the best loan?
Anyone with the right background can get a good loan. However, it requires some planning and preparation. In the three scenarios above, the choice of the loan (the first step) is relatively easy. Ramesh and his wife need to go for a housing loan. Roopkumar can opt for a personal loan and Roger can swipe his card for his camera.
After choosing the loan type, to ensure that the best deal is got, one has to take care of the documentation. The better the document support for processing the loan, the better the loan terms offered by the bank/ financial institution.
Document check list for housing loans
For the Ramesh family, who are looking at their housing loan, the checklist will include the following:
1. Documents Provided by the Seller/Builder
a. Property documents
i. The purchase deed of the builder/ seller
ii. DTP approval for the site
iii. Building approval documents
iv. Draft copy of the sale deed (which is to be registered)
b. Encumbrance certificate
c. Pre-Approved loan form (if any)
2. Documents to be kept ready by Ramesh
a. Tax returns filing documents for Ramesh and Anitha for 2 years.
i. If salaried without other income, the Form 16 provided by the employer will do as the supporting document.
ii. If salaried with other income, too (like rental, share trading, interest from bank deposit, etc) then the supporting document for all will be required.
iii. If income is from business, then the audited tax filing and income calculation documents will be required.
1. Care should be taken here that the filing dates are at least 6 months apart. Two tax filings within a short period will activate warning radars for the loan processing officer, as the intention for the filing would have been to get the loan.
b. Loan Track (if any) from of all the previous / current loans
c. A lawyer opinion on the documents provided by the builder/ seller. Though the bank/lending institution will do their own legal due diligence, it is better to check with a lawyer before the loan processing, as sometimes one may find a legal problem leading to rejecting the property itself.
d. PAN card(s)
e. Cash / deposit proof for the margin money / down payment. A minimum 15 to 20% of the total cost of the house is expected to be contributed by the buyer/borrower. From financial health perspective; higher the down payment, the better it is - as the loan burden will be lesser.
Documents check list for personal loans
The documents required for Roopkumar for the personal loan for his wife's necklace are not much. Generally, a personal loan will be processed much faster than a housing loan. There are always exceptions to this rule though.
The documents that Roopkumar needs to keep ready are:
1. Income documents as mentioned earlier
2. Loan track from previous /existing loans
3. Address proof
4. ID proof
5. PAN card
Since the personal loan is an unsecured loan, the track from previous loans, the address and ID proof are also important.
Documents check list for credit card
Roger is in a different situation compared with Ramesh and Roopkumar, as his loan is pre-approved in the form of a credit card. He has only one item to check for before going for buying his camera. He only has to check whether he has the credit balance on his card for going ahead with the transaction.
Summary
Each loan has its own list of documents to get the better of it. The housing loan probably is the most demanding of them all. The credit card however is the one that requires the most amount of thought (though it requires practically no documentation to use one).
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