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Is your home loan lender cheating you?

May 18, 2009 14:18 IST

Have a query regarding your home loan? Maybe we can help.

Drop us a line and our expert, Harsh Roongta, will answer it.

Got a question for Harsh Roongta? Please write to us at

My wife and I are 50:50 owners in the house constructed with joint home loan from nationalised bank. We are paying the EMIs by depositing cash in the joint savings account in the same bank and the bank automatically debits the amount.

1. Can I avail 68 per cent rebate & my wife 32 per cent on interest paid to save my tax?

2. What will be ratio of tax benefit in respect of principal amount paid? Ravi Kant

Tax benefits can only be available in the ratio of your share in the loan. The same ratio will be applicable to both, the principal and the interest. Please note that you cannot change your proportion year to year.

I am planning to buy a house with my wife. For the same I am going to take a loan for part of the total amount from a bank and a part from my parents. Will the loan taken from my parents be considered for tax benefits? Devasish

Yes, you can also get tax deduction benefits for a home loan taken from your parents. You can get tax benefit only on the interest portion of such a loan. If the house is self-occupied, the total deduction for the interest cannot exceed Rs 1.5 lakh for each individual.

I am a Central govt. officer. My age is 59 years and retirement age is 62 years. I wish to avail loan up to 65 years age (is it possible?). My monthly salary is Rs 75 thousand. How much home loan can I get to purchase a house? I can pay EMI Rs 40,000 pm. Dr. Kohli

Banks do not offer home loans to retired individuals or where the repayment tenure exceeds the age of retirement. For the three years of your service, you can try and apply for a joint loan with spouse or children with stable source of income. You can also apply to HDFC Ltd., which may provide a loan based on your salary for three years and the pension amount thereafter.

I have taken a home loan in ICICI BANK -- Smart Fixed at 9 per cent. The EMI is Rs 7,266 for 5 years, without notice they have changed it to floating, I have BANK Offer letter what can I do? I have given return complaint 4 times to the bank but they have not given any reply.  Ram Prasad

You can lodge an official complaint on the bank's official website. If you do not get a response or get an unsatisfactory response within 2-3 weeks, approach the Banking Ombudsman. Check details on

Home loan comparator

I am a director in a Pvt. Ltd. company based in Chennai. To fund our expansion plans, I have taken a loan against mortgage of my house with Citibank and they call this a home loan.
Total amount borrowed: Rs80 lakhs in 2005
Loan period: 10 years
Pending loan amount (principal + interest): Rs59 lakh
Current interest rate: 14.25 per cent

We would like to transfer this loan to a bank charging lesser interest. Can you suggest a better deal? Citibank is quite expensive and charges an account-handling fee of Rs 75, 000 per year over and above the interest. I am also aware that there is a stiff penalty with Citibank of 4 per cent for prepayment. Raghuvir

Yes, you can explore the option of changing your loan against property lender based on your income and repayment track record. You can check the 'Should I transfer my loan' calculator to assess whether it makes sense to transfer the loan.

You may want to consider the prepayment penalty payable to the existing lender and the processing fee payable to the new lender.

Check the home loan comparator ( to compare offers from various banks.

My name is Rajib (31); I got married in the year 2005 and have a son. My family size is of 6 members. I am looking to buy a new flat. My CTC is around Rs 6.73 lakh per annum. Can you let me know what will be the maximum loan, which I can get, also giving me the details of the EMI? Also can you guide me as to which bank I should approach for a loan without much interest rate?             
Based on the information provided by you, you can get a loan of Rs 19-27 lakh if calculated at an interest rate of 9 per cent for 20 years. You can check the home loan eligibility calculator.

I own a small flat purchased in March 2001, paying EMI of Rs 3,520.  I have booked under-construction 2 BHK flat in July 2008 for Rs 20 lakh. Loan taken from scheduled bank in August 2008, paying EMI of Rs 6,600. Will get possession in November 2009. Now my question is:

a) In order to avail section 54 benefit, should I sell my old flat (purchased in 2001) on or before July 2009 (within one year).

To be on the safe side, it would be ideal if the small flat purchased in March 2001 is sold off before July 31, 2009.

b) When can I claim interest & principal repayment benefit since it is under construction, total interest Rs 9,800 & principal Rs 16,500 paid for financial year 2008-09. What is the ratio or percentage?

You can claim tax benefit on home loan for under-construction property only from the financial year in which the construction is completed.

c) Can I claim entire interest & principal amount paid for financial year 2009-10 since I will get possession in same financial year?


d) Is there any provision in ITR form regarding separate column for interest & principal for two different financial year (as in above case) to be bifurcated.


My age is 34 and my CTC is Rs 6.5 lakh. How much loan can I avail? Presently I am residing on rented house and plan to shift my residence.

Will it impact my home loan prospects because of stability issue? Saravana

Based on the information provided by you, you can get Rs 18-26 lakh as home loan. 

I want to take a housing loan for Rs 8,50,000. Can I get the same? My gross salary is Rs16,000 per month. Please tell me the bank procedure about registration fee, stamping charges, interest rate and monthly EMI. Also tell me, which bank is better for housing loan? Pramod

You are likely to be eligible for a loan around Rs 6-9 lakh based on your income if calculated at an interest rate of 9 per cent for 20 years.

There is nothing like a 'best bank'. Banks offer interest rates based on customer profile and loan requirement. There are several steps in the home loan process.

Get details on the link:

I am 40 years of age and my gross salary is Rs 6.5 lakh. How much home loan can I get to the maximum? Kiran

Based on the information provided by you, you can get a loan of Rs 18-26 lakh as home loan if calculated at an interest rate of 11 per cent for 20 years.

We want to repay our home loan to HDFC bank. Bank is telling us that you can repay home loan but there is service tax on the amount you are going to repay. Please clear this for me if there is any government rule for service tax while repaying home loan. Ashwini

Service tax is only applicable on prepayment charges payable in addition to the principal amount prepaid.

I am in the process to switch over my existing home loan from ICICI Bank to LIC Housing Ltd. My Loan amount was Rs 5.92 lakh before 2 years when I took the home loan from ICICI Bank. Still it is same after paying Rs 6,409 per month as EMI starting from September 2007. At present LICHFL is offering me 8.75 per cent rate of interest on my take over loan from ICICI Bank. Is it the right decision taken by me? Pradeep Mathuria

It is not possible to answer the question without knowing the interest rate payable to ICICI Home Finance and the prepayment charges etc.  You can check the 'Should I transfer my loan' calculator to assess whether it makes sense to transfer the loan.

You may want to consider the prepayment penalty payable to the existing lender and the processing fee payable to the new lender.

Check the home loan comparator ( to compare offers from various banks.

How much loan can I avail for the renovation of my flat? Does such loan come under the category of home loan? Chandra Mani

You can get 40-60 per cent of the cost of renovation as a loan based on your income and prepayment track record. These loans have a shorter tenure and a higher interest rate as compared to a home loan. Tax deduction is available to a limited extent for the interest payable on such a loan but not on the principal amount prepaid. 

I had taken a home loan of Rs 24 lakh for a term of 20 years @ 10.25 percent from a PSB and I am paying Rs 25,000 (EMI) every month. It's been two years now and I have an outstanding of approximately Rs 20 lakh. Now this PSB is charging @ 10.5 per cent. I tried to refinance to another PSB@ 8.75 for which I need to pay a penalty of 2 per cent on the outstanding to my previous PSB. Initially they told me their charges as legal charges (Rs 3,000), processing fee (Rs 2,250), which I have given. They told me that there are no hidden charges. After they had done their formalities, they are now saying that a deviation charge is there (about Rs 1,700) since my mother (government teacher) is a co-applicant and about to retire this year. Hence I have to give this amount. This amount was not told to me before. Now since I have given Rs 5,250 (Rs 3,000 + Rs 2,250) to this second PSB and that 2 per cent (roughly about Rs 40,000) as penalty to my first PSB so I cannot back off, I want to know:

1. Is the deviation charge a genuine charge?

It is not possible to comment on this though it is highly unusual.

2. How can I avoid any further hidden charges?

You should read your loan agreement carefully.

3. Is there any way to know any further hidden charges?

Please read your home loan agreement carefully.

4. Can I take a charge against them?

No comment.

What should be my further plan of action?

It is advisable to go ahead with the transaction as you have already spent a lot of money.

I am a postdoctoral fellow, working in Germany. I am getting stipend Euro 1,700 per month and will be continuing for another two years. Please let me know is there any possibility to avail loan for my qualification and how much I can get? Baskar.

You can get a home loan based on your income if the bank is convinced of the stability of your source of income. You typically get a 10-year loan at an interest rate of 9 per cent per annum for around 3.5 times your annual gross salary counted into Indian rupees.