By Chaitali Dutta
> Is it a good idea to take an insurance at the time of taking a home loan? What kind of insurance should we take?
– Anand Parthi
As a borrower, it is a good idea to take a vanilla term cover equivalent to the loan amount, on the life of the principal earner of the family. You may opt for a straight-line cover for the period of the loan or go for a reducing balance cover. Additionally, take a natural disaster, terrorism and fire insurance for the structure of your property. This will limit your losses in the event of an earthquake, flood or a fire.
> I am 52 years old and my wife is 50 years. Both of us together earn around Rs 3 lakh a month. We have a flat for which we have cleared the bank loan two years ago. We want to buy a bigger second flat and retain the existing flat also. Will a bank grant us loan and who much amount can they give us?
—B D Desai
You are eligible for a home loan. The loan amount in your case would be just above Rs 1 crore, assuming you continue working for the next 10 years. Your EMI should not exceed Rs 1.5 lakh per month. If you want a larger loan, the bank may consider an expected rental from one of the flats. This extra cash-flow will increase your loan eligibility.
> Five years ago I took an education loan for my son. We repaid the full amount last year. Now he wants to do another course abroad. Can we apply for a fresh education loan again?
—S R Pandit
Yes, your son may apply for another education loan. Since the earlier loan was paid off in time (assuming without default) the credit history will be satisfactory. This will help you in procuring a fresh loan.
> I have taken loan from bank against my property. Now I am unable to make timely EMI payments. Can I settle my loan account? What will be the procedure and what concession would I get?
The only way out is to pay the outstanding amount and clear the loan. You may have to tap other resources to generate the funds. If you do not have alternate resources, you have to ask the bank to sell the property, clear the loan with part of the proceeds and pay you the balance amount.
The writer is founder, AZUKE Personal Finance Advisory (www.azukefinance.com). Send your queries to
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Source: Financial Express