However, the quantum of money you can arrange this way is lower as a loan available against savings instruments varies between 50 and 75 % of the value of the instruments.Īlso, the interest rate charged on a loan against savings instruments is higher than the returns on the instruments. In such circumstances, taking a loan on the savings can be another way to arrange the funds needed. Loans on Savings – Sometimes, it is not wise to liquidate savings due to certain reasons like prematurity charges, higher returns expectations in future etc. However, it is important to keep some savings for contingencies and not exhaust the complete reserve. One should try to collect as much money as possible by liquidating savings. Liquidating savings is an easy way that comes to mind when trying to put together a large sum of money. This means a borrower will have to arrange funds equal to 20 to 25 per cent of the property’s value at the time of availing the home loan on his own. The RBI has increased the margin money requirement in order to impose a check on liberal financing of homes.īorrowers are now required to pay margin money of at least 20 % of the value of the property, which was earlier between 10 and 15 %. Also, the RBI has recently increased the weightage on medium and big ticket home loans (loans above Rs 20 lakhs) by increasing the limit of margin money requirement. Interest rates have gone up across the board over the last couple of quarters as a result of the monetary policy tightening moves by the Reserve Bank of India (RBI). ![]() Therefore, sound financial planning is needed to reap all the benefits available. ![]() Buying a property and funding it through a home loan requires a good amount of planning from a financial perspective as it is a major financial commitment.įinancing a property purchase through a home loan has many benefits.
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