Letters: Borrowing troubles

This refers to “Secure a loan before you can own a home” by Neha Pandey (October 15). In this context, it is pertinent to know whether credit is becoming available to home seekers as required by them. The escalation in the price of land or a flat has made matters worse. Salaried people’s savings are being eaten up by inflation. Consequently, two-income families are becoming the norm. The limit of loan amount depends on one’s repayment capacity. Though the repayment capacity depends on income, age, assets and liabilities, savings habit and so on, the lending agencies rely on income more than any other factor. Practices vary from bank to bank. In many cases, rent saving or tax saving is not considered a factor at all. In the case of flats under construction, viz. flexi plan or construction-linked plan, equated monthly instalments (EMIs) begin after the full disbursement of the loan. Prior to that, pre-EMI interest is charged. In these cases also, an increase in salary between the sanction of loan and full disbursement is not considered. And if one has an existing car loan, he is treated as an untouchable. Calculation of take-home salary is also not uniform.

Since securing a loan is not that easy, uniform practices or parameters may make the experience hassle-free.

Manoj Kumar Jha, Indore