By Manish Chaudhari
I took a loan against property three years back. Now, I have some spare money. If I repay the full amount will the bank charge any penalty?
—Sanjay Charan Rana
Usually there are pre-payment charges applicable on loan against property, the same differs from lender to lender. It is spelled out clearly in your sanction letter. If you don’t have them handy, speak to the customer service team of your lender, and they will let you know. Consider the following before making any decision. What are the charges applicable for repaying the full amount versus the future interest to be paid if you were to continue with the loan? Is there any other better utilisation option available for the excess money? Would you have an emergency kitty available if you were to repay the loan fully? An alternate option can also be to part prepay the loan if the loan terms allow that.
I plan to buy a second hand car from Maruti True Value. While it is ready to finance it, should I look at other banks? What are the factors I should look at when applying for the loan?
—Atul Baduni
A second hand car is a smart option, specially coming from formal channels like Maruti True Value where you get warranties. Certainly check out the best options that other banks and NBFCs can give you.Find out the interest rate as well as the Loan to Value (LTV) ratio; i.e., the amount which can be funded, the tenure of loan available, the processing fee and also the repayment features along with loan terms. While applying for a loan keep your KYC documents, the vehicle details like make, model, year of manufacturing and your bank statement along with income papers handy.
Also read: How should you invest your money to build wealth?
I need some money urgently. I have a pre-approved credit card loan of Rs 4 lakh. Should I opt for it?
—R H Sridhar
Ideally, one should explore the least cost option which also provides the right flexibility in repay-ment to ensure your cash flows are not adversely impacted. Check the rate of interest being charged on your credit card for this loan along with fees and charges applicable and consider taking it only if it is competitive. Check the rate of interest offered by other lenders on their websites. Some lenders have a completely online process for personal loans and you may be able to get it quickly.
The writer is president & chief of staff, Poonawalla Fincorp. Send your queries to .