Introduction

In this article I am writing about the interest rates increase for the home loans in the coming months. It is expected that there will be rise in the interest rates from this year end. This article explains the reason why rates will be increased and the current situation of home loans industry.  If you have any doubts please post it in the comments section. Subscribe to our future articles here.

Home Loans Interest Rates

As we know, the inflation of the country is already in the positive mark and it keeps increasing. It is predicted that home loans interest rates may rise with in next 6-8 weeks of time. It seems it will be on this year end.

When inflation is increasing, RBI will increase the interest rates. It will do that by this year end or early 2010. If you are planning to buy the new houses, please plan it accordingly.

Restriction on Home Loans

Nowadays getting home loans are not easy. Banks are imposing so many restriction to the customers to eligible for the loans. In the recent economic crisis, many people lost jobs and many got reduced their salary. Because of this reasons customers not able to pay the EMI regularly. It leads to the huge loss for the banks.

Previously 40-50% as the payment for the EMI is accepted by the banks. But, now they are not accepting more than 30% as the MI. This will also reduce the loan amount for the customers.

No Tax Exemption for Home Loans from 2011

If you have taken the home loans, you are aware that there is tax exemptions for the principal and interest payment on the home loans. Our govt. is working on the new proposal called as “New Direct Tax Code” which is expected to be implemented from the year 2011. It has lot of changes from the existing tax system. One among them is “Completely Removing the tax exemption for the Home Loans“. The proposal is in draft stage and make have changes. If that happens, it is going to be very difficult to take the home loans.

Summary

I hope this article will be useful to know the future of the home loans and its interest rates. If you have any doubts please post it in the comments section. Thank you for reading this article.

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Looking Back After One Year

We have crossed one year after starting this finance blog. It is last October when I hosted this blog with lot of fear whether I can post it regularly. Today I am happy to see the good growth of this blog and readers interest on the topic.

I love and Respect Readers

This blog receives lot of comments from the readers and I am trying to answer every comments in the blog and if I miss some of the comments unanswered I am sorry for that. There is many readers who are frequently posting the comments and I have good conversation with them.

There may be many readers who are just watching the conversation but not replying with their doubts. The intention of this post is to better know the readers and bring the silent readers to participate in the conversation actively.

Financial Knowledge is Must

When I am talking with my friends and co-workers, it very common that many people don’t have the enough knowledge on the financial planning and they just spend money without any proper planning. They don’t realize that they would have saved more money if they plan properly.

Awareness on financial planning is necessary for every one and it must be learned. Please make this your part time learning and save your hard earned money.

I want to Hear From You

In this post you just need to write in the comments following details:

• What is your Name?
• What is your Occupation?
• What is your Monthly Income?
• What is your Monthly Savings?
• What is your financial goal in the next five years?
• Why you are here?

I need this details to have close relationship with you to answer your questions. I am expecting our readers to actively participate in the discussion. Thank you for making this blog success!!!.

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In this article I will be writing about the feature Super Save and Sweep-In provided by the HDFC bank to its customers. I am writing this post with the details from HDFC bank. Also it is the response for our reader (Siva) posted in ask questions. His question is

HDFC bank offers sweep-in and super-saver facility .. Can you please explain about these .. Thanks Siva

Please read this article to know more about these facilities. If you like this article please subscribe to our articles.

What is Super Saver Accounts?

Super Saver accounts are like opening the Savings Bank and Fixed Deposit account together.  Many people know that when you are opening Fixed Deposit with tenure of 5 years, it is not good to pre-close the whole account for the urgent need of money which may be lesser than the Fixed Deposit account. For that purpose Super Saver Facility helps you to liquidate the money when you need with 2% higher interest rates. The following are the key points concerning Super Saver Facility:

• It is an over draft facility for the Fixed Deposit
• You can get up to 75% of the fixed deposit account as the Over Draft
• The interest rates for the borrowed amount will be 2% higher than the Fixed Deposit interest rates
• You can enable this facility for your Fixed Deposit by visiting the nearest bank branches.

What is Sweep-In Accounts?

Sweep-In facility also help you to utilize the Fixed Deposit, but without taking the overdraft on your fixed deposit account. The following are the key points regarding the Sweep-In facility:

• Linking the Saving Bank account and Fixed Deposit account.
• In case of short fall of amount in the savings account, use the sweep-In facility to with draw money from fixed deposit.
• The same interest rates will be charged for the remaining fixed deposit amount.
• The advantage of this account is you need not get the over draft or close the FD account to fulfill your needs.

Super Saver and Sweep-In Facility offered by HDFC Bank

As I have already mentioned, the sources for this article is taken from the HDFC bank and stats also applicable for the HDFC bank. The rates may be different for the other banks. If you are using the same facility in any other banks, please post it in the comments section.

Summary

I hope this article is very useful for many readers. If you have surplus amount in the savings account, please make it Fixed Deposit and use the sweep-in to fulfill your needs. Enjoy the high interest rates. Thank you for reading this article. If you have any doubts please post it in the comments section.

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Home Loans major HDFC bank announced that it is reducing the home loans rates by 0.50% for the Rs.30 lacs to Rs.50 lacs segment. Now they will offer the loan at 9% interest rates. This will be applicable only to the new customers.

Recently SBI has reduced the home loans rates by 0.50%-0.75% and it forces other banks to reduce the rates. SBI also offeres the loans at 8% interest rates if the amount is below Rs.5 lacs.

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1. A minimum deposit of Rs. 25,000/- is required to open an account and thereafter an Average Quarterly Balance of the same amount has to be maintained.

2. If the AQB in the SavingsMax a/c >= 25,000/- and/or the balance in the FD is >= 100,000/-, no AQB non-maintenance charges will be levied.

3. If the AQB in the SavingsMax a/c falls below 25,000/- and balance in the FD is also below 100,000 the following charges would be applicable:

4. However, if the SavingsMax a/c AQB is <25,000/- but FD balance is >=100,000/- no minimum balance charges will apply.

5. Transaction charges applicable in case the specified AQB is not been maintained in the previous qtr.

6. Free Demand Drafts on HDFC Bank locations, upto a limit of 50,000/- per day at home branch.

7. 50% off on the Locker rental for the 1^st year only.

8. Folio maintenance charges on Demat account free for first year.

Apply Here

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This article lists Top 5 Rules while applying for the home loans. I have already posted many articles explaining the various topic on home loans. This article intend to list the top five rules important for the home loan buyers. Remember these five rules if you are planning to get the new home loans. There may be some important factors which I missed it here, if you have anything in mind please post it in the comments sections. If you like the article subscribe to this blog here.

Top 5 Rules for Home Loans

1. Documents and Processing Fees

Before apply for the home loans, good idea to list the required documents and eligibility criteria in the banks. It is not the same for all the banks, the requirement will be different depend on the banks. Government banks will have more strict eligibility criteria like higher monthly income and the current residential property details. Where as private banks don’t have that many requirements as with public banks. However you have to consult the banks and get ready with all the documents. Insufficient documents may lead to rejection of your loan application.

Documents required for Home Loans

When you are applying for a home loan, the bank will charge you certain amount as the processing fees. That will be included in the total home loans amount. Normally the processing fees differs from each bank like 0.5% – 1.0%. Banks will use the processing fees to verify your documents and all the formalities to complete the loan processing.

Processing Fees for Home Loans

2. Interest Rates and Tenure

Interest rate  is another important factor determining your tenure of the loan. If the rates are high, you will be forced to extend more EMI’s and the loan duration also will be increased. Be knowledgeable on the different types of interest rates like Flat Rate, Floating Rate,etc. The interest rates play the important role in closing the loans easily. For example, if you have chosen the floating rate(EMI will be calculated basis on the current market rate), if the rates are going up then your actual EMI’s also will be extended. It will end up paying for longer than usual.

What is EMI and Pre-EMI?

3. Switching Fees and Foreclosure Charges

If you have taken a loan in a bank for the duration of 25 years. After completing the initial 15 years then there is a significant rate drop by another bank which may benefit you if you have switched your loan to that bank. When you are switching your loan to another bank, it may involve switching fees, at the specific percentage on the outstanding loan amount. It is better to learn the switching fees involved for your bank.

Foreclosure charges are when you are planning to close the loan before the tenure is completed. Bank will charge you certain percentage on outstanding loan amount as the penalty for fore closing the loans. Normally the bank charges 3% t0 5%. It varies depend on the banker.

Switching Home Loans

4. Disbursement Stages

When you apply for the home loans, most of the time banker and builders will have a discussion and process the papers. If you are not aware of the money disbursement, please ask your banker that whether they will be releasing the fund at the beginning or at stages of completion of the project. You have rights to insist them to pay only the part of money if the house is still in the construction phase. Pre-EMI will come into the picture when the partial disbursement happens.

5. Type of Loans

There is many types of home loans available in the market. You cannot predict any future expenses when the home construction is under progress. The existing home loans provide many options like Home Loans Improvement, Home Loans Top Up, etc. to fund your home extention and personal expenses. It is added to the home loans and extend to the EMI’s. Discuss with the banker for more details about the home loans products available with them.

Home Improvement Loans

Home Loans Top Up

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There is another round of fixed deposit rate cuts to be announced soon. May be with in few days of time. As we know the fixed deposit rate reached highest 11.0% p.a. in starting of this year. People utilized this opportunity to invest more money on fixed deposit. Now, it is time for rate cuts. SBI has already reduced the interest rates, and once again there seems to be another round of rate cuts.

Fixed Deposit Rate Cuts

High cost deposit rates hover around 8% to 9.75% per annum, and banks are expected to lower the rates within the next few days, after first slashing lending rates. (SBI announced on Saturday that the next round of rate cuts is imminent.) Some banks and financial institutions have already announced cut in lending rates.

“Customers’ apprehensions about rate cuts are justified in the current scenario,” says V S Reddy, managing director of Lakshmi Vilas Bank. Though banks are under pressure from customers to renew their fixed deposits, they are equally bullish on CASA and are hoping to grow this business while renewing deposits.

Summary

If you have any plan to invest on fixed deposit, please hurry and utilize the better interest rates.

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In this article I will be writing about the home loans and the calculation involved in the interest repayment. In my previous article titled Home Loans and Tax Benefits explains about what are the tax benefits while taking the home loans. But, it doesn’t write much about the interest repayment and the different scenarios while owning the multiple houses. This article intend to teach you how to utilize the interest repayment on home loans when you have many properties and have rented out few houses. I would like to hear feedback from you, Please post it in the comments section. If you like the article, please get free email updates.

Articles on Home Loans

Use our consulting service for Home Loans (JUST Rs.500)

In our blog I have published home loans related articles in the past. It would be nice if you have read those articles to gain more knowledge on the home loans and tax benefits.

1. Home Loans and Tax Benefits
2. Tax Benefits on Home Improvement Loans
3. What is Home Loans Top Up?
4. Information on Home Loans

Home Loans and HRA

Many people confuse that if you have the home loans then you are not eligible for the HRA deduction from the income. That is not the correct opinion, in many case people buy the house and for some reason they will stay in the rented property. In that case they are eligible for the HRA exemption. The exemption of HRA is covered under Section 10 (13A). The following conditions are needed to allow the HRA exemption:

• The rent must be actually paid by assessee.
• The rented property is not owned by the assessee. The section does not enforce any rules if the assessee owns any other property. So, that is irrelevant to the case.
• Principal portion of the home loans will not affect in any way to the HRA or interest payable.

Home Loans and Interest Payment

1. Here I will be writing about the various scenarios involved in interest paid on home loans. There may be scenarios where one person owns many properties with different city. This section will explain you with example of how to calculate the tax benefits on that scenario.
2. If the person self occupied the property, then it is direct deduct from the income. For example a person paid Rs.120000 for interest on home loans. His total income is Rs.400000. Then his taxable income is Rs.400000-Rs.120000=Rs.280000. (Other tax deductions will be added). There is upper limit of Rs.150000 as interest payable if the property is self occupied. The limit is applicable for the person owns multiple home loans for more than one property, if the property is self occupied.
3. If the property is rented out, then the annual value (income as rent) will be calculated for that property. The formula will be like this:Annual Value (Rental Income) – 30% as the standard deduction – Interest Payable on home loans = Income from house property.
4. In the above scenario, income from house property can be negative when the interest payable is more that rent received. In such scenarios the loss will be deducted from the total income. For the rented property there is no limit on the interest payment. For example, the total rent received in particular year is Ra.100000. the same year interest paid on home loans is Rs.300000. Then Rs.200000 (300000-100000) can be deducted from the total income. This calculation is for the rented property.
5. If the property is vacant, not rented out and also not self occupied. The you will have to calculate the rental value based on the market and location of the property. That notional vale will be used for the calculation.
6. There is nothing in the section that affects the exemption of HRA at all. Also, there are no conditions that restrict the availability of deduction of interest based on the assessee’s stay in any other premises.

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Summary

I have written many in depth details about the interest payment on home loans. This would be sufficient for the tax deduction and post your comments if you have any doubts. I will be happy to answer all your questions. If I have missed out any of the points, will come up with another article explaining the home loans and benefits. Thank you for reading the article.

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Introduction

We have reached the end of march 2009, this article will provide the recap on what is happened in March 2009 on Think – Plan – Invest. This is the first article writing about the monthly overview and it will continue from this month. Every month end I will be writing about the overview of all the articles published in the same month. That will give the users to get easy glimpse on all the articles. I would like to hear feedback from you about the monthly overview. You can post it in the comments section. Subscribe to our future articles here. The different topics covered in this month are:

• Home Loans

• Builders in Bangalore

• Tax Planning

• Capital Gains

• Fixed Deposit

Home Loans

I have written many interesting articles about the home loans in this month. I would say the current month gives plenty of knowledge to readers about the home loans and the different type of home loans. The following are more popular articles about the home loans.

Documents required for Home Loans Application

It is one of the important part while you apply for a loan. Without all the documents required for processing the loan, you will not be eligible to apply for home loans. It is time to understand what….

Check list for Home Loans

If you are not aware of all the fees and hidden charges on the home loans, you will have to pay more money that you would have been saved if you analyze the home loans with different….

Submit Original documents for Home Loans

In this blog I will be writing about the submitting original documents to the bank for getting the loan amount. Most people are hesitating to submit the original documents to the banker because of the safety. This blog post explains the legal rules related to submitting the documents.

What is Home Loans Top Up?

The top up loans are god send when you are in the urgent need of money. There is some restrictions for santioning the top up loans. This article will present you the clear idea on top up loans and the tax benefits…

Processing Fees for Home Loans

Customer has to be very careful while reading the instructions on home loans and this article will explore few of the important facts about the processing fees involved in the home loans. I would like to answer…

Tax Benefits on Home Improvement Loans

Many people not aware that you can apply for the loan if you are willing to reconstruct the existing house. More than that you are eligible to claim the…

Insurance Cover for Home Loans

Don’t confuse with the home insurance and the home loans insurance. There is clear difference between home insurance and home loans insurance. Here I will be explaining the reason for the home loans insurance and why one has to choose…

What is EMI and pre-EMI?

Most of the people heard about the EMI, not aware of the pre-EMI and the benefits involved in the pre-EMI. In this article we will look into more details about the pre-EMI and in what situtation pre-EMI can be benefited your…

Switching Your Home Loans to Another Bank

Switching home loans will give you some advantages of saving your money. This is normally done when another bank offers very less interest rates compare to your existing interest rates on the home loans. It….

Builders in Bangalore

Mantri Projects in Bangalore

In this article I have posted few ongoing projects by the Mantri developers in Bangalore . The details presented here is taken from the Mantri’s official website.

DLF’s Westend Heights New Town – Bangalore

DLF brings its new residential project New Town
in Bangalore. DLF offers 3 bedroom apartments with excellent amenities. DLF New Town is a premium residential township with a appending Spanish style of architecture against a backdrop of fabulous gardens. It features an open-layout with buildings being placed in a manner that

Tax Planning

Tax Planning for 2009 – Part 1

How ever the budget is not yet announced, we have to wait till the election is getting over. But, learning some tips for the tax savings is important before submit your tax declarations. If you have not saved anything before forget it and

Capital Gains

Should I pay taxes for capital gains?

Here I mean capital gains is the profit which you are making from selling your fixed assets like land or houses. Most of the people think that the profit from selling the propety doesn’t come under the tax liability. That is

Capital Gains on Agricultural Land

That is only the basics and many scenarios will arise when you are facing it in the real life. In this article I will be writing about the capital gains related to selling the agriculture

Fixed Deposit

Mahindra Finance Fixed Deposit Scheme

t is Mahindra Finance Fixed Deposit scheme.  In my previous article I have written about the Tata Motors Fixed Deposit Scheme. Tata Motors is the first one to come up with this type of scheme, follwed by Mahindra Finance.

Tata Motors Fixed Deposit(FD) Scheme

As we are aware of the fixed deposit with banks, nowadays many corporates started rolloing out the fixed deposit schemes to the public to collect money. The one advantage with this option is they are providing you the highest interest rates compare…

Fixed Deposit for Monthly Income

very penny you spend will be important. The tough times will not be end within another couple of months, it is expected to continue for another few years atleast. If you read everyday newspaper, there is millions lost job and don’t have work todo.

Summary

This article summarize the articles published in March 2009. I have posted here only the popular articles which got more attention. In the next month I will try to cover many different topics like insurance,Tax Planning,etc. Thank you for reading the article. Please post your feedback in the comments section.

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Introduction

In this article I will be writing about the online banking systems in India and the features available with different banks across India. If you look into the modern age of banking , online banks or net banking made things much easier for the people and saves lot of time. The traditional way of standing in the queue and filling up all the forms, now its no hassle for making any transaction with the banks. Every bank has their own features and some banks still not having the more advanced features like transferring money to any banks across India, easy registration for net banking, etc. This article will explore the features with different banks and coming with the series of articles. This is part 1 in the series of article about the Online Banking in India. I would like to hear feedback from the user and your experience on online banking in your bank account. Please post it in the comments section. You can subscribe to our future articles here.

Advantage of Internet Banking Facility

Advantages previously held by large financial institutions have shrunk considerably. The Internet has leveled the playing field and afforded open access to customers in the global marketplace. Internet banking is a cost-effective delivery channel for financial institutions. Consumers are embracing the many benefits of Internet banking. Access to one’s accounts at anytime and from any location via the World Wide Web is a convenience unknown a short time ago. Thus, a bank’s Internet presence transforms from ‘brouchreware’ status to ‘Internet banking’ status once the bank goes through a technology integration effort to enable the customer to access information about his or her specific account relationship. The six primary drivers of Internet banking includes, in order of primacy are:

• Improve customer access
• Facilitate the offering of more services
• Increase customer loyalty
• Attract new customers
• Provide services offered by competitors
• Reduce customer attrition

Banks with Internet Banking

In the current scenario, every bank in India has the internet banking facility. Recently the banks are extending their presence in rural areas to lure more customers and show them the advantages of internet making by educating into the new system. This gives the countries entire population to get the benefit of technology advancement. As I said, still it is evolving and not all the banks provide very advanced features. In our article I will take few leading banks and explain the features they are offering.  Note that, the online banking can be for managing your Savings Accounts, Credit Cards, Fixed Deposit, Insurance, etc. The following are the list of banks and their online website address.

• ICICI Net Banking
• HDFC Net Banking
• SBI Cards
• LIC India
• CitiBank Login

Summary

This article presents only the basic idea on internet banking in India. Also the leading internet banking portals mostly used by the customers. When it comes to the internet banking, internet security on net banking is the challenging problem to be faced by all the major portals. Every customer must aware of the security issues and protect their details from the hackers. In my next article I will be writing about the security issues which normally cheat customers and steal the personal details. Thank you for reading this article. Please post your feedback on the comments section.

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In this article I will be writing about the important documents required for applying the home loans. It is one of the important part while you apply for a loan. Without all the documents required for processing the loan, you will not be eligible to apply for home loans. It is time to understand what are the necessary documents required, if you don’t have that get it ready before applying for a home loans. This article will explain you in detail about the various documents required by the banks. If you have any doubts please post it in the comments section. You can subscribe to our future articles here.

It is depend on the category which you belongs to. Normally banks require the documents for Salaried and Self Employed. Salaried people who are working for another company and have the regular income. They will need to submit the certain set of documents. In the another category, who are doing business and professionals responsible for their earnings has to show the strong proof documents for their income. This article will explain that in details.

also read:

• Learn about home loans
• Top 5 Rules for Home Loans
• Home Loans and Income Tax benefits

Salaried

1. Salary slip/Form 16 A.
2. A photocopy of the first and last pages of Ration card or copy of PAN/Telephone/Electricity bills.
3. A photocopy of Investments (FD Certificates, Shares, any fixed asset etc. or any other documents supporting the financial background of the borrower.
4. A photocopy of LIC policies with the latest premium payment receipts (if any).
5. Photographs (as applicable).
6. A photocopy of bank statement for the last six months.

Self-Employed / Businessmen

1. A brief introduction of Business/Profession.
2. Balance Sheet, Profit and Loss account and statement of income with Income Tax returns for the last 3 years certified by a CA.
3. A photocopy of Advance Tax payments (if applicable).
4. A photocopy of Registration Certificate of establishment under shops and Establishments Act/Factories Act.
5. A photocopy of Registration Certificate for deduction of Profession Tax (if applicable).
6. Bank statements of Current and Saving accounts for the last 6 months.
7. A photocopy of Certificate of Practice(if applicable).
8. A photocopy of any bank loan (if applicable).
9. A photocopy of the first and last pages of the Ration card or a copy of PAN/Telephone/Electricity Bills.
10. A photocopy of LIC policy (if applicable).
11. A photocopy of investments (FD Certificates, Shares, any other fixed asset).

Summary

In this article I have written about the documents necessary to process a home loans application. But, the list may vary depend on the banks and the individual. Some banks does n’t  require many documents of the individual is working for a well known organization. How ever some part of the list will be very common for all the banks. If you have any doubts please post it in the comments section. Thank you for reading the article!!!

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HDFC Bank Home Loans Rate Cuts

Housing Development Finance Corp (HDFC), the largest home loan lender is cutting interest rates on home loans. This comes after it cut rates in mid December by 0.5 per cent. It says it is looking to reduce home loan rates for new borrowers.

HDFC Says, new home loans upto Rs 30 lahk to be available at 9.75 per cent and home loans above Rs 30 lakh to be available at 10.75 per cent. Decision of home loan rate cut is to be formally announced on Monday. In December HDFC had reduced interest rates by 0.5 per cent. For Rs 20 lakh loan interest rate was cut to 10.25 per cent while loans above Rs 20 lakh, rate was cut to 11.25 per cent.

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