CREDIT CARDS

HDFC offers loans:

• To buy or construct a home.
• To extend or improve your existing home.
• To purchase land from approved agencies to construct a home of your choice.
• To acquire a self-contained flat in an existing or proposed co-operative society, or an apartment owners association.
• To acquire an independent single-family or multi-family bungalow or row house.
  

AMOUNT
You can avail up to a maximum of 85 per cent of the cost of the property, including the cost of the land. HDFC lends up to a maximum of Rs 50,00,000 to an individual.

ELIGIBILTY
Subject to the conditions laid down by HDFC, your repayment capacity, as determined by HDFC, will help decide how much you can borrow. Repayment capacity takes into consideration factors such as

• Income
• Age
• Qualifications
• Number of dependants
• Spouse's income
• Assets and liabilities
• Stability and continuity of occupation
• Savings history

APPLICATION
You can make an application any time after you have decided to acquire/construct a property, even if the property has not been selected, or the construction has not commenced. On receipt of the completed application form with the processing fees, HDFC will consider your application, make enquiries as it deems necessary, and convey its decision to you. Application forms can be collected from your nearest representative.

FEES
A processing fee of 0.8 per cent of the loan amount applied for i.e. Rs 8 per Rs 1000 of the loan applied for, is payable when the application form is submitted to HDFC. This fee is in respect of costs incidental to the application. For example, on a loan of Rs 20,000, the fee would be Rs 160, while on a loan amount of Rs 1,00,000, it would be Rs 800. On sanction of a loan, a loan offer is made to you. On acceptance of the offer, you pay an administrative fee of 1 per cent of the loan sanctioned. You can also pay the processing and administrative fees up front i.e. 1.8 per cent of the loan at the time of submission of the loan application itself.

CHARGES
A commitment charge of 1 per cent per annum on the undrawn amount of the loan commencing six months from the date of the offer of the loan is payable. An early redemption charge of 2 per cent of the amount being prepaid is payable on repayment of a loan ahead of schedule. You can make payments for fees, charges and towards loan repayment by a cheque marked "Payee's account only" drawn on a bank in a city where HDFC has an office, by demand draft (payable at par to HDFC), or by cash.

INTEREST RATE
The current applicable rate of interest in respect of the total loan sanctioned is:

** For loans up to 10 years, ROI 14.5 per cent, and for loans over 10 years, ROI 15 per cent Interest is calculated on annual rests. Principal repayments are credited at the end of HDFC's financial year. The effective rate of interest varies depending on the term of the loan. For example, the effective rate of interest on a loan, for a term of 15 years is 0.37 per cent per annum higher than the corresponding rate of interest indicated above.
While it will be HDFC's endeavour to keep the interest rate constant over the duration of the loan, it reserves the right to vary it prospectively at any time, in response to changes in money market conditions, or if a levy, tax on interest or any other charge or burden is imposed or levied by any government or authority.

DOCUMENTATION
For all applicants:
1. Allotment letter of the co-operative society/association of apartment owners. 2. Copy of approved drawings of proposed construction/purchase/extension. 3. Agreement for sale/sale deed/detailed cost estimate from architect/engineer for the property to be purchased/ constructed/extended/renovated. 4. If you have been in your present employment/business or profession for less than a year, mention details of occupation for previous five years, giving position held, reasons for change, and period of the same. 5. Applicable processing fees. 6. Any other information regarding your repayment capacity that is necessary, and will assist HDFC in appraising the case.

If you are employed: 1. Verification of employment form with only Part I filled in. 2. Latest salary slip/salary certificate showing all deductions. 3. If your job is transferable, permanent address where correspondence relating to the application can be mailed. 4. A letter from your employer, agreeing to deduct the monthly instalment towards repayment of the loan, from your salary. This will expedite the processing of your loan application.

If you are self-employed: 1. Balance sheets and Profit & Loss accounts of the business/profession along with copies of individual income tax returns for the last three years certified by a Chartered Accountant. 2. A note giving information on the nature of your business/profession, form of organisation, clients, suppliers, etc.
Please take photocopies of all documents that are submitted to HDFC (including this application form) for your personal record. Proposed owners of the property, in respect of which you are seeking financial assistance, will have to be co-applicants. However, all co-applicants need not be co-owners.

PAYMENT TERM
You can repay the loan over a maximum period of 15 years. Repayment will not ordinarily extend beyond your age of retirement (if you are employed), or on your reaching 65 years of age, whichever is earlier. However, HDFC will endeavour to determine the repayment period to suit your convenience.

EQUATED MONTHLY INSTALLMENTS
You repay the loan in Equated Monthly Instalments (EMIs) comprising principal and interest. Repayment by way of EMI commences from the month following the month in which you take full disbursement. Pending final disbursement, you pay interest on the portion of the loan disbursed. This interest is called pre-EMI interest, and is payable every month from the date of each disbursement up to the date of commencement of EMI. The size of the monthly instalment comprising principal and interest depends on the quantum of the loan, the interest rate applicable and the term of the loan.

SECURITY
Security for the loan is a first mortgage of the property to be financed, normally by way of deposit of title deeds and/or such other collateral security as may be necessary. Interim security may be required, if the property is under construction. Collateral or interim security could be assignment to HDFC of life insurance policies, the surrender value of which is at least equal to the loan amount, guarantees from sound and solvent guarantors, pledge of shares and such other investments that are acceptable to HDFC. Please do ensure that the title to the property is clear, marketable and free from encumbrance. To elaborate, there should not be any existing mortgage, loan or litigation, which is likely to affect the title to the property adversely.

DISBURSEMENT
You can take disbursement of the loan after the property has been technically appraised, all legal documentation has been completed, and you have invested your own contribution in full. Own contribution is the total cost of the property less HDFC's loan. The loan will be disbursed in full or in suitable instalments (normally not exceeding three in number), taking into account the requirement of funds and progress of construction, as assessed by HDFC, and not necessarily according to a builder's agreement. You are advised, in your own interest, to enter into such agreements with builders whereby payment is dependant upon the progress of work, and not on a time-based schedule. You can also repay the loan ahead of schedule. In such a case, an early redemption charge is payable, which varies from time to time. Currently, an early redemption charge of 2 percent of the amount being prepaid is payable in case you decide to repay the loan in part or full.

FAQ
Q. Do I get a tax benefit on the loan?
Yes. You are eligible for certain tax benefits on principal and interest components of a loan under the Income Tax Act, 1961. As the benefits could vary each year, please check out the current benefits available.
Q. Does the Agreement for Sale have to be registered?
In many states in India, the Agreement for Sale between the builder and purchaser is required to be registered by law. You are advised, in your own interest, to lodge the agreement for registration within four months of the date of the agreement at the office of the Sub-registrar appointed by the state government, under the Indian Registration Act, 1908.
Q. Are there any restrictions on transfer of immovable properties?
In terms of Chapter XXC of the Income Tax Act, 1961, the Central Government has the first option to purchase certain immovable properties exceeding a certain value, and therefore, transactions covered by this chapter can be proceeded with only after complying with the requirements prescribed therein.
Q. Does the property have to be insured?
You will have to ensure that the property is duly and properly insured for fire and other appropriate hazards, as required by HDFC, during the pendency of the loan, and to produce evidence thereof to HDFC, each year and/or whenever called upon to do so. HDFC should be the beneficiary of the insurance policy.
Q. Will HDFC assist me in selecting accommodation of my choice?
Yes, in select cities in India. For information on this service, contact our Property Services Group.
Q. Are these policies subject to change?
Yes. These policies will be reviewed periodically.