Yesterday i was watching Movie “Fashion”. In the movie, Priyanka Chopra signed agreement with her agency “Panache” without reading the same but when she was in trouble, Agency quoted clause from agreement which put her in spot. She regretted signing the agreement without going through it. Immediately, i recalled that even i have also signed my Home Loan Agreement without going through it. Though i read rest all documents but some how i missed most important of all i.e. Home Loan Agreement. I left the movie in between and decided to read my Home Loan Agreement thoroughly. Though my Home Loan has nothing to do with movie “Fashion” but from movie i got an important message that we should read each & every word of any legal document before signing. Now you must be thinking, if we read then also Bank is not going to change their standard Loan agreement based on our objection…Very true, but if we know all clauses then we are better prepared for any eventuality (God Forbids)
When i took Home Loan, the process was so hectic and tiring that i signed almost hundred times but i made a point to retain a copy of each and every document, i signed. I can bet that 99.9% people have not read below the dotted line (including me) before signing. At the same time i would like to add that if u read complete document then you will never be able to avail Home Loan. I am not scaring you but while availing Loan, we sign & agree for terms and conditions which are too stringent to follow. I am listing down 11 clauses which we don’t know or we should know about Home Loan. I am not sure how many of us follow or know about the same but since we have signed on legal agreement therefore if we are not following then we are liable to be prosecuted by Lender
1. Borrower has to send his statement of Income every year to Lender i.e. Institution or Bank from which you have availed loan like SBI, HDFC, Axis etc.
2. If Borrower retire or resign from the employment or if his service is terminated by employer or if Borrower retire/resign under Voluntary Retirement Scheme then whatever amount Borrower will receive from Employer as a part of settlement or benefit, Borrower has to 1st settle the Entire Loan Outstanding from Amount received. Post settling the complete Loan, Borrower can use Balance Amount for personal use…In case amount received is not sufficient to settle the Loan amount, the unpaid amount will be settled by Borrower in manner decided by Lender at its sole discretion but entire amount received has to be paid first to settle the loan.
3. If Borrower change his employment then he need to inform lender within 7 days of change.
4. It is mandatory to insure property against all risks such as earthquakes, fire, flood, Explosion etc during the Loan period. Let me clarify that i am not talking about Loan Insurance but Insurance of Structure i.e. Home/Property Insurance. Best part is Lender should be made the Sole Beneficiary under such policy.
5. During Loan Period, if u make any alterations or additions in Property then u need to inform the Lender
6. If u put ur property on rent or if there is change in user of property during Loan period then it is necessary to inform Lender.
7. During Loan Period, Lender has free access to ur property for inspection or supervision without any permission from ur end.
8. Borrower cannot Sell, Let out or Lease the Property without approval of Lender
9. You cannot Leave India for Employment or Business purpose without fully repaying the Loan Amount
10. Lender can change BPLR or Base rate at its own discretion i.e. No scientific way to fix the same. This is biggest loop hole in the system.
11. Lender has all rights, at its own discretion to change your EMI & Loan Tenure therefore you might get shock in terms of increased EMI.
As a general thumb rule, it is advisable to go through all the documents which we sign to avoid any future shocks…Life is uncertain so as your Lender :)
Copyright © 2011-2012 Nitin Bhatia. All Rights Reserved.
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