Bank finance articles and tips

There are a lot of terms of home loan which borrowers need to have understanding about. They are such words which are mind-teasers for any first time home loan borrower. It is good to have them in your familiarity list.

If you are planning to choose a home loan or housing finance to buy new house for family accommodation or for other housing purposes, then you are to know about some related words of home loan. They are such words which might quizzically put you into certain dilemma. Although they are in abbreviated forms, borrowers experience problems when it comes to deciphering exact meaning of the words. Therefore, before you choose housing finance any further, let’s improve your vocabulary by learning some these words being ascribed below.

LTV and LCR

LTV is the short form of Loan to Value Ratio while LCR stands for Loan To Cost Ratio. They are used by a lot of lenders finance companies when you apply for loan at lender’s office. They are such words which say about maximum amount of the loan that a loan applicant can avail against the total cost of residential property. In other words, these words are used to evaluate the loan amount on the basis of values of the property.
EMI

EMI or equated monthly installments is one of the other important words to know when you apply for home or housing finance. Typically, you come across with emi term when you apply for housing finance. In financial term, this one stands for installment of your principle amount which you are to pay against loan borrowed. The emi includes principle amount and rate of interest over the supposed finance. On the basis of tenure and interest rate, the prospective EMI is taken into account by your lender.

IC

This is short version of word called Incidental Charge. It signifies meaning saying a default borrower, who is not able to repay within the time scheduled, is subject to penalty by the bank. Such charge is a way to compensate cost that a lender bears when it sends collection agent to the borrower’s home address. The cost of the charge is born by borrower not by the lender.

NOC

This is one of the most common words used in home loan procedures. It denotes a meaning of No Objection Certificate. It is used when a borrower wants to avail home loan against the property for construction purpose. If the borrower doesn’t own the property, the bank demands NOC from the concerned authority like housing society, builder, and development authority. Here, the NOC is required from the authority that sells you the property.

PEMI, PF, PPC, PDC

PEMI is called pre-EMI that is requires borrower to pay to his lender after loan is being approved. PF is a short version of Processing Fees which a borrower has to pay in the time of giving application for housing loan. They are mandatory to pay your bank irrespective to your application is approved or rejected by your lender.
PPC or prepayment charge is imposed in the event of you pay your loan before the maturity period comes to an end. Bank imposes prepayment charge considering it loss. PDC or Post Dated Cheque is demanded by Financer Company. The date of issuance of the cheque could range from 1 yr. to 3 yrs as per the demand of your bank or financer.
Apply for SBI home loan and HDFC home loan in India.