Your Queries: Loans| You may not be able to close car loan before one year

By Chaitali Dutta

I took a car loan two months ago. Now I want to clear the loan but the bank says I cannot pay off the loan before one year. What should I do?
—Amrit Singh
Yes, in an auto loan there is usually a one-year period in which you cannot repay the loan. This clause must be there in your sanction letter. Please check. Park the designated funds in a liquid/ arbitrage mutual fund or a bank FD after checking the interest rates and considering the taxation on it.

I want to pay off my housing loan of Rs 30 lakh for a flat which I booked seven years ago and still have not got possession. The builder has defaulted and now we residents are planning to complete the construction. Please tell me if I am taking the right decision and what will be the tax implication?

—S R Krishnan
I hope you have sought legal recourse to recover your money from the builder. As far as all of the residents coming together to complete the construction is concerned, it is a good idea to make use of your sunk funds. However, do consult a legal entity to draft an agreement between the residents to ensure that going forward things don’t go wrong. I presume you have to pool in money to complete the remaining work.

My loan was sanctioned by an NBFC four months ago. Now it is insisting that I get a guarantor who has a property in the same city, or else it will cancel the loan. What should I do?
—Vivek Mishra
I am not aware of such a rule. This NBFC is trying to arm-twist you. Go to another bank/ NBFC for this loan.

I am planning to buy a property from a secondary sale. The bank is asking for utility bills (electricity and gas) for the flat. But the bills are not in the owner’s name. Why would banks insist on utility bills to sanction home loan?
—Prakash Chandra Sharma
Your bank is sanctioning the loan to you looking at your repayment capacity but it also creates a mortgage on the property financed by them. Therefore, it is critical to see the title of the property before the bank parts with the funds. Utility bills in the owner’s name are usually asked for as additional proof of ownership.

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