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What is a Home Loan?

A Home Loan is an amount of money that a person borrows from a financial institution at a certain rate of interest for a particular number of years (tenure), which is to be paid back in equated monthly instalments (EMI). To cover the risk of the financial institution, the property for which the loan is taken as a security.

What are various types of Home Loans?

There are different types of home loans available in the market. However, at Godrej Capital we provide:

  • Home loans for ready to move-in, under construction and resale homes
  • Balance Transfers (shifting of loan from a different financier to Godrej Capital resulting in savings for the customers)
  • Top-up on existing home loans for renovation or home improvement
  • Loans for land/plot purchase

If you are looking for a home loan, Apply Now and get closer to your dream home.

What home loan variants are offered by Godrej Capital?

Godrej Capital home loans are designed to enable you to buy your dream home. We ensure that, at every step, customer-centricity forms the very core of our business. Our home loan features are reflective of this philosophy. We offer:

  • Rate of interest as low as 7.54% p.a.
  • Instant in-principal sanction
  • Quick and hassle-free disbursal

On offer are special features such as EMI Break & Parallel Funding. The Parallel Funding feature eases the first and most difficult part of the home loan process i.e., down payment for owning a property. At Godrej Capital, you can pay your part on a pro-rata basis, rather than paying all at once and be a step closer to your dream home.

With the EMI Break option, our customers have the option to pause and prioritize their expenditures when their monthly expenses are impacted by other outgoings, such as insurance premiums, holidays, educational fees, to name a few, at pre-agreed timelines.

To better serve our customers, we, at Godrej Capital, continue to innovate our offerings for a hassle-free financing experience. Watch this space for more innovative home loan features.

If you are looking for a home loan, Apply Now and get closer to your dream home.

Please note that specific T&C may apply for product variants. For more details, please contact our customer representative or write into us at  customercare@godrejcapital.com  for answer on specific query.

What is an Under-Construction Property?

An under-construction property refers to a housing unit which is in process of being constructed and would be handed over to the buyer post completion by the developer.

What process does Godrej Capital follow for processing a home loan?

Step 1: Submit your application
The loan application you submit will consist of duly filled loan application form, proof of income, proof of identity and address.
Step 2: Application evaluation and loan sanction
Upon submission, our internal team will evaluate your application and will process it further for sanctioning the loan.
Step 3: Property valuation
Once the property papers are shared, legal and technical valuation of the property will be done to check if all is in order and approve the disbursal of the loan. This step gets easier when a property is purchased from an approved project.
Step 4: Loan Disbursal
Post the approval, signing the loan agreement will take place, leading to disbursal of the loan.

What is credit evaluation?

Usually, a financial institution undertakes a certain amount of risk while lending money to borrowers. Thus, for prudent lending, the institution gauges the repayment capacity of the borrowers on several parameters such as his/her savings, age, income, nature of employment, qualifications, existing loans etc. This process is known as credit evaluation and determines the loan eligibility comprising of the loan amount, tenure of the loan and the rate of interest.

What is property valuation?

A financial institution empanels agencies for objective valuation of the property it takes against the loan as a security. The valuation is based on the property’s age, usage, legal documentation, condition as well as its geographical location. Here, market conditions also come into play, including the demand of the property in the area.

What is the process to register my property?

Registration of a property includes stamping and paying of registration charges, which may vary from state to state, for a sale deed and getting it recorded at the sub-registrar's office of the concerned jurisdictional area.

Is it necessary to have a co-applicant for a home loan?

No, it is not necessary to have a co-applicant for a home loan application however having one increases the eligibility. In case of sole ownership of the property, any member of your immediate family can be a co-applicant. If someone is the co-owner of the property, it is necessary that he/she is also the co-applicant for the home loan. Lastly, if joint income is considered for eligibility, then the second person needs to come in as a co-applicant.

What is NACH mandate?

National Automated Clearing House (NACH) is a centralized structure created to make payments more accessible and cost-effective. It offers a fast and efficient clearing platform. The NACH debit mandate is used by Godrej Capital to automatically deduct monthly instalments from your bank account for the loan availed.

How to cancel your NACH mandate?

There are two ways to cancel NACH mandate.

  • You can login to the customer portal and request to cancel the mandate through the ‘Write to Us’ section.
  • You can also send an email to customercare@godrejcapital.com through your registered email ID or call our Customer Care at +91 22 68815555 through your registered mobile number and place a request for NACH mandate cancellation.

Please note that you need to mention the Loan Account Number (LAN) in the request, and our team will connect with you within 48 hrs.

What is processing fee?

Processing fee is a one-time charge to be paid by the borrower to the financial institution to cover the cost incurred to process a loan application.

What is a sanction letter?

A sanction letter is issued by a financial institution post evaluation of an applicant’s creditworthiness and other details such as KYC etc. This letter is a proof of eligibility from the financial institution and mentions crucial loan details including maximum loan amount, maximum tenure, rate of interest, EMI amount and special conditions if any. A sanction letter with the above information is valid for a specified period.

What is Power of Attorney?

Power of Attorney (POA) is legal authorization for a designated person to make decision on behalf of another person’s assets, finances, and real estate properties. There are two types of POAs.

  • First, General POA where a property owner confers ‘general’ rights.
    These rights include but are not limited to sell, lease, sub-lease etc.
  • Second, Special POA where only a specific right is given by the owner to the chosen person.
What is Equated Monthly Instalment (EMI)?

Equated Monthly Instalment or EMI is the amount of money a borrower pays back to a financial institution monthly towards the loan availed. It comprises of two components, namely, the principal and the interest. So, each month, the borrower pays back a portion of the loan amount as principal and a certain amount of interest. At Godrej Capital, you can avail product variants where we give you a break from your EMIs when you need it the most. Read more here.

What is Pre-EMI?

Pre-EMI is the interest amount paid by the borrower till the time final disbursement is pending and EMI is initiated. It is the interest on the amount of the loan disbursed and is payable every month from the date of each disbursement up to the date of commencement of the EMI. Pre-EMI is mostly applicable in cases where Under Construction property is being purchased on loan.

What is Repayment Tenure?

The period (months or years) for which a financial institution lends the money to a borrower. The tenure may be different from borrower to borrower.
At Godrej Capital, home loans are offered at longer tenures, i.e., up to 30 years.

What is Rate of Interest?

The rate of interest is the percentage of principal amount the financial institution charged a borrower for the money. It is paid over and above the principal amount borrowed. There are two types of rates of interest.

  • Floating rate of interest is where the rate fluctuates with an index. At Godrej Capital, all floating rate of interest loans are pegged to the Godrej Capital Prime Lending Rate (GCPLR). The rate varies over the repayment tenure of the loan.
  • Fixed rate of interest remains constant for the entire repayment tenure of the loan.
What is a Collateral?

Collateral is an asset (the property, for home loans) a financial institution accepts and keep as a security for a loan it extends till the amount is fully repaid. This helps the financial institution to cover its risks.

What is an APF?

APF stands for Approved Project Funding.
Godrej Capital, identifies projects by certain developers and builders, and evaluates basis the properties’ legal and technical evaluation. If a project qualifies the necessary requirements, it’s included in the APF master of Godrej Capital.
The TAT(turnaround time) for a loan disbursal, is lesser, where a project is already an APF and the loan processing is much simpler.

What is Loan to Value Ratio?

Loan to Value (LTV) is the amount of loan divided by the total value of the property and is represented in percentage. Loan value of INR 75 lakhs for a property worth INR 1 Crore would mean 75% LTV.

What is Own Contribution (OCR)?

Own Contribution or OCR is the same as down payment. It is also referred to as ‘margin’ money as it is the difference between the loan amount a financial institution offers and the total value of the property. At Godrej Capital, we offer easy down payment options such as Parallel Funding, where a borrower doesn’t get burdened and pays the down payment in parts on pro-rata basis.

What is property registration?

The documents relating to transfer, sale, lease or any other form of disposal of an immovable property. Registration is compulsory by law for all properties under Section 17 of the Indian Registrations Act, 1908. Once a property has been registered lawfully, it means that the person in whose favour the property has been registered, is the lawful owner of the premises and is fully responsible for it in all respects.

What is loan disbursement?

Disbursement means paying out the loan amount to the borrower or the builder from which the borrower has bought the property. The disbursement can be either in full amount or in tranches, depending on the type of home financed (example: tranches are common for under construction properties) and the terms agreed between the financial institution and the borrower.

What is Schedule of Charges?

Schedule of charges is the list of charges and its corresponding amount levied by a financial institution over the duration of the loan, if applicable. For Godrej Capital, refer to the schedule of charges here.

What is a welcome letter?

A welcome letter is sent by a financial institution once a customer is fully onboarded. It consists of the most important terms and conditions (MITC), Repayment Schedule, Schedule of Charges and other important loan details.

What is Statement of Account?

A Statement of Account (SOA) is a summary of a home loan account provided by the lender. It details out all the transactions, outstanding balance due, rate of interest charged on the outstanding balance and any fees/charges incurred. However, the outstanding balance as reflected in SOA may not be the amount which you have to pay to close the account. To know the foreclosure / pre-closure amount contact  +91 22 68815555.

What is MITC?

MITC or Most Important Terms and Conditions details out the loan details, repayment schedule, Schedule of Charges, and any other relevant details of a loan account which a borrower must know. It is available on both, website, and customer portal.

What is Repayment Schedule?

Repayment schedule is a table of detailed loan payments for every period, showing the amount of principal and interest for each payment until the loan is fully paid off.

What is an Interest Certificate?

Interest Certificate is a document issued by the lender which details out the bifurcation of the principal and interest amount paid towards a home loan account in a particular financial year.

What is a No Objection Certificate?

No Objection Certificate or NOC is a document that states that you have cleared all outstanding loan dues and paid the EMIs against the amount borrowed. This is issued by the lender post the closure of the loan account. Please note that till the NOC is not issued, you may have liability towards your lender.

What are the tax benefits on home loans?

As per Section 80C of the Income Tax Act, you can avail deductions up to INR 1.50 lakh on the principal amount repaid annually. Under Section 24 of the IT Act, taxpayers are also eligible for benefits up to INR 2 lakh on the interest repaid against a home loan annually. Under section 80EE, first time home buyers can claim an additional deduction of INR 50,000 for value of property up to INR 50 lakh and loan taken up to INR 35 lakh.

What are the tax benefits on home loan in the pre-EMI period?

The Income Tax law provides a claim for pre-EMI interest. It is called the pre-construction interest, which is as a deduction in five equal instalments, starting from the year in which the property is acquired, or the construction is completed. One is eligible to claim this benefit over and above the deduction on the house property income. However, the maximum eligibility remains capped at INR 2 lakh.

Can stamp duty and registration charges be claimed for tax benefits?

Yes, these expenses can be claimed under Section 80C but only in the year in which the expenses are incurred and within the overall limit of INR 1.5 lakh.

What are bounce charges?

Bounce charges are incurred if the EMIs are not paid by the borrower on the due date. For more details and updated information, please refer to Schedule of Charges.

What are late payment charges?

Late payment charges, also referred to as ‘penal charges’ are the charges incurred on the late payment of the outstanding dues in case of EMI bounce, by the borrower. For more details and updated information, please refer to Schedule of Charges.

What are swap charges?

Swap charges are incurred by the borrower for changing the repayment instrument or change in the bank account for NACH Mandates. For more details and updated information, please refer to Schedule of Charges.

What are recovery charges?

Recovery charges are levied by the lender for any expense incurred on collection of overdue from the borrowers. For more details and updated information, please refer to Schedule of Charges.

What is foreclosure or pre-payment charge?

These are the charges a borrower incurs for partly paying or closing the loan ahead of its full loan term. For more details and updated information, please refer to Schedule of Charges.

What are stamp duty / registration charge?

These are the charges paid by the customer as per the State laws to register finance documents. For more details and updated information, please refer to Schedule of Charges.

What is CERSAI or CKYC charges?

These are the charges for registering a charge on the property submitted as collateral and for uploading KYC details on CKYC. For more details and updated information, please refer to Schedule of Charges.

What are Legal or SARFAESI charges?

These are the charges incurred by the company for any legal action against the borrower(s) in case of default. For more details and updated information, please refer to Schedule of Charges.

Is it mandatory for a customer to obtain insurance?

No, it is not mandatory to obtain insurance however insurance is a voluntary risk mitigation device that helps customers in multiple ways, such as securing the asset, helping in paying off the loan liability in an unlikely event.

Will Godrej Capital ensure that the benefits and details of insurance contract are provided to the customers?

Insurance contract is between the insurer and the customer, and the lending company plays a limited role here. It is the insurer’s responsibility to provide the details and benefits to the customers.

What are the benefits of a loan linked insurance?

The loan insurance provides coverage against unforeseen events such as death, disability, hospitalization and/or diagnosis of critical ailments whereby the insurer can repay the loan liability through insurance.

What are the benefits of Credit-Life Insurance?

Credit-life insurance provides cover against natural, accidental, and unnatural deaths. It also includes coverage for death due to Covid-19 and can be extended to co-borrowers. Customers can also avail the benefit of Section 80C income tax deduction with this insurance.

What are the benefits of Survival-Benefit Plan?

Survival-Benefit Plan is an insurance for critical illness and provides additional cover for medical emergencies like heart attack, stroke, or cancer. More often than not, these emergencies or illnesses incur heavy medical cost, and these policies pay out cash to help cover those overruns where traditional health insurance may fall short. Though these policies are priced at a relatively low cost, the emergencies covered are generally limited to a few.

What are the benefits of health insurance?

Health insurance aims to provide coverage against illness, accidents, surgery, and hospitalization. In addition to providing financial security, one can also avail tax benefits under Section 80D.

What are the benefits of property insurance?

Property insurance secures property for which the loan has been availed, ensuring the security of valuables within the house. This insurance is applicable for a fully constructed property wherein the customer has possession of the property. The claim amount is the reinstatement value of the property.