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

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

A Power of Attorney allows a person to grant another person the right to make decisions regarding the person's assets, finances and real estate properties.

There are two types of power of attorney.

First, the 'General Power of Attorney' where a property owner confers 'general' rights. The rights include but are not limited to sell, lease, sub-lease etc.

Second, is the 'Special Power of Attorney' wherein only a specific right is given by the owner to the chosen person.

The EMI is the amount of money a borrower pays back to a financial institution on a monthly basis towards the loan availed.

It comprises of 2 components – the principal and the interest. So with every EMI, the borrower pays back a portion of the loan amount as principle and a certain amount of interest. The EMI amount remains constant and by the end of the tenure, the borrower has paid back both principal and interest amount in full.

The EMI is the amount of money a borrower pays back to a financial institution on a monthly basis towards the loan availed. It comprises of 2 components – the principal and the interest. So with every EMI, the borrower pays back a portion of the loan amount as principle and a certain amount of interest.

The EMI amount remains constant and by the end of the tenure, the borrower has paid back both principal and interest amount in full. At Godrej Housing Finance, you can avail product variants where we give you a break from your EMI when you need it the most. Read more here.

Pre-EMI is the interest paid by the borrower when the final disbursement is pending. It is the interest on the portion of the loan disbursed already and is payable every month from the date of each disbursement up to the date of commencement of the EMI, which is after the loan is disbursed in full. Pre-EMI is mostly applicable in an Under Construction property/Plot + Construction loans during the construction stage being purchased on loan

The time period (in months or years) for which a financial institution lends the money to a borrower. The tenure is basis arrived at the credit worthiness of the borrower and may be different from borrower to borrower

At Godrej Housing Finance, Plot + Construction loans come for tenures up to 15 years.

The rate of interest is the percentage of principal charged by a financial institution from its borrower for the money lent. It is paid over and above the principal amount borrowed.

There are 2 types of rate of interests

• Floating Rate of Interest – The rate moves up and down with an index, at Godrej Housing Finance, all floating rate of interest loans are pegged to GHF PLR – Godrej Housing Finance Prime Lending Rate. The rate varies over the repayment tenure of the loan
• Fixed-Rate of Interest – The rate remains the same for the entire repayment tenure of the loan.

GHPLR is the benchmark interest rate set by Godrej Housing Finance for giving out loans. The floating rate changes are in line with the changes in the GHPLR.

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

APF stands for Approved Project Funding.

Godrej Housing Finance 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 Housing Finance.

The TAT(turn around time) for a loan disbursal, is lesser, where a project is already an APF and the loan processing is much simpler

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

Own Contribution or OCR is the same as a down payment. It is the difference between the loan amount Godrej Housing Finance (or any financial institution) will provide and the total value of the property.

At Godrej Housing Finance, we make OCR a breeze with Easy Down payment options we call Parallel Funding, where a borrower doesn’t get burdened and pays the down payment in parts on a pro-rata basis. This enables the borrower to buy his/her dream home sooner than he/she normally would.

OCR and down payment are also referred to as ‘Margin’ money.

The documents relating to transfer, sale, lease or any other form of disposal of 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.

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

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

Statement of Account for a loan details out all the transactions completed in a particular loan account date by date. It also shows the outstanding balance due, the interest rate charged on that outstanding balance and any fees/charges incurred.

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.

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

An Interest Certificate is a legal 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. The same is used for taxation purposes.

The NOC, or No Objection Certificate, is a legal document that states that you have paid all the EMIs and cleared all other outstanding loan dues and is issued by the company post the closure of the loan account

Bounce charges are incurred if the EMI is not paid by the borrower on the due date.

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.

Swap charges are incurred by the borrower for changing the repayment instrument or change in the bank account for NACH Mandates.

Recovery charges are levied by the Company for any expenses incurred on collection of overdue from the borrowers

Foreclosure or prepayment charges are the charges a borrower incurs for closing the loan ahead of its full loan term. In case of Individual loans with floating rates, there are no foreclosure or prepayment charges. For Individual loans with fixed rates, there are no foreclosure or prepayment charges if the payment is through own source of funds. However, if the loan is closed through other financier, then charges will be applicable as per the Schedule of Charges by the lender.

For all Non-Individual loans, foreclosure, prepayment charges are as per the Schedule of Charges shared by the lender.

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.

The insurance contract is between the Insurer and the customers. The company plays a limited role in facilitating the insurance contract between customers and Insurers. It will be the Insurer's responsibility to provide details and benefits to the customers.

Loan-linked Insurance covers a large amount of the loan liability. In any unforeseen circumstances like death, disability, hospitalization, and diagnosis of critical ailments, the Insurer can repay the loan liability through Insurance.

Credit-Life Insurance provides death cover for natural, accidental, and unnatural cause 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 80-C Income Tax deduction

Survival-Benefit Plan is for critical illness insurance and provides additional cover for medical emergencies like heart attack, stroke, or cancer. Because these emergencies or illnesses often incur greater than average medical costs, these policies pay out cash to help cover those overruns where traditional health insurance may fall short. These policies come at a relatively low cost. However, the instances that they will cover are generally limited to a few illnesses or emergencies.

Health insurance aims to provide a defence against the hardship caused due to lack of income because of (a) Disease, (b) Accident, (c) Surgery and (d) hospitalization.

Property Insurance secures the property for which the loan has been availed; ensures the security of valuables within the house. It is applicable for entirely constructed property wherein the customer has possession of the property. The Claim amount is the reinstatement value of the property.