Can’t pay EMIs? Sell asset to close loan

I want to avail a loan against property. Please tell me how much I can borrow on such a mortgage loan. Do all banks charge similar rates of interest?

Borrowers get a certain percentage of the property’s market value — usually around 40 to 60 per cent — as a loan. If you are salaried or self-employed, banks take into account the number of years left for your retirement.

After taking into account your repayment capacity based on your income, savings, and expenses, the bank decides on the loan amo-unt that you are eligible for. There may be some variation from bank to bank on the amount of loan which you can get against your property.

I bought a car in September 2010. But now I am unable to pay the monthly instalment of Rs 7,500. Am I allowed to sell it or return it to the company?
It would be better for you to sell the car in consultation with the bank and prepay your entire loan from the sale proceeds and avoid your credit history from getting affected. If you are not able to pay the car loan instalments, your credit history will show defaults or delays. This will impact your capacity of getting a loan or a credit card in future. The bank can take possession of your car and sell it to recover its dues, if the defaults persist for a long period. If the entire outstanding loan amount is not recovered from such a sale, the bank can also sue you to recovery of the balance amount.

When I was 20 years old, I had bought a term policy for 15 years. Now I am 24 and the policy would end when I am 35 years old. This is really scary. Can I extend the period of my term plan? Should I buy another term plan? Or is it better to buy a whole life plan?

You need life insurance, only if anyone is financially dependent on you. If you don’t have any dependants, you don’t need life insurance. In case you have dependants, we would recommend you to opt for a term insurance with a policy tenure of 30-35 years.

Your present term insurance policy cannot be modified, so you need to buy another policy for the same. So you need to buy a term policy for the full amount and let the old insurance policy expire. You need make sure that you buy the new policy before the old one expires. With the advent of online term insurance, buying a policy has become easier and cheaper. In my opinion, you should buy an online term plan.

Harsh Roongta is the CEO of Apnapaisa.com. You can send in your queries to movingmoney@deccanmail.com [1]