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Established in the year 1924, Karnataka Bank is a commercial bank with an ‘A’ class. It is one of the leading financial services providers in India with more than 6 million happy customers who availed products such as insurance, deposits, loans, especially home loans. It has many choices of housing loan plans.
Documents for Karnataka Bank Home Loan
1. A copy of ID proof and address proof.
2. Salaried borrowers: income documents like income tax return statements, bank account statements, form-16, and salary slips.
3. The bank can demand property related documents.
Eligibility for Karnataka Bank Home Loans
1. For salaried applicant, the age limit is minimum 21 years and the person must be in a confirmed position with the current employer and completed at least 3 years of employment.
2. Indian residents can apply. The gross monthly income of salaried applicants should be Rs. 6000-Rs. 8000 the minimum.
3. 21 years is the least age requirement for professionals, self-employed, and businessmen. Loan tenure plus the age of the applicant must not be greater than 70 years.
4. Professionals, self-employed and businessmen applying for the Karnataka bank home loan must have been in business for at least 3 years with Rs. 60,000 as the minimum gross annual income.
Features of Karnataka Bank Home Loan
- One can take home loan from this bank for purchase or construction of a house or a flat. The loan can be extended for repair, remodelling, renovation of an existing property.
- Finance allowed as to the minimum from any of the conditions: Rs 50 lakhs, for salaried it is 60 times of their last home monthly salary, for trader, professionals, self-employed applicants it is 5 times their latest yearly net income in addition to the depreciation as per profit and loss statement.
- It is possible to get home loan amount up to 40% of the property’s market value or Rs. 10 lakh, and whichever is lower is provided as funding for repairs and renovation.
- Borrowers can get a repayment holiday until 18 months.
- As security, the applicant must present guarantee of spouse if there is no third-party solvent guarantor and the mortgage of the property that is intended for renovation, remodelling, purchase or construction.
- The housing loan application is processed within 15 working days if all the documents submitted are correct.
Complete Details of Home Loan Karnataka Bank
|Interest Rates||9.50% – 9.70%|
|Margin||20% to 30%|
|Maximum Borrowing||Up to Rs.50 lakh|
|Loan Tenure||Up to 15 years|
|Lowest EMI||Rs. 1044.22 per lakh|
|CIBIL Score Required||Minimum 750|
|Processing Fees||0.25% with a minimum of Rs 250|
|Interest Rate (Floating)||9% – 9.40%|
|Guarantor Requirement||Guarantor required|
|Penalty on missed monthly instalment||2% of the unpaid amount|
Karnataka Bank Different Housing Loan Plan Interest Rates
|Scheme||Finance Amount||Interest Rates|
|Apna Ghar & Elite Home Loans||Borrow up to Rs.300 Lacs||9.00 % – 9.40%|
|Above Rs.300 Lacs to Rs.500 lacs||9.00 % – 9.40%|
|Home Comfort Loans||Tenure 60 months: 11.20 %
|Tenure above 60 months: 11.45 %
Karnataka Bank Home Loan MCLR Rate
|Loan Tenure||MCLR Rate|
|1 month||8.45 %|
|3 months||8.55 %|
|6 months||8.70 %|
|1 year||8.90 %|
How to close Karnataka Bank home loan through Creditseva?
Closing and settling housing loan mean two things for the borrower. Firstly, he/she does not have to pay any instalments on the concerned property to the bank anymore. Secondly, the bank releases its hold over the property by providing a proof or testament of the same. Now, the person has complete control over the property.
For a quick and accurate way to close a home loan, Creditseva informs you via a step-by-step guide. We request you to not follow any other recommended steps until not advised by a financial advisor. For home loan closure through Creditseva, you need to sign up or sign into your user account and follow the subsequent steps by our financial experts.
- Closure through pre payment of Loan
- Closure through completion of loan tenure
- Closure on account of bad loan
- Closure through settlement of loan.
Karnataka Bank Home Loan Closure by PrePayment
The borrower can prepay housing loan be following the below mentioned steps:
Step 1: Personal visit
- It is not mandatory to visit branch where the loan was sanctioned
- Visit the nearest or any branch of Karnataka Bank
- Prefer to visit the bank on a weekday over a weekend
Step 2: Reach representative
- There are certain formalities and checks to be done.
- The procedure thus could be time consuming.
- Bank representative will help with all the discussions.
Step 3: Disclosure form
- A disclosure form handed by the bank representative has to be filled
- Here, mention sources of all income through for partial or full prepayment
- The exact amount may be held but approximates would be provided.
Step 4: Cheque for pre-payment
- Now calculate the outstanding amount to prepay.
- Mark a cheque to Karnataka Bank for the exact prepayment amount.
Step 5: Receipt of pre payment
- Prepayment receipt is handed to borrower.
- Once the process complete, it means the home loan is paid in complete.
Step 6: Amortization sheet
- The borrower must take the amortization sheet.
- The sheet can be sent on request to email id of the borrower.
- The same can be downloaded from official website of Karnataka Bank.
- The amortization sheer consists of EMI details paid to date.
Step 7: Collection of property deed
- After prepayment release, the Karnataka bank received property deed file in courier from the registrar.
- The couriering process completes in 10 to 15 days.
- If the property deed is damaged in the transit, the bank will not bear responsibility for it.
- To avoid any damage to property deed file, it is advisable to collect the document personally.
Karnataka Bank Home Loan Closure by Tenure Completion
When borrower follows all the installment payment meticulously, he/she can initiate housing loan closure after the payment of the last EMI:
- Write and post a loan closure application to a nearby Karnataka home loan bank branch.
- For quicker processing, attach the proof of last EMI payment along the application.
Karnataka Bank Home Loan Closure on Account of Bad Loan
Bad loan scenario arises when the borrower cannot repay the amount due to being bankrupt. The status of such home loan in the account of the bank becomes ‘Default’ until it is not written off. When written off, such loans become bad loans.
- Write and post a home loan closure application to the nearest branch of Karnataka bank
- The borrower can also submit the written application right at the Karnataka home loan branch.
The process that follows:
1. The borrower’s status on home loan requires a change from ‘Default’ to ‘Settled’.
2. SOA (Statement of Account) update: This consists of details to transactions in bank account of the borrower and is in form of passbook or statement-print out. It lists down deposits, withdrawals and balances. It shall also reflect the bad home loan settlement as written off.
3. CIBIL Score Update: The borrower’s CIBIL score is affected on bad loan closure. If timely repayments of installments were maintained then the credit score recovers gradually.
Closure through Settlement of Karnataka Bank Home Loan
It is one of the popular ways of closing home loan wherein regular settlement of the housing loan is meted due to dues not being paid off.
- The bank will provide 3 months to borrower for repayment recoverability.
- Even then if the amount is not paid, the home loan account resumes the status ‘NPA’ (non performing asset).
- The status of borrower becomes ‘Defaulter’ until he/she does not settle the loan.
- When the loan is settled it may cause negative impact on CIBIL score for a short time after when the same recovers if timely repayments were maintained earlier.
- Submit a written application for closing home loan either by post to the nearest bank branch or personally visit the bank for the same.
The process that follows:
1. SOA update: Until the borrower does not repay, the home loan settlement will show up here. Repayment options are mentioned below:
- Restructuring of loan
- Prepayment of rest of loan
- Reimbursement of the investment
2. Offer letter: On settlement of housing loan, ‘settled’ is the status in bank account for the loan.
3. CIBIL score update: Full closure of loan results from settlement of home loan and that affects the credit score of borrower. With time, the receipt of credit score will normalize.
Sample Letter for Closure of Karnataka Home Loan
The Bank Manager
[Address of the branch where loan closure was done]
Subject: Request for Home Loan Closure
I, [Your name] under my account number (………) had been issues a home loan, which has no more dues on it left and successfully repaid. I have submitted the proof of last EMI payment. Thus, I kindly request you to close the home loan and provide me with acknowledgement letter authorizing that the loan has been closed successfully. Please provide me the following documents with the acknowledgement letter:
- Original Property Documents
- Loan closure certificate or NOC/NDC
- CIBIL score update
Thanking you for your help,
Karnataka Home Loan Closure- Important Documents to Receive
Below mentioned are the documents the borrower must receive after writing letter or application for home loan closure to the bank:
1. Property Deed
The borrower should collect the original property deed file and not its copies. The same contains possession letter, original sale deed, POA, cancelled cheques, and payment receives. These are crucial at the time of property selling in future or applying for loan on the property.
2. Loan Closure Certificate (LOC) or No Dues Certificate (NDC) No Objection Certificate (NOC)
These stated documents are the actual proof that the concerned property is not under any debt and not under the hold of the bank. It also means that the loan amount in full with principal amount and interest are now paid off. The details presented here are mentioned in the NOC letter by bank.
3. CIBIL Score
On every 28th of the month, a person’s CIBIL score updates. As for the borrower, the payment details of the loan are shared by the bank with CIBIL, and closure of loan will affect the credit score when the CIBIL report is updated. If the housing loan has been closed by any other method other than the tenure completion, then the creditworthiness of the borrower may reduce.
The regularity of the payment may stabilize the credit score while missing or delaying any will weaken the CIBIL score. In case it is the latter, then prospects for obtaining any other new loan will reduce for the next 6 months.
4. Memorandum of Deposit
MOD or memorandum of deposit is something that the borrower already has and is provided by the Karnataka bank at the start of the housing loan.
5. Promissory Note & thank you note.
Precautions after Clearing of Home Loan Closure
Following the borrower’s home loan closure and clearance by the bank, he/she must perform the below mentioned steps:
The borrower has to collect the following documents (original copies) from the bank:
- Original title and deed document
- Legal Scrutiny Report that all dues have been cleared
- Original or certified copy of title deed of previous owner
- Statement of loan account reflecting all details of loan and interest repayments
- Approved layout and map issued by governmental authority or similar
- Original property tax paid receipts or copies if possible.
Removal of Lien
A lien exists on property when the bank mandates that the borrower cannot sell the house/property until the loan is closed or settled. Once the home loan closures happen, the borrower needs to get the lien removed. A lien is a transaction that is registered by the registrar of properties done against the property. The Karnataka bank representative will help in the procedure of removing lien from the property.
1. Encumbrance certificate (EC)
- It details the transactions on the property name.
- EC is issued by registrar. It states that the property is now lien and debt free.
- The Encumbrance certificate can be received from office of local registrar.
- For obtaining EC, the borrower must submit a written application to the bank.
2. Lawyer clearance certificate
- The borrower can approach a lawyer who provides a certificate as second opinion on the property.
- This certificate also states that the property is now free of debt and liens. When visiting the lawyer, one must carry all the home loan closure proof.
- The lawyer clearance certificate shall also help at the time of selling or getting loan on the property.
karnataka Bank Home Loan Closure FAQs:
1. What is the right time to visit the Karnataka bank for housing loan closure?
It is best that the borrower visits the bank (any branch and not necessarily the bank branch that issues the loan), during visiting hours and on a weekday than a weekend.
2. Does the borrower pay penalty charges on prepayment of home loan?
Charges on prepayment of the housing loan may apply as per the regulations of the Karnataka bank.
3. Which important things the borrower must study on successful closure of loan?
- Principal and interest statement
- Home loan EMI statement
- Final home loan closing statement
4. Is there another way to repay the Karnataka bank home loan?
The housing loan from this bank may be eligible for Accelerated Repayment Scheme or other options of repayment.
5. Are there any charges in case of delayed EMI payments for home loan?
The Karnataka bank may levy 2% on the unpaid amount as fee/charge for delayed EMI payment.
6. Does CIBIL score get affected after home loan closure? How much time does it take?
The credit score of the borrower is affected by home loan closure and it takes 3 months from the date of closure to impact the CIBIL score.
7. When will the candidate/borrower receive update on CIBIL score from the Karnataka bank?
It will consume a month after the update on credit score for the borrower to receive about the CIBIL score by the bank.
8. Where and when the amortization sheet be downloaded concerning with the bank?
The amortization sheet after the housing loan closure can be obtained from the bank’s official website by simple download. It can be downloaded a month after the home loan closure.
9. Will Karnataka bank take responsibility if the property deed file is damaged during courier?
In case the property deed file bears tear, damage or any mutilation during courier, then the Karnataka bank will not accept any responsibility for the same. The borrower, to avoid this possibility, should collect the property deed personally.
Home Loan Closure By Banks
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- ING VYSYA Bank Home Loan Closure
- Jammu and Kashmir Bank Home Loan Closure
- Karnataka Bank Home Loan Closure
- Karur Vysya Bank Home Loan Closure
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- LIC Home Loan Closure
- Magma Fincorp Home Loan Closure
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- State Bank of Hyderabad Home Loan Closure
- Standard Chartered Bank Home Loan Closure
- How to Close DMI Housing Loan
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- Punjab and Sind Bank Home Loan Closure