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Starting with a capital of only Rs. 1 lakh, Karur Vysya Bank (established in 1961), grew as one of the best financial institutions. This bank was first introduced in Karur, Tamil Nadu and is spread across India with 629 branches and 1645 ATMs. It is one of the first few banks to attain networking in all its branches along with offering core-banking solutions with technological advancements. KVB has several tailor-made deposits and loan products. If a person needs a home loan and is a resident India or HUF, then he/she can get funds to purchase a flat or house via Happy Home Loan scheme.
Karur Vysya Bank Home Loan Details
|Interest Rate||9.50% to 9.60%|
|Loan Tenure||Up to 25 years|
|Guarantor Requirement||Guarantor needed|
|Processing Fee||Rs. 3750 to Rs. 12500 + ST|
|Pre-closure Charges||Depends on the home loan scheme|
|Collateral||Insurance policies, equitable mortgage or bank deposits|
Karur Vysya Bank Home Loan
The Happy Home Loan Scheme by Karur Vysya is available for HUFs and resident Indians for purchasing house or flat and other purposes listed below.
- Buying land plots for construction
- Loan takeover from other banks
- House construction
- Buying plots or flats where developers are the Government authorities
- Purchase of flats and house, which are not older than 15 years
- Renovation, extension, modification, repair of flats or houses.
KVB Happy Home Loan Scheme Eligibility
- The applicant can get maximum loan eligibility if spouse’s income is added.
- KVB provides loan for buying a vacant land but construction on the same must commence in six months from the date of receiving the loan.
- If the borrower is agriculturist then he/she can get a home loan from this bank provided a valid proof of income is produced.
- After deduction of the housing loan EMI, the net takes home salary must be at least 40 percent of gross income.
Karur Vysya Bank Home Loan Documents
- Salaried Applicants: last six month’s salary certificate and employment certificate from the employer
- Self-employed Applicants: Income statement and latest income tax returns filed by the borrower.
Karur Vysya Happy Home Loan Scheme
1. Loan Margin: The loan margin by KVB depends on factors such as:
- If the borrower is purchasing an old house or flat with repayment tenure until 15 years then the loan margin is 30%.
- For the same, if the repayment, tenure is more than 15 years the loan margin is 35%.
- If one is buying a new house or flat then the loan margin is 25%.
2. Loan Security: Equitable mortgage of building and land must be offered as primary security to KVB. It works as collateral, but you can even replace it with bank deposits, NSC or LIC policies.
3. Interest Rates: The Happy home loan works on floating interest rate of one year’s MCLR with 0.85%. The housing loan under CRE norms are given at a floating ROI of MCLR with addition of 1.60% yearly.
4. Repayment Tenure: It is from one year to 25 years.
5. Insurance Cover: The borrower can also avail LIC, BSLI, or SBI Life with the loan amount, where single premium has to be paid by the applicant.
6. Guarantee: A guarantor with adequate net worth is acceptable. Most preferable guarantors are friends, spouses and family members.
7. Processing Charges: 3750 plus ST for loan amount up to Rs. 25 lakhs. Rs. 7500 plus ST (service tax) for loan between Rs. 25 lakhs and Rs. 50 lakhs. Rs. 12,500 plus ST for loans over Rs. 50 lakhs.
Special Home Loan by Karur Vysya Bank
This housing loan is quite similar to Happy Home Loan but comprises of different repayment tenures with 5 years as minimum and maximum is 10 years. Residents, NRI Indians and HUF who must be existing customers of Karur Vysya Bank and been associated with it for a period of 2 years continuously as accounted until the current application date.
1. Interest Rates: The loan repayment period of 5 years asks for BPLR of 3.25% and minimum 9.25% rate. For repayment tenure of 5 to 10 years, the BPLR is 3% and rate is minimum 9.50%. Repayment period of over 10 years, the BPLR is 2.50% and rate is at least 10%
2. Repayment: It is done via EMIs and in case the interest rate changes, then the instalment amount to be paid will change accordingly.
3. Charges for Prepayment: Partial and complete prepayment will levy 0.5% of the repaid amount if the residual maturity of the housing loan is less than five years. If the same is more than five years, then 1% of the repaid amount is to be paid as prepayment charge.
KVB – NRI Gruhapravesh Loan
Both persons of Indian origin (PIO) and Non-Resident Indians (NRIs) can benefit from NRI-Gruhapravesh, which is a unique housing loan plan where the applicant must be at least 25 years old, must have a steady source of income, and employed abroad for two years the minimum.
He/she should possess a genuine job contract and work permit, with a valid passport if it is PIO and legit Indian passport if it is NRI, and monthly net income must be US$ 750 minimum or the applicant’s net annual income should be at least US$ 9000.
- Loan Margin: 20% margin for NRIs and POIs
- Interest Rate: Additional 0.85% with one year MCLR of floating interest rate
- Processing Charges: Up to Rs. 25 lakhs- service tax plus 0.25%. Rs. 25 lakhs to Rs. 75 lakhs- service tax plus Rs. 10,000. More than Rs. 75 lakhs then Rs. 20,000 plus service tax.
- Loan Repayment: Remittance from abroad through usual banking channels is allowed. Remittance from NRE/FCNR/NRO accounts to the bank. Relatives of the borrowers can also make repayment on behalf of loan received in INR. The interest rate charged is on the diminishing balance.
- Repayment Tenure: Maximum time is 25 years. However, it depends on loan liquidation by the time the borrower reaches 65 years of age or retirement, whatever comes earlier.
- Holiday Period: The NRI-Gruhapravesh loan holiday period can be 2 months after completion or 18 months from the date of loan disbursement, whichever duration is shorter if the loan is for a new house. For other cases, the holiday period is two months later the final disbursement.
- Loan Security: Third party guarantees, registered mortgage, a deposit of title deeds, NSCs, LIC policies etc.
How to Close Karur Vysya Home Loan through Creditseva?
Home loan closure is a scenario when the borrower settles or closes loan and owes the debt no more to the bank or financial institute. The procedure is a crucial one and involves several steps and collection of important documents, with a statement of proof that the bank has no control on the property anymore, and the property deed, papers etc.
To close the Karur Vysya Bank home loan, Creditseva has the whole process explained in an uncomplicated manner and by observing these guidelines one can close the housing loan within no time. But before that, the borrower must sign up or sign in to the Creditseva user account and then follow given steps by our financial experts.
A borrower can close his/her Karur Vysya home loan by the following ways:
- Closure through prepayment of Loan
- Closure through completion of loan tenure
- Closure on account of bad loan
- Closure through settlement of loan
<h2>Karur Vysya Home Loan Closure by Prepayment </h2>
Step 1: Personal visit
- It is best to visit the branch during weekdays and working hours than on a weekend.
- The borrower does not have to visit the bank from where the loan was taken but any of the bank branches.
Step 2: Reach representative
- The applicant must discuss all the processes about the closure of housing loan via proper discussion even if it time-consuming.
- After understanding the mandatory checks and formalities, only then the person must fill out the disclosure form.
Step 3: Disclosure form
- The disclosure form must be filled carefully mentioning the sources of income through for prepayment by complete or partial amount.
- The exact amount may not be provided but approximates will be stated.
Step 4: Cheque for prepayment
- Make a calculation of the needed prepayment amount.
- Now hand the cheque of the same amount in the favor of Karur Vysya Bank
Step 5: Receipt of prepayment
- Prepayment once done, the receipt of it is collected by the borrower.
- The receipt signifies that the housing loan is now successfully paid for.
Step 6: Amortization sheet
- The bank representative can hand over the amortization sheet once the borrower requests for it.
- All the details of EMIs paid until the last one will show in the sheet.
- The bank can even email this sheet to the borrower or the same can be downloaded from the home loan portal of the Karur Vysya Bank.
Step 7: Collection of property deed
- It takes 10 to 15 days for the property deed file to be couriered to the bank after the release of prepayment.
- The property deed is couriered by the registrar and borrowers can come collect the file as well.
- It is better to collect personally the property deed because in case the same is damaged during the transit then the bank shall bear no responsibility for it.
Closure by Karur Vysya Home Loan Tenure Completion
- Housing loan closure is done when the last EMI is paid.
- The borrower has to post a written loan closure application than to the nearest home loan branch of Karur Vysya Bank.
- It is mandatory to attach the proof of the last paid EMI for a smoother process.
Karur Vysya Housing Loan Closure on Account of Bad Loan
In a situation when a borrower becomes bankrupt, then he/she may be unable to pay off the EMIs. In such case, the loan account status for that borrower becomes “Default” and until the loan is not written off, the status of the account stays so, after which it is classified as a bad loan. Visit the Karur Vysya Bank (any branch) and submit a written loan closure application to the bank’s representative.
The following procedure takes place:
1. The home loan status then changes to Settled from Default.
2. SOA (Statement of Account) update: The bad loan settlement will show as written off in SOA, which will also consist of transaction details of borrower’s bank account with list of deposits, withdrawals and balances. It is available in statement or passbooks print out.
3. CIBIL Score Update: The credit score in CIBIL report will be affected negatively. If the installments for repayments were timely, then in few months the CIBIL score will begin to repair.
Closure through Settlement of Karur Vysya Home Loan
When the borrower leaves repayment not paid for long or cannot pay so, then a regular settlement of loan is done.
- Bank may a time period of 3 months for judging the repayment recoverability of the borrower
- The loan account resumes status NPA once the amount is irrecoverable.
- Until the loan is not settled, the borrower is marked as ‘defaulter’.
- The credit score of the borrower is also impacted negatively for a short term.
- One can write the loan closure application and initiate the procedure of closing home loan by visiting the branch and submitting the letter.
The following procedure takes place:
1. SOA update: The settlement of housing loan will show in SOA update until the repayment is not completed. One can repay the loan by restructuring the loan, reimbursement of the investment, prepayment of the remaining loan.
2. Offer letter: In the letter, the home loan after settlement assumes the status ‘settled’ in a bank account.
3. CIBIL score update: Full closure of loan or settlement negatively affects the CIBIL score of the borrower. However, with time on receipt of a credit report, the score will start recovering.
Sample Letter for Closure of Karur Vysya Home Loan
The Bank Manager
Karur Vysya Bank
[Address of the branch where loan closure was done]
Subject: Request for Home Loan Closure
I, [Your name] had taken a home loan under my account number – […………………] that is now successfully repaid along with all the dues. I am submitting the last EMI payment proof. I humbly request you to initiate the closure of the housing loan and provide me with the letter of acknowledgement that authorizes the successful home loan closure. Please keep the following documents available after closure with the closure acknowledgement:
- Original Property Documents
- Loan closure Certificate or NOC/NDC
- CIBIL score update
Thank you for the assistance
List of Documents the Borrower Should Receive on Closure of Home Loan
1. Property Deed
The property deed is necessary when the borrower will want to sell the property in future. It is also useful when applying for a loan against property. Thus, one must collect it from bank, as it contains payment receipts, POA, possession letter, cancelled cheques etc. The person must collect the original form and not the copies.
2. Loan Closure Certificate (LOC) or No Dues Certificate (NDC) No Objection Certificate (NOC)
These documents or document is a proof that the borrower’s property will not be debt free and that the loan interest and principal amount is also paid off. The bank’s NOC will mention this information.
3. CIBIL Score
The housing loan closure will negatively affect credit score in this case, and reduce creditworthiness for new loan for the next 6 months. The details of related payments for housing loan will be shared by bank with CIBIL, where the credit score and report will update every 28th of the month. The CIBIL score will gradually get back to stable and build over time.
Memorandum of Deposit
The MOD exists with the Karur Vysya home loan customers and it is given at the beginning of the loan.
4. Promissory Note & thank you note.
Things to Do after Home Loan Clearance from the Bank
The original file of the following documents must be collected from the Karur Vysya Bank:
- Original or certified copy of title deed of the previous owner
- Approved layout and map issued by the governmental authority or similar.
- Original title and deed document
- Original property tax paid receipts or copies if possible.
- Statement of loan account reflecting all details of loan and interest repayments.
- Legal Scrutiny Report that all dues have been cleared.
Removal of Lien
- A lien (a transaction registered with the registrar of properties) may exist on the property for which the housing loan was taken. The process is initiated by the bank to prevent the borrower from selling the property before he/she repays the loan.
- Until the loan is not closed the lien won’t be removed and the borrower will be unable to sell the property which has an existing lien.
- Borrowers can get help from the bank executive to get the lien removed (if any) created on the property.
Encumbrance certificate (EC)
- Issued by the Registrar, EC has details of the financial transactions done in the property na,e
- The EC certifies that the property is without debt and lien.
- The registrar’s local office is where the borrower can collect the encumbrance certificate, but a written application for it must be first submitted to the bank.
Lawyer clearance certificate
- The candidate can now approach for a lawyer’s certificate that acts as second opinion the property and certifies that the same is now free of lien and debt.
- This certificate is of use during loan against this property and selling of the property.
Karur Vysya Bank Home Loan Closure FAQs:
1. Which is the Best Time to Visit the Karur Vysya Bank for Home Loan Closure?
It is recommended to choose weekdays to visit the bank for housing loan closure.
2. What is the prepayment charges involved?
- For special home loan– Partial and complete prepayment will levy 0.5% of the repaid amount if the residual maturity of the housing loan is less than five years. If the same is more than five years, then 1% of the repaid amount is to be paid as prepayment charge.
- For NRI Gruhapravesh Loan: Up to Rs. 25 lakhs- service tax plus 0.25%. Rs. 25 lakhs to Rs. 75 lakhs- service tax plus Rs. 10,000. More than Rs. 75 lakhs then Rs. 20,000 plus service tax.
3. Which documents must be studied carefully on closing the housing loan?
- Principal and interest statement
- Home loan EMI statement
- Final home loan closing statement
4. Which are the ways to prepay Karur Vysya Home Loan?
The bank can offer accelerated repayment scheme or other means to repay the loan.
5. What are the penalty charges on home loan EMI delayed payments?
The bank may charge a small percentage of the instalment amount to be repaid, generally 0.2% or less.
6. How long does it take the housing loan closure to affect the borrower’s CIBIL score?
It takes 3 months from the date of closure for the closure of home loan to affect the credit score.
7. When will the borrower get the update on his/her CIBIL score from the bank?
It will consume a month or so for the credit score update to be shared with borrowers.
8. When does the borrower download the amortization sheet from the bank’s website?
Following a month from the closure of home loan, one can download the amortization sheet from the bank’s website.
9. Does the bank accept responsibility for damages (if any) caused to property deed during courier transit?
The Karur Vysya Bank will not bear or share any responsibility for damaged cause to property deal during transit of courier. The borrowers must try to collect the same personally than choosing courier delivery.
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