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Lakshmi Vilas Bank Limited was founded in 1926. It is an Indian bank, which got a license in 1958 from Reserve Bank of India. It also started the commercial banking operation under RBI license. The bank’s services concentrate on corporate banking, retail banking, bank assurance, loan schemes, attractive deposit schemes, and home loan for purchase or construction of a new house or flat, house or flat constructed by a reputed contractor or promoter.
Lakshmi Vilas Bank Home Loan Details
The bank offers housing loans for a wide range of needs. It has a pan-India presence and provides a home loan to qualified individuals and HUFs under the aegis of a Karta. LVB home loan is provided for the following purposes:
- To purchase or construct a new flat or house
- To carry our major repairs for existing unit
- For home improvement services such as extension, furnishing and renovation
- For the purchase of old houses
- To buy the residential plot from reputed private and government agencies.
Features of Lakshmi Vilas Bank Home Loan
1. Repayment period
The borrower can repay within 240 monthly instalments or 20 years on EMI basis for funds taken to construct or purchase a new flat or house. However, housing loan for renovation and repair of an existing house, the tenure is up to 5 years or 60 months. Similar tenure is valid for loan taken to buy a residential plot. The loan repayment period includes holiday period if any.
2. Loan Margin
For construction loans and finance for purchasing a new flat/house, the margin is 20 percent. The loans for the purchase of old houses and approved residential plots have a margin of 25 percent.
3. Loan and Banking Tools
Queries or changes in loan account can be availed during the operating hours of the Lakshmi Vilas Bank. The customers have the facility of the toll-free number and convenience of accessing their account within a click of a button through net banking tool from the official web portal.
Lakshmi Vilas Bank Home Loan Interest Rates
The interest rate currently is 9.85% to 10.40% (MCLR + 0.10%), and loan tenure can extend to 20 years. The LVB interest rates are mostly uniform across term options in housing loan. The effective interest rate basis on Marginal Cost Based Lending Rate (MCLR), which is mandated by RBI (Reserve Bank of India).
The variable and fixed component of the interest rate can be revised and the borrower must confirm the prevailing rate with the bank representative.
Essentials of the Lakshmi Vilas Bank Housing Loan Scheme
1. Eligibility Criteria: HUFs and individuals with regular income but from established sources. Proof of income and proof of salary certificate and income tax return file documents are some of the things to be submitted at LVB.
2. Documents Needed: The salaried individuals must submit proof of birth, identity, and address and financial documents such as past three months bank statement and last two months salary proof, proof of at least 2 years of working experience, and Form 16.
For self-employed individuals, the documents required are proof of birth, address, and identity with financial documents such as most recent income tax returns with interest computation, last three months bank statement, last two years profit and loss account statement, balance sheet, proof of at least three years of business continuity, all these documents must be certified by a chartered accountant.
3. Maximum Age Limit: The home loan must be liquidated before the borrower reaches 65 years of age, and the repayment term selected must not exceed this limit.
4. Loan Amount: Minimum amount to borrow is Rs. 10 lakhs and above.
5. Processing Charges: 1% to 2% of the loan amount will be charged as processing fee charge.
6. Prepayment Charges: There are no prepayment charges for Lakshmi Vilas Bank home loan.
7. Toll-Free Number: To reach centralized customer service, the customers can call on 1800 – 425 – 2233 during regular and operational banking hours.
How Do You Close Lakshmi Vilas Bank Home Loan through Creditseva?
A housing loan when settled or closed relieves the borrower from debt but also stands as testament or proof that the house/flat/plot/property will now belong to the borrower completely, and the bank will have no say on its ownership. When closing housing loans, the borrower must maintain many cautions and not follow any shortcuts, but only steps provided by a financial advisor.
Creditseva is your financial guide and offers dedicated assistance with a thorough guide to close housing loan of Lakshmi Vilas Bank in extremely simple and unsophisticated manner. So, sign up or sign into Creditseva user account and follow the mentioned steps by our financial experts.
The experts on Creditseva help borrowers with hassle-free closure of LVB home loan. There are four ways of carrying out housing loan closure:
- Closure through prepayment of Loan
- Closure through completion of loan tenure
- Closure on account of bad loan
- Closure through settlement of loan.
Lakshmi Vilas Bank Home Loan Closure by Prepayment
Step 1: Personal visit
- Candidate/borrowers must visit the LVB home loan branch nearest to them or one of their choice.
- It is not necessary that one visit the bank branch from where the funding was received.
- Loan related queries and procedures are best completed during weekdays as the working hours are longer.
- One must visit the bank during its operation hours and during weekends; the bank may not handle prepayments.
Step 2: Reach representative
- The housing loan closure has a list of checks and formalities attached, which could be time consuming.
- The borrower must have a proper meeting and discussion with the bank representative before proceeding ahead.
Step 3: Disclosure form
- The borrower will have to study and fill the disclosure form provided by the representative of LVB.
- All sources of income through for partial or full prepayment must be done and mentioned clearly.
- The exact amount may not be revealed but approximates maybe stated.
Step 4: Cheque for pre-payment
- The borrower must calculate the prepayment amount and the representative’s help can be taken for this purpose.
- Once the amount is revealed, borrower must forward a cheque of that amount as prepayment in favor of Lakshmi Vilas Bank Limited.
Step 5: Receipt of prepayment
- The receipt of prepayment must be handed to the borrower.
- The receipt also indicates that now the home loan take by borrower is paid off in full.
Step 6: Amortization sheet
- The borrower must request for amortization sheet from the LVB.
- Details of EMIs paid until date will be present in the amortization sheet.
- The sheet can be downloaded from the website of the bank.
- The borrower may even request the amortization sheet to be sent on the email address.
Step 7: Collection of property deed
- Once the prepayment completes, the registrar then sends property deed file to Lakshmi Vilas bank by courier, the process of which may consume ten to fifteen days.
- If the property deed is damaged in courier and transit then the bank will not claim its responsibility.
- Thus, the borrower should come collect the property deed file personally.
- Borrowers must come to collect the property deed file instead of having it couriered to them.
Lakshmi Vilas Bank Home Loan Closure by Loan Tenure Completion
- Borrower can start with the home loan closure on paying the last EMI.
- Post a written application for housing loan with nearest Lakshmi Vilas Bank branch.
- Attach the proof of last EMI payment along the application.
Closure of Lakshmi Vilas Bank Home Loan on Account of Bad Loan
When the borrower repayment status is doubtful due to his/her becoming bankrupt, then the housing loan status in the accounts of LVB is of ‘Default’ until the loan is not written off. Once the home loan is written off, it becomes a bad loan.
- Visit the nearest Lakshmi Vilas bank home loan branch.
- Submit a written housing loan closure application to the bank representative.
After the above process, the occurring changes are listed below:
1. Home loan status now changes to ‘Settled’ from ‘Default’ for the borrower’s loan account.
2. SOA (Statement of Account) Update: In form of statement print out or passbook, SOA has list of all transaction on bank account of the borrower. It also states the balances, deposits and withdrawals along with bad loan settlement as written off.
3. CIBIL Score Update: CIBIL score may weaken on bad loan closure but if timely repayments and installments were done, then the negative credit score can turn to be better down the line.
Lakshmi Vilas Home Loan Closure through Settlement of Loan
On non-payment of dues, a home loan is regularly settled in following ways:
- Banks await repayment recoverability for at least 3 months to assess the borrower’s response in paying the dues.
- When the outstanding dues are unpaid then the loan account becomes a non-performing asset (NPA).
- Until the loan settlement, the borrower becomes a ‘Defaulter’.
- For a short term, the housing loan settle may affect the CIBIL score of borrower negatively.
- However, account of timely EMI payments will build the CIBIL score eventually.
- By sending a written housing loan closure application, the borrower can initiate the closure of loan process and visit the nearest Lakhsmi Vilas bank branch.
The following procedure occurs after the above-mentioned practices:
1. SOA update: Until repayment is not done the housing loan settlement will reflect in the SOA update. The below mentioned options for repayment is available for the borrower:
- Restructuring of loan
- Prepayment of rest of loan
- Reimbursement of the investment
2. Offer letter: On settling home loan, the status in bank account of loan will be ‘Settled’.
3. CIBIL score Update: Home loan settlement is a complete closure to the debt, and negatively affects the CIBIL/credit score of the borrower but in time of receipt of credit report the same will normalize.
Sample Written Application for Lakshmi Vilas Home Loan Closure
The Bank Manager
Lakshmi Vilas Bank Limited
[Address of the branch where loan closure was done]
Subject: Home loan closure Request
I, [Your name] had taken a home loan under my account number – […………………] that is successfully repaid. All dues are cleared. I have attached the proof to the last EMI payment. I thus request you to further accelerate the home loan closure and deliver me the acknowledgement letter stating the successful housing loan closure. The following documents will be due for collection later to closre acknowledgement:
- Original Property Documents
- Loan closure certificate or NOC/NDC
- CIBIL score update
Thanking you for your help,
Important Documents to Receive From LVB on Home Loan Closure
1. Property Deed
- Original sale deed, cancelled cheques, payment receipts, possession letter, POA are some of the documents in property deed.
- The borrower has to pick up the original files and not the copies.
- The property deed is eminent for initiating sale of property in future or getting loan against the said property.
2. Loan Closure Certificate (LOC) or No Dues Certificate (NDC) No Objection Certificate (NOC)
- These files are a proof for the debt free status of the property.
- It also means that home loan principal amount and interest is paid in full.
- The LVB’s NOC letter will contain these details.
3. CIBIL Score
- The closure of housing loan affects CIBIL score and its update.
- The credit score is updated every month on the 28th.
- The loan related payments and its details are shared by Lakshmi Vilas bank with CIBIL.
- It will reduce the borrower’s creditworthiness until the next 6 months for new credit.
- The CIBIL score will stabilize with time when worked on it.
- A good CIBIL score is essential for future financial planning.
4. Memorandum of Deposit
- The borrower will have the MOD already given by LVB at the start of the housing loan
5. Promissory Note & thank you note.
Things to do on Home Loan Closure and Clearance from LVB
The borrower must collect the original form of the bellow mentioned documents:
- Approved layout and map issued by governmental authority or similar
- Legal Scrutiny Report that all dues have been cleared
- Statement of loan account reflecting all details of loan and interest repayments
- Original property tax paid receipts or copies if possible.
- Original title and deed document
- Original or certified copy of title deed of previous owner
Removal of Lien
- The borrower cannot sell the property if a lien exists on it.
- When taking home loan from LVB, the bank prevents borrower from selling property before making repayment by creating a lien on the concerned property.
- Thus, lien is a registered transaction with registrar of properties for the said property and it can be removed after repayment with help of the bank’s representative.
Encumbrance certificate (EC)
- EC is obtained from the office of local registrar. It contains details of financial transactions performed in the name of the property.
- The registrar by Encumbrance certificate certifies that the property is free from lien and debt.
- The borrower must write and submit with bank the application for the same.
Lawyer clearance certificate
- As second opinion for the property, the lawyer’s clearance certificate also verifies that the property is free from debt and lien.
- This certificate is beneficial at the time of loan against the said property and selling of this property.
LVB Bank Home Loan Closure FAQs:
1. When should I visit the bank for initiating housing loan closure?
Weekdays are well suited for home loan closure procedure.
2. Do you have to pay charges on prepayment on LVB Housing Loan?
The prepayment charges are nil by the bank but it can be updated so go through your loan program to understand these details.
3. Which documents are important to collect on housing loan closure?
- Principal and interest statement
- Home loan EMI statement
- Final home loan closing statement.
4. Is there any other way to close the LVB home loan?
The loan repayment may be repaid with accelerated repayment scheme and other options presented by the Lakshmi Vilas Bank.
5. What are the charges on paying the EMIs late on a home loan?
The bank can incur late payment charges up to 0.2% of the unpaid amount or less.
6. What is the time taken for home loan closure in affecting CIBIL score?
The time taken for home loan closure to have an effect on CIBIL score is 3 months.
7. How long does the Lakshmi Vilas bank take to share the CIBIL score update with me?
You will receive the credit score update by LVB a month after the CIBIL score is updated.
8. When Can the Amortization Sheet be downloaded from the LVB website?
You can download the amortization sheet from the housing loan closure portal of Lakshmi Vilas Bank after the expiry of a month from home loan closure’s date.
9. Will LVB take responsibility for damages and mutation the home property deed during courier?
The Lakshmi Vilas Bank shall take no responsibility in this case and hence it is advisable that you must pick it up from the bank than having the property deed couriered.
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