What are the interest rates applicable on DBS Home Loan?
An interest rate of 8.70% will be levied for home loans availed without flexi account facility and 8.85% for loans availed with flexi account facility.
What are the benchmarks for MCLR offered by the bank?
Currently the MCLR benchmark as set the DBS banks is as follows
As per the MCLR for home loans, DBS Bank has set the 3 Months MCLR for home loan.
How interest will be calculated on DBS Home Loan?
Borrower has to pay interest on home loan as specified in the loan Agreement that will be executed between the borrower and the DBS Bank.
DBS Bank will calculate the interest on a daily basis on the total outstanding balance and then compound it until the monthly due date as set in the payment schedule. Interest in the usual period will be paid in the form of EMIs (Equated Monthly Installments) or Pre-EMIs.
Additionally, default interest against the late payment of EMIs and interest on interest as payable in agreement with the loan terms, will be paid by the borrower and would not be covered as part of the EMIs or Pre-EMIs.
What type of interest rate will be applicable on home loan?
The borrower can choose of any type of interest rate out of three, Fixed, Floating or Hybrid Rate of Interest. Fixed rate of interest is the one where interest rate is fixed for the loan tenure, as decided by the bank.
Whereas Floating rate of interest, often known as variable rate of interest changes periodically depending upon the MCLR (Marginal Cost Lending Rate) set by the bank. Currently Floating rate of interest is linked to the 3 Months MCLR as declared by the bank. Any change in the 3 Months MCLR will result in a change in interest rate applicable on the availed loan. However, any such change will be notified to the borrower and will apply from the date of such change. The standard reset date for the Floating Rate of Interest is the 7th day of each Quarter. I.e. 7th January, 7th April, 7th July, and 7th October. In case, 7th is a holiday as per RBI holiday calendar for Mumbai, the previous working day would be considered as the effective date.
The borrower can also choose for a third type of interest rate known as Hybrid rate of interest, which is a combination of both Fixed and Floating rate of interest. If home loan is availed at Hybrid rate of interest would be fixed for a specific period and floating for the rest of the period.
If a borrower wants to switch to a different type of interest rate from the one he/she has chosen, can do so by paying a fee of maximum upto Rs. 5,000 for switching from one rate of interest to another as permitted by the DBS Bank.
What is the late payment fee? And how much do I have to pay if my EMI got late?
Late Payment Fee, generally known as Default interest or Penal interest, is an additional fee if the borrower fails to pay the EMI by the monthly due date as set by the bank.
Late Payment Fee will be calculated daily based on the actual number of days in the year. Without prejudice to the foregoing, and for clarity, if the bank recalls the loan or any part thereof, the borrower has to pay late payment fee on all outstanding principal, interest and other money due from the date of recall until the date of full payment to the Lender.
What is the minimum and maximum loan amount I can avail?
A customer can avail minimum Rs. 11 Lacs to maximum Rs. 5 Crores, depending upon his/her repayment capacity and location of the property.
Repayment capacity consists of some important factors such as income, age, living expenses, credit history, dependents in the family, value of the property and any commitment to other bank/institutions.
How long does it take to sanction the loan?
It can take upto 15 working days under normal circumstances once you have provided all the necessary documents.
How do I repay my monthly instalments?
Monthly EMIs can only be paid by giving Standing Instructions on your DBS bank account, or through the Electronic Clearing System (ECS) by setting up an instruction to the bank for such payments, through the National Automated Clearing House (NACH) system by setting up instructions for such payments or by providing the Lender with sets of Post-Dated Cheques (PDCs) or Undated Cheques. Such instructions or cheques must be executed and delivered to the bank till due date.
The borrower should ensure that the payment instruction or cheque is honoured and therefore must ensure that:
If the property is under construction, and I have not taken full disbursal, what options do I have regarding repayment of the loan?
You can choose to pay either Pre-EMI or full EMI during the construction of the property. Where Pre-EMI is the calculation of the interest on the amount disbursed thus far, and EMI is calculation of the interest to be paid on the fully disbursed amount, paid on a monthly rest.
Can I take a top-up loan on an existing loan without offering any additional security?
Yes, as offered by the DBS bank, once the borrower has completed six months of repayment on his/her home loan, he/she can apply for a top-up loan, over and above the existing home loan.
However, approval of the top-up loan depends upon the repayment track of the borrower and the number of defaults made thus far.
Is it necessary to insure the property?
Yes, insurance of the property is mandatory. The borrower must ensure that the property is duly and properly insured against fire and other appropriate hazards till full repayment of the loan. Borrower has to provide evidence thereof to the Bank, each year or whenever called upon to do so. When processing the insurance policy for the property, the borrower must ensure that the DBS Bank Ltd should be the beneficiary of the insurance policy.