Congratulations on receiving the Sanction Letter from your Home Loan provider. But, what happens next? How is the loan disbursed? Read this post and learn more.The process of acquiring a housing loan in India is divided into stages. Application, documentation, approval, property verification, valuation, and disbursal, each stage involves a few different steps. For instance, loan approval is followed by the Home Loan disbursement process.At this stage, the lender pays out the loan amount to the builder or to the seller on behalf of the borrower, to purchase the property. If you’ve already got your Home Loan approved and received the Sanction Letter, understanding the disbursement process in detail can help avoid confusion, errors, and delays.Here are the different steps involved in the disbursement process:Home Loan1. Property Evaluation and Document SubmissionOnce the loan is approved, a technician appointed by the lender will visit the property for evaluation. If the property is already constructed, maintenance related matters, age of the property, and its surrounding areas will be inspected. For under-construction properties, the quality of construction and its current stages are noted. The technician then submits the evaluation report to the lender.After a successful evaluation, the borrower must submit the original property documents, like the Title deed, Allotment Letter, stamped Agreement of Sale, and the NOC. The legal counsel of the lender will also examine these documents. Your property documents work as collateral or security against your Home Loan, and will remain with the lender until the loan is fully repaid.2. Submit the down-payment proofAs per guidelines, the LTV or Loan to Value ratio is generally between 70% and 90% of the cost of property and the lender approves the loan within this ratio. What you pay is the balance amount as down payment to the builder/seller. If you’ve made the down payment to the builder or seller, you’ll be required to submit a proof of payment or an ‘own contribution receipt’ to the lender, to proceed with the next step of the Home Loan process.The payment proof can either be your net banking transaction details, in case of an online payment, or a copy of the payment cheque or bank statement, if the payment has been made offline.3. Request for disbursementAfter providing the down-payment and submitting the proof, the disbursement of the loan will be sanctioned only after you submit all the required documents (Loan Agreement, original property documents, repayment mode etc.). For availing disbursement, you can visit the nearest branch office of the lender or contact your relationship manager.Disbursement stages for under-construction propertyIf the property is already constructed, the entire loan amount can be released by the loan provider. However, if it is an under-construction property, the funds will be released in parts, adhering to the stages of construction.The builder generally sends a notification to the buyer with details of the progress in the construction of the property. A Demand Letter is sent after the completion of each stage. As per the demand received from the builder, you request your lender for subsequent disbursement. Basis the demand received, your chosen lender will release the funds in proportion to the progress of construction.Ready to be a homeowner?You only become a homeowner, after the completion of the the Home Loan disbursement process, end-to-end. While the process involves several stages, it is certainly worth your time and effort to gift yourself a home, being an important life goal.Moreover, with the introduction of online Home Loan application, documentation, and disbursal, the entire process is no longer as time-consuming or complex as it used to be. Choose a reputed lender to ensure that you can receive all the assistance you need at every step of this important journey.Apply Now
health insurance policyUnfortunately, he met with an accident that caused brain hemorrhage. The cost of the treatment was 20 lakhs. With no insurance cover his family had to avail a medical loan for his treatment. Not just this, his family also had to go through a lot of physical and emotional trauma. With medical expenses on the rise and an increase in lifestyle-related diseases, having a health insurance policy has become significant.While some people rely on health policy to pay for medical expenses, some are not prepared and depend on availing a personal loan in case of emergency. Today, banks and NBFCs offer personal loans for medical emergencies that can help an individual pay for medical expenses.If you too are thinking of choosing between a medical loan or health insurance, then read below to know the difference between the two.Medical LoanThis is a type of personal loan that helps one take care of various medical expenses including surgery costs, operation, and other medical conditions.Health InsuranceThis is a type of insurance that provides coverage for medical expenses based on the coverage amount chosen by the policyholder. Coverage is offered based on the premium paid which is decided based on age, income, existing medical condition, etc. A cashless treatment facility can be availed at the network hospital of the insurance company. In case the hospital is not a part of the insurance company’s network then reimbursement is provided wherein the insurer has to provide medical bills and pay for the treatment first and reimburse the bills later.What’s the difference?Health Insurance is purchased as a precautionary measure to combat medical inflation and take care of medical expenses in case any medical emergency strikes.Whereas medical loan is usually taken only after a medical emergency strikes.Health insurance provides coverage for certain illnesses after a waiting period of 2-3 years. Depending on the insurer and the plan chosen, coverage may or may not be provided for critical illnesses like cancer, kidney failure, etc. whereas, a medical loan does not come with any waiting period or limitation. The loan amount can be used immediately for the treatment of any kind of medical condition.Health insurance premiums can be paid in EMIs and it does not have any impact on the credit score of the borrower. However, medical loans have to be repaid in EMIs based on tenure, interest rate and the loan amount chosen.Health insurance has to be renewed every year I.e premium has to be paid every year irrespective of whether you claim or not. On the other hand, medical loans are only opted for when necessary.Medical loans can be taken by any salaried, self-employed individual. Health insurance can be purchased by any individual having no previous major history of heart attack, cancer, etc.It is important to keep in mind that health insurance premium increases in case if the policyholder has pre-existing medical conditions like diabetes, cholesterol, etc. Based on the existing condition, the insurance company may charge you a higher premium or deny coverage.Medical loan benefitsQuick approval and disbursalCovers all types of medical conditionsMoney can be used to take care of all types of health expensesCollateral free loanFlexible EMI tenuresHealth insurance benefitsCovers hospital billsProvides tax benefits up to Rs.1 lakhSaves you from liquidating your savingsCan avail health cover of Rs. 1 crore and aboveConclusionWhen it comes to buying the best health insurance in India, keep in mind various factors such as coverage, premium, room rent, waiting period, etc. because all these factors can increase your out of pocket expense in the future. And if you plan to opt for a medical loan, consider the interest rate and the tenure as higher the tenure, lower the interest and vice versa. When choosing between the two-think long term because buying insurance at old age would increase the premium you would have to pay.coverfox.com
