FAQ’S – Personal Loans

a. What is a personal loan?

Ans: Personal loan is a 1 - 5 years unsecured loan given by banks, NBFC’s (Non-Banking Finance Companies)
or P2P lending platforms without asking for any collateral, guarantor or hypothecation of any assets. The
ultimate usage of a personal loan is left to the discretion of the borrower.

b. How Personal Loan eligibility is calculated?

Ans: Loan eligibility is dependent on primarily the following factors:

• The company where you work.

▪ Every financial institution has a list of companies running into thousands which they have
categorised into segments like A, B, C etc., depending on the credentials and financials of
your employer.
▪ The higher the category the higher is the loan eligibility chances.

• Quantum of loans and credit card outstanding that you already have

▪ Typically a financial institution will not give a loan if the total EMI obligation (including the
current personal loan that you are trying to apply for) exceeds 50-75% of your total net take
home salary.

• Your gross/net salary

• Your credit score
▪ As reflected in your CIBIL or Equifax report. Having a good credit score is a necessary but
not a sufficient criteria.

c. Loan got rejected even though you have decent salary package?
Ans: The final decision to grant a loan lies with the credit department of a bank. Some of the reasons why
a loan can be rejected are:
▪ Already running several loans and hence a bank may not be comfortable with your existing
leverage levels vis-a-vis your salary level.
▪ Issues in your credit history as reflected in your CIBIL, Equifax reports
▪ Most banks have certain internal credit parameters to evaluate a loan which is kept
confidential and not shared with us. Several demographic, financial and credit aspects go
into these internal evaluation. You might not have met the minimum cut off for obtaining a
loan.

Possible Way out: Our Financial Counsellor would suggest & guide you on the same

d. Pre-Closure vs Part-payment?
Ans: Pre-closure means, a customer wants to close the entire principal outstanding amount at one go.
Whereas part payment means that a customer wants to repay only a certain portion of the outstanding
amount.
e. Is pre-closure allowed in personal loans?
Ans:
▪ Some financial institutions have a lock-in of 6 months to a year while some allow you to pre close
even after the 1st EMI has been debited from your bank.
▪ There may also be restrictions that you can only use your own funds (and not the balance transfer
cheque of another bank) to pre close a loan.
▪ In addition, financial institutions may allow pre closure at no cost or may levy a pre closure fee (2-
5% of the amount being pre-closed).
▪ Please ask for clarifications to our or the banks’ loan advisor on all these factors before signing the
loan document.

f. Is part-payment allowed in personal loan?

Ans: Some financial institutions allow part payment. However, there can be restriction on how many times
in a year you can part pay and the minimum and maximum amount that you part pay.
Please ask for clarifications to our loan advisor on all these factors before signing the loan document.

g. What is the minimum & maximum loan amount offered in personal loan?
Ans:
▪ Generally, the minimum amount loan amount is Rs. 50,000/- and maximum amount is Rs.
30,00,000/-
▪ Higher loan amounts are dependent on a personal discussion that a financial institution may want
to have with the borrower and then take a call on the loan amount.

h. How rate of interest, processing fee, pre-closure fee determined on the personal loan?
Ans: The dependent factors are:

▪ Loan amount disbursed

▪ Company categorisation of your employer
▪ Tenure of the loan
▪ Salary of the customer
▪ Which bank account is the salary getting credited to

i. How long it will take to disburse the personal loan?

Ans: Axa guide will work with the financial institutions and get you the loan within 2 - 5 working days of
submitting completed documents.

j. Documents required while applying for personal loan?

Ans: One need to provide an identity proof, residence proof, last 3 months’ salary slip, last 6 months bank
statement and a passport sized photograph. Banks may also ask for additional documents later like Form
16, appointment letter, company ID card, previous company relieving letter

k. How does personal loan repayment happen?

Ans: All personal loans repayment happen in the form of an EMI (Equated Monthly Instalment) through
the customers bank account.
The customer needs to give few PDC’s (Post-dated cheques) and sign an ECS mandate in favour of the
financial institution disbursing the loan.

l. What happens if you miss an EMI payment or ECS bounce?

Ans: The financial institution will levy certain ECS bounce charges/penalties.
In addition it will get reported in your credit report.
Depending on the severity of the default it can have serious impact on your future credit possibilities like
a home loan, car loan etc.

m. Up-to what amount of loan one can avail?

Ans: One can avail a loan from Rs. 50,000/- to Rs. 30,00,000/- but this would be based on your income
status.

n. What can be the loan duration?

Ans: Depending upon your income and experience the duration would be decided which ranges from 12
to 60 months.

o. Is the fore-closure of the loan permitted?

Ans: Foreclosure is only possible if all outstanding payments and charges have been paid in full.
Foreclosure would only be allowed post this.

p. Does CIBIL play role in the loan approval?

Ans: Certainly as it is a measure of your financial status and your loan histories. Maintaining a healthy CIBIL
score would ultimately help your application and also the amount of loan you get and also the duration.

q. Why to apply a personal loan through AXA Guide?

r. Ans: This will help the customers with personalized and customized services that cater their various
needs. Helps in comparing details with other banks and it is possible to get expert financial opinions.

s. Is my information secured with AXA Guide?

Ans: Yes, none of our customer’s information is shared with any third party apart from the financial
institutions or banks that you have applied the loan for. Confidentiality breach is never an issue with AXA
Guide

t. Is there a way to check the application status online?

Ans: Yes, the status can be checked on the official portal of AXA Guide

FAQ’S – Unsecured Business Loans

a. What is an Un-secured Business Loan?

Ans:
▪ Un-secured Business loan is a 1 - 3 year loan given by banks, NBFC’s (Non-Banking Finance
Companies) or P2P lending platforms without asking for any collateral or hypothecation of any
assets.
 ▪ Entities like proprietorship, partnership, private limited company or public limited company are
eligible for this type of borrowing.
▪ The usage of a business loan is left to the discretion of the borrower and can be used for working
capital purposes, meeting short term cash flow requirements, investments into plant and
machinery etc.,

b. How is the loan eligibility calculated?

Ans: Loan eligibility is dependent on primarily the following factors:

▪ The credit score of the entity and/or the partner/director/proprietor of the borrowing entity as
reflected in your CIBIL or Equifax report or any other credit bureau.
▪ Having a good credit score is a necessary but not a sufficient criteria. If the credit score is a border
line case then the financial institution may take a subjective call to limit the loan amount.
▪ The last 2 year financials of the borrowing entity would play vital role.
▪ Factors like turnover, partner/director salary, depreciation, interest cost, net profit after tax are
some of the key parameters that goes into deciding the loan amount.
▪ Ability to service the EMI for the current loan be requested as depicted by the Debt service
coverage ratio (DSCR). Financial Institutions generally ask for a DSCR of 1X depending on case to
case basis

c. What is the minimum & maximum loan amount offered?

Ans: Generally, the minimum amount loan amount is Rs. 5,00,000/- and maximum amount is Rs.
75,00,000/-
▪ Higher loan amounts are dependent on a personal discussion that a financial institution may want
to have with the borrower and then take a call on the loan amount.

d. Documents required while applying for business loans?

Ans: Borrowing entity's PAN card, address proof, last 2 years financials (balance sheet, profit & loss, audit
report), last 12 months bank statement, VAT/service tax returns, partnership deed/MOA, existing loans
repayment track record.
Additionally, the partner/director's PAN Card, KYC, own house proof, ITRs etc. On case to case basis
additional documents may be required.

e. What is the interest rate & processing fee on the business loan?
Ans: The rate of interest varies from 16% to 23% and a processing fee of up-to 2.5% of the loan amount.
In addition an insurance cover would also be taken due to the pandemic

f. What is the minimum business vintage required to avail business loan?

Ans: 3 years business vintage is required

g. How important is the performance of the business considered for business loan?
Ans: The revenue pattern, years of operation, credit worthiness is evaluated for an existing business before
considering for loan processing.

h. Are you eligible for business loan?

Ans: You are eligible for a Business Loan if you:

▪ Are between 25-65 years of age

▪ Have business that shows a profit for the last three consecutive financial years
▪ Have business that shows an upward turnover trend
▪ Are able to show balance sheet that is audited by a registered Chartered Accountant.

i. Is the interest rate fixed or floating?

Ans: The interest rate for Unsecured Business Loan is fixed.

FAQ’S – Loan Against Property

a. What is Loan Against property?

Ans: There are times when everyone needs a little extra funds. Whether it is for personal or business needs,
with Loan Against Property, you get immediate access to money by using either your home or any other
property as security. From expanding your business to buying machinery with Loan Against Property, you
will never have to compromise.

b. What can Loan against Property be used for?

Ans: Any loan against a residential or commercial property can be used for both personal and business
purposes. In fact, you can use it for anything other than speculative or non-prohibitive activities.

c. What are the benefits of Loan Against Property ?

Ans: Loan Against Property offer benefits such as:

• Flexible repayment options

• Lower interest rates
• Tax benefits
• Quick and fast approvals

d. What type of properties will be considered as collateral?

Ans: Self-occupied residential property, commercial property (offices, shops etc.) and alternate property
(Residential plots, schools, hospitals, Industrial property, hotels) can be considered as collaterals.

e. Will I get loan against property if I own it along with my relatives?

Ans: Yes, you can. However, all the co-owners of the property will also have to become co-applicants of the
loan.

f. What can I use Loan Against Property for?

Ans: Whether you needed the funds to expand your business or have to meet your personal requirements,
we work with you to make sure you have the funds you need. Here are some uses for Loan Against Property:
 • Personal needs
• Meet Working Capital needs
• Renovation of property
• Investments
• Asset acquisition
• Consolidation of debt
• Mortgage buyout
• Refinance of self-financed property

g. How does the lending institution decide on the amount I can get as loan against property?

Ans: Basically, the financial institution looks at your repayment capacity.

For calculating the loan amount, your income, age, qualifications, number of dependants, spouse’s income,
assets, liabilities, stability and continuity of occupation and savings history are taken into consideration.

However the eligibility of loan does not, generally, exceed 60% - 70% of the market value of the property.

h. Can there be a co-applicant for loan against property? If yes, who can be co-applicant?

Ans: You can include your spouse as a co-applicant and that results in a higher amount being lent. However,
if the property is co-owned, all co-owners mandatorily need to be co-applicants.

i. What are the processing fees for such a loan?

Ans: Processing fee for loan against any property varies from FI to FI and is generally around 1%

j. How is the rate of interest on loan against property calculated?

Ans: Interest is calculated on daily reducing balance. Your monthly out-go (equated monthly instalment –
EMI) is much lower as compared to the interest on annual reducing balance.

k. What is the tenure of the loan?

Ans: Loans against property has a maximum tenure of 15 years, subject to the condition it does not exceed
your retirement age. This condition however can be flexible in certain cases

l. What security will I have to provide?

Ans: As the name implies you need to mortgage your property for availing this loan. This mortgage is
Equitable mortgage by Memorandum of Entry by way of deposit of title deeds and/or such other collateral
security, as may be necessary. Collateral security for by way of assignment of insurance policy or any such
other assignable financial instruments are also required, as security to loan if deem necessary by the financial
institution.

Please do ensure that the title to the property is clear, marketable and free from encumbrance.
To elaborate, there should not be any existing mortgage, loan or litigation which is likely to affect the title
to the property adversely.

m. Can I repay the loan ahead of schedule?

Ans: Yes. Prepayment is possible and there is no prepayment fee if you repay the loan after six months of
availing the loan if you pay from your own source of funds without transferring the loan.

n. How is my loan reassessed if there is a change in status from Non-Resident Indian to Resident Indian?

Ans: The repayment capacity of the applicant(s) based on Resident status is reassessed and a revised
repayment schedule worked out. T
he new rate of interest will be as per the currently applicable rate of Resident Indian loans (for that specific
loan product). This revised rate of interest would be applicable on the outstanding balance being converted.
A letter is given to the customer confirming the change of status.

o. What are the documents required for Loan Against Property?

Ans: You only need to provide some basic documents to process your Loan Against Property.

Documents Salaried SEP/SENP Non Individual

Application Form Yes Yes Yes
Photograph Yes Yes Yes
Identity Proof Yes Yes Yes
Residence Proof Yes Yes Yes
Signature
Yes Yes Yes
Verification
Income Details (2 Form 16 and latest 2 IT returns, Profit & Loss and IT returns, Profit & Loss and
years) month’s salary slips Balance Sheet Balance Sheet
Bank Statements Latest 6 months Latest 6 months Latest 6 months

FAQs – Home Loans

a. What is a Home Loan?

Ans: Home Loan is a secured loan given by a financial institution against the security/hypothecation of an
underlying property. In the event of failure to repay by the borrower, the FI can, subject to laws of India,
attach/sell the underlying property and recover the principal amount and any outstanding interest
thereon.
A home loan can be availed for buying an under-construction property, resale property or even to
construct a house on a vacant piece of land.

b. What are the benefits of Home Loan?

Ans: Some of the benefits of the Home Loan are:

• Flexible repayment solutions

• Lower home loan interest rate
• Tax benefits
 • Door to door services.

c. What is the maximum time available for repayment of the loan?

Ans: You can take up to 30 years to repay your housing loan

d. What is the maximum amount that can be availed in Home Loan?

Ans: You can apply for Home Loan from ₹ 5 Lakhs to ₹ 2.50 Cr.
The maximum amount is subject to 80% of the market value of your property

e. What is the interest rate for Home Loan?

Ans: Interest rate ranges from 6.99% to 12% based on the various factors like your income, age,
qualifications, number of dependants, spouse’s income, assets, liabilities, stability and continuity of
occupation and savings history are taken into consideration.

f. Can I choose fixed rate over floating rate?

Ans: In general, FIs give you flexibility to decide whether to opt for Fixed Rate Home Loan for the initial
term of three years which will get auto converted into Floating Rates at the end of three years.

g. I have not taken full amount for an under construction property, what are the available EMI
payment options?
Ans: As per the under-construction contract, you will be required to take the disbursal in tranches (i.e. as
and when the builder demands funds on completion of specified slabs of the building).
Simple Interest on your tranche payments, for up to two years, is chargeable on a monthly basis till the
property reaches a specified stage as agreed upon between the parties.
On completion of this stage, the regular EMI option is activated.

h. After how many days of sanction is the home loan disbursed and what is the procedure of payment
for outright purchase of house and for under construction house?
Ans: Home Loan is disbursed in full for outright purchase of ready-to-occupy property, as soon as all the
formalities are completed and the sanction conditions are met. For under-construction project, the
disbursement will be in instalments, based on the construction stage/level.

i. Why is the rate of interest higher in Loan Against Property as compared to Home Loans?
Home loans are meant for the special purpose of providing housing facility to individuals at affordable
costs. Whereas through Loan Against Property, funds could be raised for business/personal purpose,
generally targeted at business expansion/infusion of working capital in the current business or to meet
personal requirement

j. Can I reduce my home loan tenure in case of rate hike?

Ans: You can reduce your housing loan tenure by:

• Increasing your EMI

• Making a part pre-payment of your housing loan, or

 • A combination of these two (step 1&2)

To reduce your loan tenure, please visit the nearest loan serving branch of the respective Financial
Institution. After the change in EMI, you should submit new Electronic Clearance Service (ECS)
mandate/Post Dated Cheques (PDCs) with the updated amount.

k. What is the application/processing fee for a Home Loan?

Ans: The processing fee for a Home Loan may vary, but it will not exceed 2% (by the financial institution)of
the total home loan amount.

l. Can I take a Top-Up Loan on my Home Loan without any additional security?
Ans: You can take a top-up loan on your Home Loan once your eligibility meets the respective financial
institution’s predefined terms and conditions.

m. Am I eligible for a Home Loan?

Ans: To be eligible for a Home loan, you should be above 24 years of age at the time of borrowing and 65
at the time of completion of the Home Loan. If you are a salaried individual, you should earn at
least ₹30,000 per month and have a minimum of two years of experience. In case you are an entrepreneur,
you should have three years of experience in your current field.

n. What are the documents required for processing a Home Loan?

Ans: We only need some basic documents to process your Home Loan. Here’s a handy guide to keep in
mind.

Passport, Driving License, Life Insurance Policy, Birth Certificate,

Age Proof (Any one)
PAN Card, School Leaving Certificate.

Identity Proof (Any one) Passport, Driving License, PAN Card, Voter ID.

Utility Bill, Bank Statements, Property Registration Documents,

Residence Address Proof (Any one)
Property Tax Receipt, Voter ID.

Employee ID Card, Appointment Letter, Letter from employer on

Office Address Proof (Any one)
official letterhead.

Income Proof for Salaried Individuals Salary slips for the last three months, appointment letter, yearly
(Any one) increment letter, certified true copy of Form 16.

IT returns for the last two years with supportive documents,

Income Proof for Self-employed
Business profile on letter head, Registration certificate for
Individuals (Any one)
business commencement.
 Pay slips for the last six months along with employment stability
Income Proof for NRIs (Any one) documents such as appointment letter/previous employment
history.

Bank Statements for Salaried Individuals

Bank statement for the last six months from the salary account.
(Any one)

Bank Statements for Self-employed Operative current account statement for the last six months, Bank
Individual (Any one) statements for the last six months of CC/OD facilities, if taken.

Bank Statements for NRI Applicants Overseas salary account details for the last six months, Indian
(Any one) NRE/ NRO account statements for the last six months

NRI applicants should submit Credit Report of their current

Credit Report for NRI country of residence where ever it is applicable as per Tata Capital
norms.

Details of Existing Loan Existing loan details should be provided through bank statements.

To be issued from the salary account for Salaried customer or the

Processing Fee Cheque
business account in case of Self

Please provide Aadhaar card details as part of know your

Employed customer
customer (KYC) document.

o. Who can be my co-applicants for the Home Loan?

Ans: You can include your spouse, parents, children, siblings as a co-applicant for the Home Loan. We
consider his/her income to enhance your home loan eligibility

p. What are the additional benefits available for a Home Loan borrower?
Ans: Income tax benefits and insurance benefits are made available to the Home Loan borrower.