After spending a few years in Bangalore, I decided to relocate to Mumbai.
Not easy, I have to admit. It was a struggle making ends meet in the high-cost metro; I could barely save money.
So, when I reached the fag end of my twenties and decided to get married, I had virtually no savings.
It was at this juncture, last year, that a colleague convinced me to go in for a home loan.
Why a home loan is great
The best thing about a home loan is the tax benefits you can get. Living in rented apartments for over three years meant I had spent Rs 1,00,000 on rent and Rs 25,000 on brokerage. This money could have well been channelised into a home loan, which comes with tax benefits.
Moreover, after three years in rented apartments, one does get tired of consistently being on the go.
The sheer thought of owning my very own home gave me immense pleasure.
Working within my budget
With my meagre savings and small salary, I had to be content with an apartment in Vasai, a distant Mumbai suburb.
I managed to find one that cost me Rs 4,50,000 only. I was aware the home finance company would not put in the entire amount; I would have to make a down payment.
My father agreed to give me Rs 1,00,000 and I managed to come up with Rs 50,000.
So, now, I only needed a Rs 3,00,000 loan.
With such a low budget, I was sure I would get a loan. Unfortunately, that was not the case.
I approached ICICI Bank via their direct sales agent.
I was aware they had certain limits concerning the minimum salary and minimum loan amount.
I found I would not get a loan for an amount less than Rs 4,00,000. This was because the cost the home finance company incurs on loans less than Rs 4,00,000 does not make this a feasible option for them.
I was told that since I was not employed in a hot sector (I was an accountant in a private firm), I would have difficulty in obtaining a loan.
Then I approached the nationalised and cooperative banks -- Bassein Catholic Bank and Indian Bank to name a few. I came away with the impression that the loan process was complex and highly dependent on the whims and fancies of many people. The procedure and documentation amazed me.
I do not disagree with the economics of the home finance companies. I am sure they have their parameters. Moreover, I knew my salary too was very low; they did not have to tell me that.
What really amazed me was their attitude. I was a small borrower so no one seemed to care. Somehow, I got the impression they view small borrowers as potential defaulters.
No one came up with a solution; they just wrote me off. It was obvious they did not want to waste time on me. Often, they would say my file is being processed and they would let me know about the status later.
Light at the end of the tunnel
At this time, I came across a Dewan Housing Finance Limited newspaper advertisement saying it specialised in lending to those in the lower income brackets.
I decided to give my home loan attempt another shot.
I approached their office in Bandra, a suburb of Mumbai.
When I was told I could get a loan with no problem, I somehow could not believe it. I demanded to be introduced to the branch manager to verify their claim.
Gautam Mehra, the branch manager, was extremely courteous and convinced me they would give me a loan even before I began narrating my harrowing experiences.
I was guided through the entire process and realised they had loans for all categories of people (self-employed, salaried, including low income brackets and those with fluctuating incomes).
Their prospective borrowers covered a class of people other home loan players would tend to avoid -- postmen and painters, to name a few.
Basically this class was considered risky because the home loan company felt the chance of default could be high.
I got it!
Within 15 days of handing over the necessary documents, the disbursement cheque was handed over to the seller and I got possession of the property.
I bought my apartment the person who owned the home (it was a resale) in Vashi.
More than the fact that I got the loan, it was the service at DHFL that I was impressed with.
I guess the more prominent players would do well to learn some tips.
Note: These views are solely the author's and are not endorsed by rediff.com in any way.
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