The current scenario in India suggests that Entrepreneurship is booming in our country with only an approximate of 7% in the labor force who work in the unorganized sector. Majority of us are our own bosses and fall within the category of the self-employed, be it running our own business, cottage industries or even small shops. With this changing dynamic in the employment sector, financial institutions and banks are now coming up with customized plans and tailored home loans specially designed for this self-employed sector. DHFL is one such bank that offers exclusive home loans for the majority self-employed sector today where your income will no longer be assessed through the income tax authorities, but through an independent source.
Features and Benefits:
- Purpose of your Home Loan:This home loan has been made available for self-employed individuals, both professionals as well as non-professionals including doctors, small scale business people, architects, retailers, Chartered Accountants and many more.
- Term and Tenure:You can choose a flexible loan repayment tenure that ranges from 1 year and up to a maximum of 15 years. Your loan term usually cannot be extended beyond the retirement age of 60 years. But since you fall within the category of the self-employed, your term can be extended up to 65 years of age.
- EMI:With the option of flexible repayment of your loan and extended loan tenure, your EMI reduces significantly without hindering your everyday lifestyle. Your monthly expenses will not take a serious hit and you can comfortably continue living on your established living standards.
- RPLR and Interest Rate:RPLR stands for DHFL’s Retail Prime Lending Rate. The interest rate that will be applied on your home loan which will be based on this rate. The RPLR rate fluctuates from time to time depending on the current market conditions.
- Processing Fee:You will be charged the following amount for processing your application for a home loan –
- If you are a Self-Employed Professional (SEP) or a Salaried Individual (SAL) – You may be charged a fee of Rs. 5000 and up to Rs. 20000.
- If you are a Self-Employed Non Professional (SENP) – You will be charged 1.5%.
Note: The aforementioned values are exclusive of Cess and Service Tax. The same can be applicable on your home loan.
- Convenient Repayments:You are allowed the following options as modes of repayment for your loan. This is based on the EMI chosen on your Home Loan –
- Electronic Clearing Service – You can opt for your loan repayment through ECS, but this will depend on the standing instructions provided to your bank.
- Post Dated Cheques – If you choose PDCs as you method of loan repayment, they will be drawn to your salaried or your savings account.
- Applicant/ Co – Applicant Option:You can apply for a home loan as a sole applicant or have a co-applicant. However, having a co-applicant sign a loan with you can enhance the loan amount that you become eligible for.
- Simple Documentation Process:For a quick processing of your home loan application, you will need to submit the following documents –
- Documents related to your property
- Know Your Customer or KYC documents and
- Bank Statements/ Proof of Income documents as per the login checklist.
- You can avail a home loan of up to Rs. 100, 00,000. The minimum loan amount is Rs. 1, 00,000.
- The loan amount cannot exceed 60% of the property cost. This includes the registration fees as well as the stamp duty OR 60% of the market value, depending on which is lower.
- Your actual loan amount will be determined using several factors, some of which are listed below –
- Your Age
- Your Repayment capability
- Your Educational Qualification
- Your Assets
- Your Liabilities
- If you have a co-applicant, their income will also be taken into consideration
- The continuity and stability of your income
- The number of dependents
- Your saving habits and other factors
Documentation Requirements – KYC Documents, Self-Employed Businessmen and Self-Employed Professionals:
- Documentation for KYC:
- You can provide any one of the following documents for the verification of your ID (Photo ID Proof)
- PAN Card
- DL or Driver’s License
- Election Card or Voter’s ID Card
- You can provide any one of the following documents for the verification of your Address (Residence Proof)
- Telephone Bill
- Electric Bill
- Ration Card
- A Letter from your Employer
- Your Pass Book containing your address or a Bank Statement
- Documentation for Self-Employed Businessmen:
- KYC (Know Your Customer) Documents as mentioned above
- A copy of the latest 2 years Income Tax Returns of the applicant + An attested copy of income duty by a CA (Chartered Accountant)
- A copy of the latest 2 years Balance Sheet + A duly attested copy of Profit and Loss Account of your firm by a CA (Chartered Accountant)
- A brief profile of your business on your Business Letterhead
- Bank Statement of the latest 6 months for the following accounts – Current Account, Savings Account, O/D Account
- A copy of one of the following – VAT registration or another mandatory license, Shop and Establishment License, Registration or an old ITRs evidencing business
- A copy of one of the following, if applicable – Memorandum of Associations, Partnership Deed, Articles of Association
- A copy of one of the following, if applicable – Form 16 OR Tax Deduction Certificate
- A copy of one of the following, if applicable – Details of Contract
- A copy of the Self-Assessment Tax paid challan OR copy of Advance Tax paid
Note: For all the aforementioned documents, the original will also be required for the purpose of verification.
- Documentation for Self-Employed Professionals:
The same set of documents mentioned in the previous section are applicable for Self-Employed Professionals as well. However, the following are the additional documents that are required along with the documents mentioned above –
- A copy of your educational qualification certificate
- A copy of your Professional Practice
- Your Salary Certificate – This is applicable for doctors who have a salaried income
Fees and Charges:
Processing Fee for Home Loan
0.1% - 1% + Service Tax ( varies depending on case to case basis)
Upfront Amount – 0.5% of the loan application amount OR Min Rs. 5000 + Service Tax – whichever is lower. The balance processing fee will be collected before the disbursement of loan
Loan Application Form
Issuance Charge for Demand Draft/ Pay Order
Rs. 150 per Rs. 1 lakh or the actual Bank Charges (whichever is higher)+ Service Tax
3% + Service Tax. This applicable when the dwelling unit has not been constructed on the plot within 3 years from the date the loan was disbursed
Property Papers - Copy
Rs. 500 + Service Tax
No Dues Certificate - Copy
Rs. 250 + Service Tax
Loan Prepayment or Closure (full) statement charge
Rs. 500 + Service Tax
Personal Visit for collection of dues
Rs. 250 per visit + Service Tax
Varies depending on case to case basis
- Who can be my co-applicant?
A co-applicant is usually a co-owner of the property that you are offering as a collateral for the loan. However, not all co-applicants are co-owners. A co-applicant can be a father/son, husband/wife, brother-sister etc. who must also have a stable income.
- What is the meaning of EMI?
An EMI or Equated Monthly Installment means the amount that you owe to your lender every month until the loan amount is repaid completely. This amount includes a portion of the principal amount and interest that you will pay each month.
- Do I need a collateral of security to apply for a Home Loan?
For a DHFL loan, a collateral is not required but can be asked in exceptional cases. Usually, the property for which you apply for the home loan automatically becomes a collateral for the loan. There are other financial institutions that ask for additional collateral that can include FD receipts, life insurance policy etc.
- What is the loan tenure I am eligible for as a Self-Employed individual?
You can choose a loan repayment tenure starting from 1 year and up to 15 years. You can also extend your loan term up to 65 years of age as a self-employed.
- How long will it take for the approval of my Home Loan?
Depending on whether all the required documents have been provided by the applicant, the approval will take between 3 to 15 days.