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Your queries: Loans; No need to show ownership proof to get a gold loan

Your queries: Loans; No need to show ownership proof to get a gold loan

I had taken an education loan two years ago and now want to repay the full amount as the interest rate is high. Will the bank charge any pre-payment penalty and what are the documents that I have to collect from the bank?

By Chaitali Dutta

l My wife wants to take a gold loan from a non-banking finance company. Does she have to show receipts of the gold purchased over the years as some of them were received by her as gifts?
—Suresh Kumar

No, the ownership is not verified at the time of taking the gold loan. However, the gold will be vetted for its purity before the amount of the loan is finalised. The loan KYC and documentation have to be completed by the person desirous of taking the loan.

l I had taken an education loan two years ago and now want to repay the full amount as the interest rate is high. Will the bank charge any pre-payment penalty and what are the documents that I have to collect from the bank?
—Arvind Iyer

Yes, you may repay the loan. Usually, there are no pre-payment charges but check the agreement letter for any adverse clauses. You may also check with the bank directly. On closure of the loan, you will get a loan closed confirmation letter, and release of any security. Collect a no-dues certificate from the bank.

l I am taking a home loan and the bank is insisting that I take a life insurance and home insurance for five years. As I have term insurance, do I still need to take another life insurance cover?
—Vipul Awasti

The term cover you have should be adequate to cover the loan quantum as well. This is not a mandatory document. The cover of the property against fire and natural disaster is desirable as that is the collateral against which the bank is giving you the loan. It is eventually beneficial to you as well. It is advised to take the cover for the home.

l Can I, a registered power of attorney holder of my NRI son, invest sale proceeds of his two properties in 54 EC bonds on behalf of him and in his name? What is the maximum limit of such investment?
—S K Rao

The Power of Attorney could be a specific POA or General POA. If the POA document covers such reinvestment transactions then the POA holder may do the investment on behalf of the principal. The limit set for the Section 54 EC bond in a financial year is Rs 50 lakh.

The writer is personal finance wellness expert and founder of AZUKE Finance. Send your queries to fepersonalfinance@expressindia.com

Source : Financial Express