This Father's Day,

Papa Ke Financial Sawalon
ke Jawab Paiye.

Fathers And Questions

Fathers And Questions

FAQ (Fathers and Questions)

From understanding credit scores to figuring out loan eligibility, fathers often have questions about the new ways of borrowing and lending.

That's why L&T Finance is reimagining the humble FAQ section as Fathers & Questions, bringing common lending-related queries and answers together in one place.

Common Lending Queries

Quick answers to everyday questions around credit score, eligibility, repayment, and loan options.

Everyone talks about credit scores these days. How important are they for getting an SME loan?

While a score above 750 is generally considered strong, the minimum required score may vary based on the loan product and internal risk assessment.

Does it make sense to close a home loan before the tenure ends?

The most common reasons include:

Financial windfalls (bonuses, inherited funds).
Reducing financial burden.
Availing better opportunities by clearing liabilities.

What kind of interest rate can I expect on a personal loan today?

At L&T Finance, current Personal Loan interest rates start from 11%* per annum, but the final rate depends on your creditworthiness and loan specifics.

What should I know about how lenders decide the interest rate they offer?

Interest rates are determined based on your credit score, income profile, and repayment history.

Can I repay my home loan ahead of schedule?

Yes, floating-rate Home Loan holders may prepay partly or fully without foreclosure charges, subject to terms and conditions. Fixed-rate loans may attract penalties as per the applicable fee schedule.

Does using an EMI calculator mean my loan will get approved?

No. The EMI calculator provides only an indicative estimate of loan repayments based on inputs. Loan approval depends on various other factors like credit score, income, documentation, and lender's evaluation.

What documents are required to get a personal loan these days?

To meet the Personal Loan requirements, applicants must provide a Personal Loan documents list with valid ID proof (Aadhaar, Passport, Voter ID), address proof, PAN card, and recent bank statements. Salary slips are essential for salaried individuals, while self-employed applicants need proof of income. These documents required to get a personal loan vary slightly based on employment type.

If I move from a salaried role to working independently, would the documents I need for a loan change?

Salaried applicants primarily need employment proof (salary slips, Form 16, bank statements showing salary credit). Self-employed applicants must provide business-related financial documents, including ITR with computation of income, audited balance sheets, and Profit & Loss accounts for the last two years. Both groups require standard KYC (ID and Address Proof) and property documents.

Are there any hidden charges I should watch out for Personal Loan Balance Transfer?

L&T Finance does not have any hidden charges. The lender ensure complete transparency and provide a detailed Key Fact Statement (KFS) to the customer outlining all fees and charges before sanctioning the loan, in accordance with RBI guidelines.

Can anyone opt for a balance transfer facility?

Any borrower who meets the eligibility criteria set by the new lender can opt for the balance transfer facility. This includes meeting the age, residency, and income criteria specified in the Eligibility section above.

Do I need to visit a branch, or can I submit all my documents online for a personal loan?

L&T Finance allows fully digital submission of documents needed for a personal loan, making the process faster and hassle-free.

If interest rates change, will my EMI or loan tenure change too?

Tenure changes are the default when the interest rate changes. However, the EMI may be revised if required. Notifications about such changes will be communicated accordingly.

What is the difference between principal loan amount and the interest in EMI?

The principal loan amount refers to the original amount of money you borrowed, while interest is the additional charge applied by the lender for providing the loan. Each EMI payment consists of both principal and interest components.

If I make a prepayment of my Home Loan, can it reduce my EMI?

Yes, borrowers can reduce their EMIs after a partial prepayment while keeping the loan tenure unchanged. This offers monthly savings and better cash flow.

How much can I save by making an early loan payment?

The interest saved depends on the prepayment amount, loan tenure, and interest rate. Use an online prepayment calculator to estimate savings.

Should I prepay my loan or foreclose it entirely?

This depends on your financial goals. Prepayment reduces the principal amount, potentially lowering your EMI, while foreclosure finishes the loan

As I plan for the next phase of life, does closing my home loan early improve my credit profile?

Foreclosing a home loan usually improves your credit score because it shows you've honored your repayment commitments responsibly. Paying off a significant loan early reduces your overall debt, positively influencing creditworthiness and improving chances of eligibility for future credit.

What charges should I be aware of when taking a home loan?

These include processing fees, legal and technical evaluation fees, stamp duty, registration, and GST on services.

Apart from buying a house, what other benefits can a home loan offer?

Home Loan can help you secure the home you've always wished for. Additionally, it can also allow you to renovate, refurbish or redo your home, exactly the way you want.

When taking a business loan, are there costs beyond the interest rate that I should be aware of?

Business loan fees are non-interest costs that significantly affect the overall loan cost by increasing the Annual Percentage Rate (APR). The APR represents the true yearly cost of the loan, incorporating both the interest rate and all upfront and ongoing business loan charges.

Are there any tax benefits available on a personal loan?

Generally, there are no tax benefits associated with Personal Loan repayments. However, you may be eligible for certain tax deductions if the loan is used specifically for home renovation, business purposes, or investing in certain financial assets.

My daughter is exploring different career paths. Can a professional loan be used for education or business growth?

Yes, you can use a professional loan for business expansion, higher education, purchasing equipment, or other professional development purposes.

How long is the repayment tenure for a professional loan?

Professional Loan tenures range up to 60 months at L&T Finance.

If someone wants to expand professional endeavours, how can a professional loan help?

The purpose of a Professional Loan is to provide financial assistance to professionals like Chartered Accountant (CA), Company Secretary (CS) or Cost and Management Accountant (CMA) for business expansion, working capital, office setup, renovation, and other business-related expenses.

How can I repay a professional loan?

You can repay your Professional Loan through monthly EMIs. L&T Finance offers multiple repayment options, including ECS, post-dated cheques, and online payments.

Who are eligible to apply for a Gold Loan?

Any Indian Resident between 18-65 years of age, with valid KYC documents (Proof of Possession of Aadhaar Number, PAN, etc.) can avail the Gold Loan, subject to other eligibility requirements.

What is the maximum personal loan amount I can apply for?

The maximum amount for a Personal Loan you can get with L&T Finance is up to ₹30 lakhs*.

These days, my children seem to use loans differently from the way we did. What are some common reasons people take personal loans?

A Personal Loan can be used for multiple purposes. It includes debt consolidation, medical expenses, home renovation, education, weddings, travel, consumer durables and many more.

Still have a question?

Explore loan-related resources and financial insights on the L&T Finance website.

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For every Father who has ever said

“Just one more question”