Bangalore Sales Team

Know your Federal Home Loan

1) All You Need to Know About Home Loan Disbursement – Choose your Options Before
processing your Loan
Not all loans are of the same kind. It all depends upon the nature of the loan and the kind of
property being bought. For instance, in case of resale or ready−to−move−in property, the full and final
disbursement of the loan is made in one go. While for under−construction properties, only partial
loan disbursement is made, which means that money would be released in stages.
a) Pre EMI: Pre−EMI is the payment of interest applicable on the disbursed loan amount only.
This amount is paid in the period during which the house/ building is being constructed. It
ends once the construction is completed. Pre−EMI amount is lesser than full EMI amount
since only the interest portion is paid out and the principal loan amount remains intact. The
pre−EMI period is not part of the loan tenure. Pre EMI−Option is given to Under
construction Flat, Villa and House
b) Full EMI: Full EMI repayment of a home loan is the payment of principal as well as interest.
This payment begins once the construction of the house/ building is completed. We permit
commencement of full EMI payment while the loan amount is being disbursed in stages. If
you have opted for the pre−EMI payment option, EMI payment will commence once the
pre−EMI phase ends. By paying the full EMI, the interest is repaid, and the outstanding
loan amount will be reduced during the loan period.
c) Tax Benefits: Both Pre−EMI and full EMI repayment method for home loan enjoy the
same tax benefits. Tax deduction is not applicable during the under−construction phase.
However, once the borrower obtains the possession certificate, the amount paid as
interest (in pre−EMI or full EMI option) will be aggregated and is considered for tax
deduction in 5 equal installments.

2) Features of Federal Bank Home Extra Gain (OD)

• Overdraft Option Under Federal Bank Home Extra Gain Option: Home Loan can be availed as Overdraft
which helps in substantial savings in interest – No restrictions on quantum of advance remittance and
withdrawals. ( Not applicable for Under construction Housing Projects )*
1. Liquidity & Convenience: In this scheme, Home Loan a/c is linked to SB a/c of the borrower. Excess
remittance over and above the EMI made in the Home Loan a/c can be withdrawn any time using
all channels - ATM/ Cheque/ POS/ Fednet etc.

The Federal Bank Limited, Bangalore Home Loan

, team Floor, Halycon Complex St. Marks Road ,
Bangalore
1st 560001
CIN: L65191KL1931PLC000368 Phone: 9840767462/ 9080216650 Email: goutham@federalbank.co.in
 2. Savings in Interest Cost: Since the account is operated as an overdraft, interest is applied only for
the balance outstanding in the account. There are no prepayment charges for the extra amounts
remitted. Thus the customer can reduce the interest load on the housing loan by remitting extra
money to loan account without affecting liquidity.

Note: Commitment Charges will be levied if the Credit Limit Utilization is Less than 75%. Bank will be
Collecting 0.15% on the difference amount between Actual Utilization & Drawing Power centrally on a
quarterly basis.

3) Federal Bank has below Payment options for under construction Flat/Villa/House
a) Under Construction Flat/Villa of Approved Builder with Pre EMI-Servicing / EMI /
Repayment Holidays Option Payment Plans − 10.80.10 & 10.75.15 (Customer to bring 10%
of property cost during the booking and remaining at the time of possession)
b) House /Bungalow/Villa Self Construction − Customer to bring his Margin for every
milestone or Disbursement. For Example, Customer requests for 10L release for plinth level
construction. Customer should show proof of his margin of 20%. In the other words
Customer brings Rs 2L as his margin and bank will disburse Rs 8L from the loan account.

4) Repayment Holiday and Cushion Period

Purpose Cushion Period

Outright Purchase of ready built house/
flat
Flat / Villa under construction (where
there is a construction agreement)
All other construction cases
purchase of land for subsequent
construction of house
Up to 3 months from the date of first
disbursement.
Up to 36 months from the date of first
disbursement OR the completion date shown in
the construction agreement OR one month
after final disbursement, whichever is earlier.
Up to 18 months from the date of first
disbursement OR one month after final
disbursement, whichever is earlier.
cushion period up to 24 months to start
construction and another 12 months for
completion of construction

a) Interest Servicing Mandatory during cushion period: It is mandatory to service interest

during the cushion period in all Housing Loan schemes. In other words, Pre−EMI (PEMI) is
mandatory for all Housing Loan schemes with cushion period.
b) For Selected CAT A Approved Builder: Federal Bank will offer housing loans with repayment
holiday for both interest and principal amount up to 36 months or Possession whichever is
earlier as per below payment plan ,Interest accumulated during under construction period
will be amortized at the end of 36 months or possession whichever earlier and EMI will be
calculated for remaining tenure of the Loan. Further Customer have an option to make the
The Federal Bank Limited, Bangalore Home Loan
, team Floor, Halycon Complex St. Marks Road ,
Bangalore
1st 560001
CIN: L65191KL1931PLC000368 Phone: 9840767462/ 9080216650 Email: goutham@federalbank.co.in
 payments towards the Loan during Pre−construction period any no. of times. Repayment
Holiday (both No EMI & with Pre EMI) will be permitted only till the date of completion of
construction as per tripartite agreement/builder payment schedule. Loan insurance is
mandatory for EMI Holiday scheme for Entire Loan tenure.

5) NACH - The National Payments Corporation of India (NPCI) offers to banks, financial
institutions, Corporate and Government/s a service termed as “National Automated
Clearing House (NACH)” which includes both Debit and Credit.
a) EMI Payment: First EMI Recovery after NACH authorization, Some time it takes one−month
time. Hence in case of any NACH Debit delay we request to kindly remit the First EMI
directly to Home Loan/Auto Loan account one day prior to EMI Date
b) As per extant rules EMI must be remitted through NACH Debit and hence we request to
kindly Register the NACH for your Home Loan/Auto Loan. No request for Auto recovery
from Federal Bank will be accepted
c) NACH Debit Mandate will be normally registered with your Savings/Current account with
1.5 times to 2 times of your EMI in order to accommodate future increase in EMI due to
interest rate changes if any. After registering NACH, one will receive a message " Dear
customer mandate reference no: xxxx00000001233456 issued to Federal bank Ltd with
value ................................................................................................................................. and
frequency MNTH is received today for processing. In case of any issue please get in touch
with your branch"

6) Security Post Dated Cheques – Post sanction of Loan and during the Loan agreement
formality, Customer to submit 6 undated Cheques ( in CTS−2010 Format ) for security purpose
and additional three Cheques for registering the NACH debit Mandate with account payee
marked .

7) Deliverables

Deliverable Processing Turn Around Time (TAT)

Deliverable Type Physical Email
Welcome Letter Post Disbursement of Loan 5 Days after disbursement
List of Documents (Request to be given to
15 days −
the
Loan Branch )
Foreclosure Statement (Request to be given
15 days −
to the Loan Branch
Statement of Account (Request to be given
1 day
to
the Loan Branch
1 Day (If the Request is
Income Tax Certificate (Request to be
5 days placed through
given to the Loan Branch)
The Federal Bank Limited, Bangalore Home Loan
, team Floor, Halycon Complex St. Marks Road ,
Bangalore
1st 560001
CIN: L65191KL1931PLC000368 Phone: 9840767462/ 9080216650 Email: goutham@federalbank.co.in
 registered
Mail id to branch)

Conversion/Part Payment (Payment through

11 days
Cheque)
Handover of Original Property documents
Visit to Loan Branch. (Once the Loan 1 day −
account is closed same day the handover
of Original
documents would be done )

8) Prepayment charges & Foreclosure Charges: Nil for Home Loan with floating rate of
interest.

9) Interest Rate: RBI vide its notification dated 04th September 2019 made it mandatory for
Banks to offer Retail Loans as floating loans pegged to a chosen External Benchmark (EBM).
This requirement was mandatory from 01 October 2019. Federal Bank links Home Loan Rate
to Repo Rate will get reset as and when the Repo Rate gets revised/reviewed by RBI on a T+1
basis. Accordingly, rate of interest contracted for a loan linked to Repo will change effective
from the next day of revision of Repo Rate by RBI.

10) Calculation of interest: Federal Bank Interest Calculation is done on daily diminishing
balance
11) Intimation of change in Interest Rate: Interest Rate will be notified on the Notice Board of the
Bank and ƒor website of the Bank and no separate intimation/notice will be sent to the
Borrower(s).
12) Stamp Duty On loan taken in Karnataka: For Home Loan/Mortgage Loan taken in Karnataka,
Customer has to pay stamp duty of 0.20% plus 0.10% on Entire Loan Amount . In case of Under
construction Flat upon execution of Sale deed by the builder, Customer has to pay the Stamp
Duty applicable during applicable on entire sanction amount as per Stamp duty norms . Present
Karnataka Stamp duty Details
https://karunadu.karnataka.gov.in/karigr/Pages/−At−a−Glance−−Stamp−Duty−and−
Registration−Fee.aspx
13) Activating your Online Facility for your Home Loan Account
✓ Open www.fednetbank.com or install the fednet app
✓ select unlock user id button (below the login button)
✓ enter user id , mobile number and the captcha code( a number mentioned in red
color font − needs to be re entered in the corresponding field)
• enter the otp that is sent to your registered mobile number
• user id will be unlocked now
✓ Login with the user id and password provided in the welcome kit
✓ As per the prompt, change both the login and transaction passwords.
✓ After password change is done , login with the new password and the existing
The Federal Bank Limited, Bangalore Home Loan
, team Floor, Halycon Complex St. Marks Road ,
Bangalore
1st 560001
CIN: L65191KL1931PLC000368 Phone: 9840767462/ 9080216650 Email: goutham@federalbank.co.in
 user id
✓ system might once again prompt you to update the password− if so , update the
same once again
✓ Fednet will work only if email id has been registered in the account

14) Fed Book Selfie − FedBook Selfie is a convenient and secure mobile app, which displays your
Account passbook on your smartphone. Unlike any other banking application, you need not fill
in any application form. Just download Fed Book Selfie app and start using it. More Details on
Fedbook is available at https://www.federalbank.co.in/fedbook
15) Mobile Banking - Fed Mobile : Fed Mobile App is the mobile banking App offered by Federal
Bank. FedMobile offers over 100+ banking features and services to take care of your banking
requirements. From paying utility bills, school fee, mobile/DTH recharges to investment in
mutual Funds/ Insurance and a lot more can be done conveniently from anywhere, anytime
from your smartphone. More Detail available at
https://www.federalbank.co.in/fed−mobile−mobile−banking

16) What all Documents to be submitted by me after the Loan is sanctioned and disbursed

a) Resale or Outright House/Bungalow/ Land purchase and construction -Original Sale

Deed Copy along with all Mother Deed of the property, Approved Plan, Building
permission and EC for 30 years
b) In case of the Flats/Villa purchased from Approved Projects − Sale & Construction
agreement, Sale Deed and NOC from Builder if applicable, Assignment agreement and
MOU if applicable
c) In case of the Flats/Villa purchased/Resale from Non Approved Projects − Sale &
Construction agreement, Previous Sale Deed/New Sale deed and NOC from Builder if
applicable . Assignment agreement and MOU if applicable
d) Flat/Villa/House Latest Khatha in Borrowers Name − Submit Original Individual
Flat/House A Khatha within 3 Months Loan disbursement. Kindly follow up with your
Builder / Seller for Khatha Transfer . In case if Khatha transfer is getting delayed then
please inform the Loan Branch .
e) Property Tax Receipts − Ensure the property Tax is transferred in the individual Name once
the Sale deed is completed from Seller/Builder. Every year Payment of Property Tax is
mandatory, Post payment it needs to be submitted to the Loan Branch every year till the
tenure of Loan.

f) Property Insurance − In Federal Bank Property Insurance is Mandatory as per our policy. For
Under construction Flat /Villa, Insurance to be done once the possession of the Property is
given to the Customer. Customer must insure the Flat with Bank clause.

The Federal Bank Limited, Bangalore Home Loan

, team Floor, Halycon Complex St. Marks Road ,
Bangalore
1st 560001
CIN: L65191KL1931PLC000368 Phone: 9840767462/ 9080216650 Email: goutham@federalbank.co.in
Insuring your Loan

Insurance is not a compulsion but the necessity. One of the key reason for low penetration is the lack
of knowledge about the importance of Insurance. A good financial planning fails if the person is not
insured. Therefore, experts recommend that Insurance should be an integral part of Financial
Planning.

Let us share an example of Person A died in an accident. He planned well for kids
education, marriage, retirement, etc. Unfortunately, he opted for few traditional policies
i.e. endowment plan and money back policy. His wife is a housewife. Now the entire
financial planning goes for a toss as his wife had to dip into goal−based investments like
education, marriage, etc. to manage household expenses & clear loans. Why experts
suggest insurance equivalent to 10 times annual salary & to cover liabilities so that in a
case of an unfortunate event, the family can handle household expenses. In this case,
the goal−based investmentsƒfinancial planning remains intact.
Why Home loan insurance?

Home loan insurance is a plan that covers a borrower's outstanding loan liability to hedge the risk of
loss in case he/she dies during the loan re−payment term. These policies offer a cover two Options

1) Level Death Benefit Cover- Under this option, the death sum assured and hence the death
benefit remains constant throughout the cover term.
2) Reducing Death Benefit −Under this option, the death benefit for the member decreases as
per the benefit schedule. A benefit schedule (i.e. the table reflecting the death benefit
during each cover month of the cover term) is generated at the outset and provided in the
certificate of insurance. Benefit schedule can be generated for interest rates ranging from
1% to 20% per annum.
3) The insurance premium broadly depends on four conditions:
❖ Age: The older you are, the higher the premium.
❖ Amount: The larger the loan amount, the higher the premium.
❖ Tenure: The longer the repayment period, the higher the premium.
❖ Medical record: The better the health, the lower the premium
4) The applicant can either pay the premium himself or get it funded by the Bank .
5) Typically, home loan insurance policies have a single premium option, instead of regular
annual payments.

Federal Bank is tied up with IDBI Federal Life Insurance, TATA AIG, MAX BUPA and HDFC ERGO of
Loan & Property Insurance. You can choose from our channel Partner for securing you loan. Note:
Premium can funded by Bank and which can be repaid in Installment along with your Loan EMIs

All About Property Insurance

The Federal Bank Limited, Bangalore Home Loan

, team Floor, Halycon Complex St. Marks Road ,
Bangalore
1st 560001
CIN: L65191KL1931PLC000368 Phone: 9840767462/ 9080216650 Email: goutham@federalbank.co.in
A Home is believed to be one single biggest asset for any middle−class family during a lifetime. The
emotional value and memories attached to it are ‘Priceless’. In layman terms, home insurance
hedges the risk of any loss or damage to the structure of your home because of natural calamity, fire,
etc. You may also opt to insure the valuables like jewellery, appliances, and other contents with this
plan.

1. The Property is mortgaged: The average home loan tenure in India is around 8 years. Assuming Mr
X earn Rs 1 Lac per month and my home loan EMI is 50k per month. As a borrower, Mr X is just
meeting his ends or managing household expenses. If god forbids and in the case of natural
calamity, it will be a triple whammy for him as a borrower.

In such a scenario, he need to shell out minimum Rs 2,000 per square (sqft) feet in the metro city
towards the cost of construction. On top of it, the loss of contents, etc. will cost another 10 Lac
minimum. Therefore, for a 90 Lac flat measuring 1750 sqft, he need to shell out approx half the
amount i.e. 45 Lac towards restoration. Please remember, besides this expense he must continue
paying Home Loan EMI of 50k per month.

Whether a bank will give him a concession on home loan repayment? The answer is NO. At most, He
will get EMI holiday of 3 months but what next. he will not be able to avail another loan as the
property is already mortgaged. Will he be able to arrange 45 Lac at such a short notice? The answer
for a middle−class family is no. Lastly, he might need to shell out rent during the construction
period.

The situation will be alarming, isn’t it? I.e. he will bear the cost towards restoration, pay home loan
EMI, and rent. Therefore, it is financially wise decision to opt for home insurance especially if the
probability of a natural calamity is high. Besides probability, there is always a hidden risk. For
example, no one ever anticipated floods in Chennai. Fires Incidents are common due to short circuit
and one such incident Is posted below , https://www.deccanherald.comƒcity/life−in−
Bengaluru/realtor−s−bungalow−gutted−in−fire−725181.html

Lastly, under the home loan agreement, it is mandatory to avail home insurance cover.

2. Financial Planning In a normal scenario, the real estate constitutes more that 50% of the
financial portfolio. It’s a different matter that people don’t consider it in their calculation because
then other investments look petty in comparison :). As it is a huge investment, therefore, it forms an
integral part of financial planning. Different people having different reasons for real estate
investment. Some of the common examples are

(a) Retirement Planning: To generate regular rental income

(b) Financial Goals: One of my friends has 3 properties and each of them is linked to one financial
goal. For example, Property A for children’s higher education, Property B for Marriage etc.
(c) Inheritance: Some people would like to leave an asset behind for their legal heirs. Besides Gold,
property is one of the popular choices.

The Federal Bank Limited, Bangalore Home Loan

, team Floor, Halycon Complex St. Marks Road ,
Bangalore
1st 560001
CIN: L65191KL1931PLC000368 Phone: 9840767462/ 9080216650 Email: goutham@federalbank.co.in
In the case of any calamity, this financial planning may go haywire. Therefore, home insurance
indirectly helps to hedge risk against your financial goals/financial planning.

3. The cost of Home Insurance Cover: Like a term insurance cover, home insurance is one of the
cheapest must have covers. You may opt in or opt out of various add−ons depending on the
probability of the event and your requirement. For example, if you stay in an independent house
then you should insure home contents, jewellery, appliances etc.

Lastly, you can save on premium cost by opting for the long tenure of up to 20 years else you may
end up paying the higher insurance premium. Another misconception is that if I have rented my
property then I should not buy the home insurance cover and save the premium. Please note that in
such cases, you may opt for only building/structure cover. You can exclude content, jewellery or
household articles etc.

Home Insurance for under construction property: Please note that till you receive possession of the
property, the 100% risk is builders only. In most of the cases, builders buy insurance cover to hedge
risk. Therefore, it is not advisable to buy home insurance cover for an under− construction property.
In Federal Bank for Under construction Builders Flat/Villa Property Insurance is to be taken once the
possession of the Flat/Villa is given to the customer

Read and understood

1) Applicant …………………………….

2) Co Obligant /Co Applicant ………………………….....

3) AMPSB/ Relationship officer signature ………………………………

The Federal Bank Limited, Bangalore Home Loan

, team Floor, Halycon Complex St. Marks Road ,
Bangalore
1st 560001
CIN: L65191KL1931PLC000368 Phone: 9840767462/ 9080216650 Email: goutham@federalbank.co.in