YOUR QUESTIONS (LOANS): Can you repay the loan of your deceased brother early from your own funds?

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The outstanding loan can be repaid from your funds by writing a crossed out check in favor of your personal loan account with the bank.The outstanding loan can be repaid from your funds by writing a crossed out check in favor of your personal loan account with the bank.

By Chaitali Dutta

Last month I lost my brother to Covid. Last year, he had a personal loan of 5 lakhs, for which he regularly paid EMI. Can I prepay the remaining amount from my bank account and what is the procedure?
– Rajiv Kumar
In the case of a loan to individuals, banks sometimes call on the guarantor to repay the outstanding loan if the borrower dies. Here, in this case, it is not clear whether you gave a guarantee on your brother’s personal loan. The outstanding loan can be repaid from your funds by writing a crossed out check in favor of your personal loan account with the bank.

This month I will complete my EMI home loan repayment. Will the bank call me to hand over the documents, or will I need to submit a request. Also, will I be asked to pay any other amount at the time of transfer of my documents?
—Indronil Sen
Upon completion of the loan, you need to apply to the bank for a letter of closing the loan, original documents for real estate, a letter of refusal of a mortgage loan, a certificate of interest for the current financial year, etc. The obligations of the borrower are only the outstanding loan, and if this amount was fully paid, there are no other costs associated with closing a loan account or collecting your original documents.

We have a plot of land in the name of my late grandfather. My father is retired. Can I get a bank loan to build a house on land?
– Arun Murtat
The land must be in your name before you start building. Obtain a certificate of succession in your father’s name from the district authorities. Later, your father can give you this land, and you can start building on it.

I took out a loan in 2019. My lender said I was eligible for the PMAY subsidy. I have now made three installments and reduced my tenure. Am I eligible for the PMAY subsidy? If so, will the amount be reduced?
– Prashant Dhyani
If I understand correctly, the subsidy is already credited to your account, in which case your EMI would be reduced. The amount of the PMAY subsidy is directly related to the original loan duration. If the loan is prepaid, then the PMAY grant for the unexpired term must be reimbursed on a pro rata basis.

The author is the founder of AZUKE Personal Finance Advisory (www.azukefinance.com). Send your inquiries to fepersonalfinance @ expressindia.com

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