Important Tips: Bank Loans

1.  Negotiate with at least 10 banks.

2.  Request in writing the formalities to be complied by you for obtaining a loan.

3.  Obtain the copies of the agreements you have to execute and read them.

4.  Keep all documents in original and keep a recent valuation of the property prepared by a      certified Chartered Engineer/Qualified/Approved Valuer.

5.  Offer the security only necessary to cover your debt. (Banker's always try to secure more collateral securities than necessary to cover the debts)

6.  Give full and correct cash flow statement to convince the banker how you are going to pay your debt.

7.  Negotiate on fixed interest/floating interest with an eye on your short-term, mid-term, and long-term interest. (You can avail the help of a retired bank manager if needed).

8.  Remember always that the SECURITIZATION AND DEBT RECOVERY LAWS give ample powers      the banks and financial institutions and it is very easy for them to take possession of the properties and sell them and your options are very very limited in case of default in payment of your debt.

9.  Guarantors must be doubly cautious that in case of any default by the borrower, they shall be      proceeded against for the recovery of the amounts due to the banks/FIs as in the eye of law there is no distinction between the borrower and his guarantors.

10. Always keep a tab on your financial transactions with your creditors.

11. Always keep in mind your re-payment capacity.

Contributed by: asharaj53 @ gmail.com

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