BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Difference between the total purchase value and the loan amount
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First EMI of the loan amount
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Last EMI of the loan amount
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None of the above
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Detailed explanation-1: -For example, you want to buy a house for Rs 50, 00, 000. You would make a down payment of 20% or Rs 50, 00, 000 * 0.2 = Rs 10, 00, 000. The bank would sanction the home loan of Rs 40, 00, 000. You have processing fees of 1% of the loan amount or Rs 40, 00, 000 * 0.01 = Rs 40, 000.
Detailed explanation-2: -The loan amount differs from the purchase price because most lenders won’t give you 100 percent of the sales price. We’ll use our $150, 000 sales price example from above. Traditional lenders or banks will typically give you 80 percent of that amount, so $120, 000 if you live in the home as your primary residence.
Detailed explanation-3: -Calculated as a percentage of the total price, a down payment is a difference between the loan amount and the value of the purchase. The higher the amount of the down payment the lesser the rate of interest and equated monthly installment (EMI) amount.
Detailed explanation-4: -As mentioned before, a down payment is a lump sum payment made when buying a house, car, or an expensive product. Borrowers use their personal funds and pay it with a cash down payment, a cheque, a credit card, or an online transaction. Down payments are frequently, but not always, required to secure loans.