Your questions (Credits): Mortgage loan to be repaid in advance? You must return the PMAY grant

By Chaitali Dutta

I took a home loan for Rs 12 lakh and applied for PMAY. I want to repay Rs 3 lakh in first year apart from regular EMI to reduce interest expense. Is it possible to refund like this?
—Rahul Hire
Yes, it is possible to prepay your mortgage if you have used PMAY. However, you will have to return part of the grant you received. This will be calculated according to the reduced duration of your loan.

My relative, who had a PPF account, recently passed away. His nominee does not wish to immediately withdraw the amount from the PPF account. What are the rules for further accrual of interest on the deposited amount, account closure, etc.
—Amar Nath
The bank must be informed immediately of the death of the depositor. All deposits to the PPF account will stop immediately. Until the documents for claiming the balance of the PPF account are completed by the agent, the balance will continue to earn interest. It is advisable not to leave the balance in the PPF account long after the death of the depositor, as the trustee is only the trustee of the monies and not the rightful owner.

When transferring currency to children for any of the purposes permitted by the RBI, can the remitting bank ask for proof of purpose or is the purpose statement sufficient?
— Rajiv Kaushik
In accordance with FEMA rules and existing banking procedures, the remitter’s declaration is sufficient. However, if the amount is close to the LRS limit for the person for that year, the bank may request additional proof.

I took a gold loan from an NBFC, but the interest rate is very high. Can I transfer the loan to a bank?
—Sanjeev Bisht
Transferring a gold loan has its challenges as the bank may not be able to sanction you a gold loan without inspecting your collateral. The NBFC will not unlock the ornaments/gold as the loan is still ongoing. The only way to make this exchange would be to take out a bridging loan through a personal loan. Here too, the personal loan will be more expensive than a collateral-backed gold loan.

The author is the founder, AZUKE Personal Finance Advisory (www.azukefinance.com). Send your questions to [email protected])

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