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Quiz: Test your home loan knowledge

Last updated on: November 23, 2011 16:43 IST

Quiz: Test your home loan knowledge

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Salil Dhawan, Investment-mantra.in

How well do you know your home loan. Take this quiz and find out.

1. What is full form of EMI?

a. Equated monthly installment
b. End monthly installment
c. Extracted monthly installment

Courtesy: Investment-mantra.in


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Quiz: Test your home loan knowledge

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2. What is the maximum percentage of the total cost of property that banks provide loan for?

a. 100% of the asset value
b. Approximately 75%-85% of the asset value
c. Approximately 40%-50% of the asset value


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Quiz: Test your home loan knowledge

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3. Can you repay your home loan ahead of schedule?

a. No
b. Yes
c. Only some lending institution provide this option


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4. Interest rates are at an all time high. What options do you have as regards adjustment in your home loan?

a. Making a prepayment to reduce the principal
b. Increasing the EMI and/or Increasing the EMI
c. All of above or combination of any


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5. Can one take a home loan for construction in a city while working in another city?

a. Yes
b. No
c. Only some lending institutions provide this option


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6. What is true about fixed rate of interest in the context of home loan?

a. Interest rates remain unchanged for the entire duration the loan.
b. One doesn't benefit, even if the rates of interest drop in the market and/or one knows in the beginning only how much EMI one needs to serve for entire tenure of loan without worrying about any interest rate volatility.
c. All of the above


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7. What is true about floating rates of interest in the context of home loan?

a. This is the rate of interest that fluctuates according to the market lending rate and/ or one gets benefitted if the rates of interest drop in the market
b. One gets benefitted if the rates of interest drop in the market.
c. All of the above


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8. Generally what factors does a home loan lender take into consideration while processing home loan application?

a. Loan seeker's income, age, qualifications, repayment capacity
b. Loan seeker's credit history
c. All of the above


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9. Can tax benefit be availed on principal and interest components of a home loan?

a. Yes
b. No
c. Only in some particular cases


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10. What do you mean by term 'Margin' in the context of home loans?

a. It is the down payment buyer needs to pay at the time of purchase
b. It is same as EMI.
c. It is difference between floating interest rates and fixed interest rates on home loans.


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