If the borrower does not delay the payment of the loan to the financial institution such as banks, housing finance companies or NBFCs, the borrower reserves the right to pass on your personal data to third parties of their choice for the purpose of repaying the loan. There are many borrowers who are not aware of such a clause and who get angry when they receive calls from third parties asking for tax refunds. To avoid litigation, here`s a closer look at some of the terms of a home loan and what they actually mean. Advances: A borrower should ensure that he or she has some flexibility to pay advances (early repayment of the loan) without paying any additional fees if possible. However, advances are only allowed at the end of interest periods, which avoids the payment of breakage fees and, in most cases, is in the best interests of the borrower. Particular attention should be paid to all mandatory advances (for example. B in the event of a sale or, for private companies, on a float) as well as at any down payment costs to be paid. There will also be delay provisions for breaches of the convention itself. They may grant time for remedial action on the part of a borrower and, in any event, apply only to substantial infringements or violations of the main provisions of the agreement. The provision for non-payment usually includes additional time to cover administrative or technical difficulties. Insolvency defaults should also provide reasonable time frames and include appropriate waivers for solvent restructurings, with the lender`s agreement. Representations and guarantees: these should be carefully considered in all transactions.
It should be noted, however, that the purpose of insurance and guarantees in a facility agreement differs from its purpose in purchase and sale contracts. The lender will not attempt to sue the borrower for breach of representation and guarantee – instead, it will use an infringement as a mechanism to call a default event and/or ask for repayment of the loan. A disclosure letter is therefore not required with respect to insurance and guarantees in the facility agreements. Particular attention should be paid to all „default cross“ clauses that affect the fact that a failure in one agreement triggers a standard between another. These should not apply to on-demand facilities provided by the lender and should include thresholds defined accordingly. The repayment clause is the next important clause in a real estate credit contract that needs to be addressed. The repayment relates to the partial payment and advance payment of the loan. Some banks offer a down payment or partial payment at no cost, while some lenders require a juicy amount in the name of partial payment or pre-closing fine. In a home credit contract, all of these clauses are clearly mentioned. Before you sign the repayment clause, you must rely on the lender`s rules and regulations for the repayment of the loan.