Bad credit score? Go for a reverse mortgage against a property

Defaults for the MSME borrower segment have remained more or less constant in absolute terms.

By Chaitali Dutta

I don’t have a good credit rating and haven’t paid my income tax for two years. Now I want a mortgage on my commercial property. Will I be able to get a loan and what is the procedure?
—Mohammed Mustaquim
It will be difficult to get a mortgage in such a situation. Some NBFCs may consider a loan, but the interest rate will be significantly higher than the market rate. You can consider a reverse mortgage where your property is mortgaged to the provider, and the provider will pay you a fixed monthly payment for your living expenses. However, at any time, if you want to vacate your property, you must pay off the outstanding amount at that time in one go.

My child received a two-year vocational diploma in the United States and took out a loan from a United States bank. He is now working in India and repaying the loan. Can the Section 80E Tax Benefit be Claimed?
—Neeta Sharma
The deduction in section 80E relates to interest on loans taken out for higher education. The loan should be taken from a financial institution or charity approved for higher education purposes. Here we have to make sure that the University is an authorized educational institute. With regard to the bank, the article specifies that “financial institution” means a banking company to which the law of 1949 on banking regulation (10 of 1949) applies (including any bank or banking institution referred to in the article 51 of this law), or any other financial institution that the Central Government may, by notification in the Official Journal, designate as such. If these conditions are met, you will be able to claim the deductions.

I had taken out a loan from LIC HFL. The amount credited as a grant is much lower. It is Rs 89,000 against an eligibility of Rs 2.35 lakh. What will happen if I make a loan balance transfer?
—Sadeep Verma
Here I am assuming you are referring to the PMAY grant. The calculation of the applicable subsidy is done by the NHB and they have certain parameters to calculate it. As for the balance transfer, you will have to repay the amount of the grant prorated that will be unused to LIC HFL.

The author is the founder of AZUKE Personal Finance Advisory (
Send your questions to [email protected]

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