Before understanding the PSD conditions in home loan, it is important you first understand who the Credit manager is and what is his role. The credit manager has the vital role in the loan approvals. He is the one who is responsible for conducting the personal discussions, decides on your home loan eligibility, and thereby approves or rejects your home loan application. He is the one who reserves the right to put PSD conditions in your home loan application.
What is PSD & PSD condition?
In the home loan mortgage industry, PSD means the personal discussion sheet. The credit manager who conducts the personal discussion (PD) with the borrower maintains this sheet with his remarks made over the conducted PD. The credit manager can either conduct the PD telephonically or by in-person visit to the borrower. The credit manager has to comply with the bank’s norms and conditions and therefore at-times imposes special conditions for approving the loan depending on case to case. Such special conditions so applied for the approvals are called the “PSD Conditions” in the home loan industry.
These conditions are mentioned on the home loan sanction letter, which means that the loan is approved but subject to the fulfilment of the conditions, for the disbursals. Before disbursement the home loan borrower is expected to meet these specified conditions.
Given below are some of such PSD Conditions of the banks:
1) Mandatory account opening.
Many lender Banks/NBFCs/HFCs insist on opening an account in their bank for servicing the home loan EMIs.
2) Opening Fixed Deposits with the bank.
3) Mandatory salary credit for the borrowers who have newly joined.
4) CA certified investment proof especially in case of self-employed borrowers.
5) Registered Mortgage of the property.
6) Repayment of EMI from the same bank’s account.
8) Co-applicant addition to the loan.
Please Note: PSD conditions may differ from case to case and from bank to bank.
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