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Loan Interview Questions & Answers - Learning Mode
COOLINTERVIEW.COM LOAN INTERVIEW QUESTIONS QUESTIONS & ANSWERS - LEARNING MODE

Loan Interview Questions & Answers - Learning Mode

A loan is a debt provided by an entity (organization or individual) to another entity at an interest rate, and evidenced by a promissory note which specifies, among other things, the principal amount of money borrowed, the interest rate the lender is charging, and date of repayment. A loan is the act of giving money, property or other material goods to a another party in exchange for future repayment of the principal amount along with interest or other finance charges. A loan may be for a specific, one-time amount or can be available as open-ended credit up to a specified ceiling amount.

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Subcategories for Loan Interview Questions & Answers - Learning Mode

Following are sub categories for which Interview Questions & Answers are available under Loan Interview Questions & Answers - Learning Mode. Please select the appropriate sub-category:-

Business Loan Interview Questions & Answers (13) Learning Mode | Exam Mode

Car / Bike / 2 Wheeler Loan Interview Questions & Answers (20) Learning Mode | Exam Mode

Consumer Durable Loan Interview Questions & Answers (4) Learning Mode | Exam Mode

Credit Card Loan Interview Questions & Answers (51) Learning Mode | Exam Mode

Crowd Funding Interview Questions & Answers (3) Learning Mode | Exam Mode

Education Loan Interview Questions & Answers (13) Learning Mode | Exam Mode

Gold Loan Interview Questions & Answers (3) Learning Mode | Exam Mode

Home Loan Interview Questions & Answers (70) Learning Mode | Exam Mode

Loan against Securities Interview Questions & Answers (15) Learning Mode | Exam Mode

Loan for NRIs Interview Questions & Answers (9) Learning Mode | Exam Mode

Mortgage Loan Interview Questions & Answers (3) Learning Mode | Exam Mode

Overdraft Interview Questions & Answers (1) Learning Mode | Exam Mode

Peer-to-Peer Lending Interview Questions & Answers (4) Learning Mode | Exam Mode

Personal Loan Interview Questions & Answers (20) Learning Mode | Exam Mode

Reverse Mortgage Loan Interview Questions & Answers (3) Learning Mode | Exam Mode

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Loan Interview Questions & Answers - Learning Mode
Try Loan Interview Questions & Answers - Exam Mode
Question: What is Force Majeure clause in a loan?

Answer: Force Majeure Clause commonly known as money market condition clause in some loan agreements is an essential yardstick to consider before signing n any loan agreement. Under the Force Majeure Clause, a bank reserves the right to unfix or increase the fixed interest rates for your loan in the event of any unforeseen or some extra ordinary circumstances. Source: CoolInterview.com
Question: What does a bank considers default? Even one missed deadline for my home loan EMI puts me as a defaulter?

Answer: Different lenders have different definition for the world default. Each lending bank follows the definition of the world default as defined in the loan agreement. Depending on the lending bank, a defaulter can be defined as a term used when the borrower expires or is involved in any civil or criminal offense. A borrower is also considered as a defaulter in case of a cross default that is when the borrower defaults on any other loan provided by the bank or other lenders. Source: CoolInterview.com
Question: Is the new MCLR method used for personal loans or only floating loans?

Answer: Marginal Cost of funds-based Lending Rate (MCLR) is a new framework introduced by RBI for banks to replace the older benchmark rate or base rate system. There is no fixed rule for personal loans which have a fixed interest rate as mostly all floating rate loans were linked to the MCLR system. Some banks like SBI have however linked their personal and car loans to the MCLR system as well. Source: CoolInterview.com
Question: Do banks lend easily to women borrowers compared to male borrowers?

Answer: Banks have no such disparity although women borrowers may get a slightly lower rate of interest for various loans like home loans. Still, banks do provide special lower rates for women borrowers in many cases. Source: CoolInterview.com
Question: Does adopting of MCLR method by banks mean a lower interest for personal loans too?

Answer: The major impact of reduction of short term loans due to new calculation methodology will impact home loans, term loans to SME-MSME and mid-corporate borrowers. For personal loans the interest rate will still depend on the bank base rate and there may not be any major change in the interest rate unless banks change their base rate calculation method to MCLR. Source: CoolInterview.com
Question: I want to know about my credit score details. What are all the steps to get the credit score by mail?

Answer: You can directly go to the link at https://www.cibil.com/online/credit-score-check.do to access the CIBIL score request form. Fill in the from with your detail and make the payment of Rs. 500 as charges to ascertain your CIBIL score.

After successful payment you will be taken to an authentication page. Here the system generates 5 questions based on your submitted details and credit history. After successful authentication you will receive a confirmation message from the system. Once confi Source: CoolInterview.com
Question: Who gets OD facility under Jan Dhan yojana? Is it available for all account holders?

Answer: The overdraft facility is available to all account holders under the PMJDY scheme. The overdraft scheme entitles an OD up to a maximum amount of Rs. 5000.

The banks decide on which account holders to offer the OD facility taking into account their credit profile and usability of the bank account. So if you have a dormant account with no financial activity the chances of the bank offering you the OD would quite low. Source: CoolInterview.com
Question: Why banks are going after small loan defaulters while bigger defaulters are going scot free?

Answer: Rising NPA hurts the overall financial health of the banks. RBI has instructed banks to clear their rising loan defaults and as a result banks have become strict on all loan defaulters big or small.

If a debt recovery case is being considered in a DRT and there are other legal proceedings in various other courts, there are enough legal loopholes with no clear roadmap for such complicated cases. Since most big defaulters have court cases against various banks and other lenders it may appea Source: CoolInterview.com
Question: What is flat rate of interest?

Answer: Flat rate of interest is a way in which banks or NBFCs will calculate your loan repayment. Under the flat rate system your EMI will be calculated without taking into account any periodic payments made by you. So interest on your loan will be charged on the full loan amount throughout the loan tenure. EMI contains repayment made towards both interest and principal amount but a flat rate of interest calculations does not take that into account. An interest on reducing balance on the other hand is Source: CoolInterview.com
Question: What is Amendment clause in a bank loan? What do I need to check for any such clause in my bank loan agreement?

Answer: Amendment clause gives the banks or lending institutions a right to amend any conditions of the loan without informing you as a borrower. Legal experts believe that amendment clause has a big legal loophole as a lending institution changing the terms and conditions without seeking the approval of the borrower can be challenged in the court of low. If you notice any amendment clause in your bank loan agreement, the best way is to request the bank to cancel such a clause as it can lead to legal im Source: CoolInterview.com
Question: Just in case if the main borrower dies who has to repay the loan the other co borrowers or loan guarantor?

Answer: If the main borrower dies or is unable to repay the loan, the onus of loan repayment then lies with the co-borrower and not the guarantor. The guarantor comes into the question only when the original borrower or co-borrowers are unable to repay the loan either due to death or any other reason. Source: CoolInterview.com
Question: Someone told me to use my DTI (debt to income ratio) as a tool to choose between fixed and floating home loan. How can I do that?

Answer: You can use DTI as a yardstick to know if you can manage the fluctuating EMI repayment of your home loan. If your DTI is less than 30-35 then you are more likely to have the capacity to absorb the interest rate fluctuation of a floating interest rate loan. For example if you earn Rs. 50,000 per month and pay Rs. 10,000 as your car loan EMI, Rs. 5000 for monthly utility bills and Rs. 5000 as other miscellaneous expenses. This means your total monthly debt is Rs. 20,000. DTI can be calculated usin Source: CoolInterview.com
Question: Do non banking financial companies also check cibil and other credit reports?

Answer: Credit reports have changed the way banks and financial institutions operate. Credit reports give the financial institutions a deep insight into your financial track record. This helps them take a decision to offer you any financial services or not. Banks and non banking financial companies NBFCs both check various credit reports like one from CIBIL and a few others before approving any loan that you may apply for. Credit score is not only essential for loans like home loans and automobile loans Source: CoolInterview.com
Question: Are terms and conditions for loan guarantee negotiable?

Answer: The answer to your question is Yes and no. There are no individual centric terms and conditions but if you find any clause of the bank unacceptable, talk with the bank and the borrowers before signing the guarantor agreement with the bank. Ideally stand as a guarantor to only those people who you know are financially sound and will be able to repay their loans. Source: CoolInterview.com
Question: Is going for a spot loan a good idea?

Answer: Spot loans are good as they offer instant loans but then there is a catch. Most spot loans offer instant cash but you as a loan borrower do not get to know the terms and conditions for a loan. So unless you have some real emergency, spot loans should be given a second thought. Source: CoolInterview.com
Question: What should be an ideal range for DTI (Debt To Income Ratio)?

Answer: DTI or debt to income ratio gives out your gross income after deducting your debts like loan EMIs, insurance premiums etc if your DTI is less than 30-35 then you are more likely to have the capacity to absorb the interest rate fluctuation of a floating interest rate loan. DTI can be calculated using the formula, Monthly debt/monthly income*100. Strive for a DTI between 30-35 range for best results. Source: CoolInterview.com
Question: What is the ideal value for debt to income ratio? Why is it important?

Answer: A debt to income ratio shows the balance you maintain over your debt and income. Financial experts suggest a DTI ratio of around 35% as ideal although the lower your DTI number the better it is. A low debt to income ratio shows that you maintain a good balance between income and debt while a high DTI shows you have too much debt compared to your total income. Since Banks and NBFCs use DTI along with credit score to determine whether to offer or reject loans to potential borrowers, managing your Source: CoolInterview.com
Question: Isn?t it unfair that my credit score may get spoilt if someone I stood as a guarantor for defaults on his loans?

Answer: As per a supreme court ruling if a debtor defaults, it is the guarantor's responsibility to repay the entire loan. As a golden rule, avoid standing guarantor any loan obligation unless you are sure of the person's repayment credentials. A loan default helps no one especially in a situation where bank are already fighting high NPAs. So it is better to be safe than sorry so stand guarantee for only someone you know and trust completely. Source: CoolInterview.com
Question: Can you tell me what is meant by loan take over in simple terms?

Answer: A loan take over means transferring of your loan by approaching a new bank and requesting for a new loan which is equal to the outstanding amount with your current bank. You can use the loan to repay your current bank and continue your loan like home loan with the new bank as per the mutually agreeable terms and conditions. Loan borrowers opt for loan take over when changing their loans from one bank to other offering loans at a lower rate of interest or some additional benefits like top up loan Source: CoolInterview.com
Question: What is RBI Repo rate and how does it impact various retail loan interest rates?

Answer: Repo rate is the rate of interest at which the Reserve Bank of India lends money to various commercial banks in the country. Banks can borrow funds from RBI in case of any shortfall and pay back the principal amount along with an interest as per the existing repo rate. Repo rate is also used by authorities to control inflation.

The increase in repo rates means that the RBI would charge a higher rate of interest for all money given out to various commercial banks. The bank in turn charges Source: CoolInterview.com

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