A quick guide on home loan agreement clauses

Guide on Home Loan agreement – New Projects in Alibaug | Hiranandani Communities

A quick guide on home loan agreement clauses
Hiranandani Communities | 12 August, 2018

Home Loan Agreement

If you have availed a home loan, then as a borrower, you must not just sign on the loan agreement, but read it and be clear about the clauses and conditions laid in it.

Here are the important clauses which the borrower of the loan should be aware of:

  1. Clauses allowing amendments in the agreement: A loan agreement is duly signed by both the parties for the timely disbursal of the loan amount. Any change in the loan agreement by the lender is a complete breach of trust and is against the interest of the borrowers. A written consent must be sought by the borrower to alter any terms of the loan agreement.
  2. Clause relating to interest rates: Home loans come with fixed interest rate and fluctuating interest rates. Under this clause, it empowers the lending institution to alter the payable interest rate as per the fluctuations in the base rates. So, when the market rate increases, it allows the lending institutions to increase the rate in future.  Thus, they have the power to convert fixed rate loans to floating rate loans. Therefore, the borrower should be careful and ensure that the terms are as per the negotiations.
  3. Clauses which are not appropriate: Borrowers should be prudent while signing the loan agreement. The borrowers should carefully understand each and every clause and its implications. Any clause which is not understood or needs better clarity should be clarified before signing the agreement.
  4. Clause stating the definition of default: This is the clause wherein the lender defines what would be considered as a default and its implications of the same on the borrower.


There are other important clauses in the home loan agreement such as:

  1. Security cover clause where the lender may call for additional security to safeguard the outstanding home loan amount.
  2. Notification clause where the borrowers promptly needs to notify the lender about any change in employment or profession, address, income etc.

So prior to applying for a home loan, you need to know the above important clauses which must be read carefully and understood before signing the home loan agreement. If you are looking for some residential properties, you need to check out new projects in Alibaug, especially Hiranandani Sands. Hiranandani Sands, developed by Hiranandani Communities, lets you experience a lavish lifestyle by the sands of Alibaug.