Ask Mint | ECS is an easy, safe way to make timely payments

Ask Mint | ECS is an easy, safe way to make timely payments

I received a letter asking me to avail of an ECS facility. Is it mandatory to do so and will there be any problem later?

The electronic clearing service (ECS) involves the transfer of funds (in your case, the equated monthly instalment, or EMI,) through an electronic medium and is fast gaining popularity as a preferred mode of payment.

Its popularity is because of the fact that today it is the safest and best way to make timely payments without any manual intervention.

Although not mandatory, it is advisable to opt for this facility because it will save you the hassle of making frequent trips to your lender for making payments and will also reduce the risk of any manual error, such as misplacement of cheques, delay in cheque deposits and credit.

As for your concern about any future complications, I do not foresee any. ECS is a voluntary service and you may choose to withdraw the service at any point in time after giving prior notice to your lender. The withdrawal process is similar to that of a cheque issued.

My son works in the US and wants to buy a property in my wife’s and my name. He wants to apply for a home loan for the property. Is that possible? Also, will the loan be treated as a non-resident Indian NRI loan?

He can surely take out a home loan for the property that he is buying for you and your wife. It is usually advisable that the main borrower should also be a co-owner of the property because it makes the loan process simpler, although it’s not a mandatory requirement.

You may check with the lender about this before registering the property because the internal policies of different organizations vary.

However, as property owners, you and your wife would need to be co-applicants for the loan.

To answer your second question, the loan will be treated as an NRI loan because your son is an NRI and it’s his income that is under consideration.

Renu Sud Karnad is executive director with HDFC Ltd

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