When it comes to taking a loan that is not slaved to a purpose like a home or a car loan, the first thing that comes to mind is a personal loan. But there is a serious limitation on these loans and that is the amount that can be borrowed. What happens if the loan you need is a big amount and a personal loan just can’t cover it? The answer can be SBI’s loan against a property. This loan also does not require that there be a specific purpose attached to the money being borrowed. The loan that SBI offers against properties can go from Rs. 25 lakhs to over Rs. 1 crore depending on certain conditions set forth by the bank. These loans can also be repaid over a comfortable period ranging from 5 years to 10 years. Another thing that these loans offer is complete transparency which means that there are no hidden charges levied.
There are various types of loans that the bank offer under the preview of loans against properties. Some of these loans are general loans against properties while other are more specific about the people who can actually take the loan. Even the approach to taking these loans can differ from one loan to another.
This is a simple loan that can be taken by providing a property to secure it. It is available to all property owners and has the following features.
This is a loan that can be taken by anyone who owns property in a city and is in need of money urgently. The main features of this loan are:
This is a loan that is meant mainly for those individuals who own commercial complexes or apartment buildings and want to take a loan against said property to be paid back through future income that will be earned from renting the place out to tenants. The salient features of this loan are:
There is a different technique that is used to determine the loan amount for each of the loans offered by SBI. There can be a variety of factors that can affect the loan amount and they can range from the city where the property is located, the income of the applicant and even the value of the property itself. Here is a general idea of how the following loan amounts are decided.
For a general loan against the property the amounts that can be borrowed are Rs. 25,000 to Rs. 1 crore but it is decided based on the following criteria.
For this type of a loan, the amount that can be borrowed will range from Rs. 25,000 to Rs. 2 crore. The maximum amount will vary based on the city where some cities will get a limit of Rs. 1 crore and others Rs. 50 lakhs. Other calculations that can be used to determine the amount can be:
In the case of rent plus loans, the maximum amount that can be borrowed ranges from Rs. 5 crore to Rs. 7.5 crore. The calculations that the bank may use to arrive at the amount that can be borrowed are:
There are certain eligibility criteria that need to be met for each of the loans on offer by SBI and these are:
The interest rate charged on these loans is calculated by adding an additional amount to the base rate being offered by the bank. The current base rate for SBI is 9.7% per annum which means that the interest charged is:
One thing should be kept in mind is that the interest rates are subject to banks regulations and can change without notice, hence it is always a good practice to check the current rates with the bank before applying for the loan.
The SBI loan against property calculator can be an invaluable tool in helping you understand the payments that will be made every month. The first step would be to collect all the information that will be need. This will be:
Assuming that you wish to go in for the loan and want to borrow Rs. 30 lakhs and pay it back over a period of 75 months (6 years). The interest rate being offered by the bank is 12.5% per annum and the processing fee is 2% of the loan amount.
For this loan the processing fee will be Rs. 50,000 since 2% of this amount is Rs. 60,000 which is Rs. 10,000 more than the maximum processing fee that can be applied to the loan. Using the calculator you can ascertain that over a period of 7 months you will have to pay an EMI of approximately Rs. 58,000 to pay back the loan. The amount that you will pay as interest will be approximately Rs. 13.3 lakhs.
There are certain conditions that the bank puts forth for these loans and they are:
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