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  • SBI Loan Against Property is Rated as "Excellent!" by 543 Users

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    SBI Loan Against Property

    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.

    Types of Loans

    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.

    What is Loan against Property?

    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.

    Loan against Mortgage of Immovable Property

    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:

    • The loan amounts are decided based on the classification of the city.
    • Tier I and II cities have a maximum loan amount of Rs. 2 crore while other cities have a limit of Rs. 1 crore on the loans.
    • The minimum amount that can be borrowed is Rs. 25,000.
    • For certain states the maximum amount available is Rs. 50 lakhs.
    • The margin for this loan is 40% of the market value of the property.
    • The repayment period for this loan can extend up to 120 months.
    • There is no prepayment charge for this loan.
    • It also comes with a maximum processing fee of Rs. 50,933

    Rent Plus

    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:

    • The maximum amount that can be borrowed if the property is in a metro city is Rs. 7.5 crores.
    • The maximum loan amount for all other cities is Rs. 5 crores.
    • The minimum amount that can be borrowed under this scheme is Rs. 50,000.
    • The properties that are used to secure these lease will have to be compliant with SARFAESI rules.
    • The property also cannot be rented to any institution that is part of the social infrastructure. This includes schools, orphanages, hospitals, nursing homes, etc.
    • The margin that is fixed for this loan is 25% of the amount borrowed.

    How is the Loan amount decided?

    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.

    General Loan against Property

    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.

    • The bank will only lend an amount up to 60% of the market value of the property.
    • The amount for salaried individuals can be calculated by multiplying the net monthly income by 24. The income taken for this calculation is the income minus any taxes and deductions that are made.
    • For self-employed individuals, the calculation is twice the net annual income. The income taken into consideration here is the one shown on IT returns minus the tax paid.

    Loan against Mortgage (LAM) of Immovable Property

    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:

    • The loan amount can be 60% of the market value of the property.
    • The EMI (Equated Monthly Instalments) should not exceed 50% of the net monthly income.

    Rent plus

    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:

    • The lowest of
      • 75% of the resale value of the property. The value will be determined by someone appointed by the bank.
      • 75% of the rent that will be received for the duration of the lease or rent agreement, minus any deposits and taxes applicable.
      • The maximum amount that can be borrowed under the scheme.

    Eligibility criteria for SBI Loan against Property

    There are certain eligibility criteria that need to be met for each of the loans on offer by SBI and these are:

    • Anyone who is either salaried or self-employed can apply for these loans.
    • Even those who work in the agricultural industry can apply for the loan against properties.
    • The applicant will have to be under the age of 60 years.
    • For loan against mortgage of immovable properties the applicants will need to have a net monthly income of Rs. 25,000 or more if they are salaried.
    • For the same loan, self-employed individuals will need to have a net annual income of more than Rs. 3 lakhs.
    • In the case of a regular loan against property, the net monthly income needs to be at least Rs. 12,000 or more for salaried individuals and for self-employed individuals it needs to be a minimum of Rs. 1.5 lakhs per annum.
    • In case of the Rent Plus loan, only those who rent their property to banks, MNCs or large or medium sized companies can apply for the loan.

    Loan against Property Interest rates for SBI

    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:

    Loan against mortgage of immovable property

    • 12.60% per annum (base rate + 2.9%) for loans of up to Rs. 1 crore.
    • 12.85% per annum (base rate + 3.15%) for loans that exceed Rs. 1 crore.

    Rent Plus loans

    • 12.95% per annum (base rate + 3.25%) for loans in both metro cities (up to Rs 7.5 crore) and non-metro cities (up to Rs. 5.5 crore).
    • For cities that are not included in the above criteria the interest rates are 13.10% per annum (base rate + 3.40%)

    Loan against Property

    • In the case of a loan against property the base rate being offered by the bank is 9.85% and the interest rate is the base rate plus 2.50% above the floating base rate.
    • This interest rate is also applied on a daily or monthly reducing balance basis.

    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.

    SBI Loan against Property Calculator

    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:

    • Amount you want to borrow
    • Interest rate being offered
    • Processing charges for the loan
    • Duration of the repayment period in months.

    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.

    Conditions for the Loan

    There are certain conditions that the bank puts forth for these loans and they are:

    • While there are no restrictions on how the money from a loan against a property is used, if the amount borrowed is more than Rs. 25 lakhs, a purpose for the loan needs to be provided.
    • With large loan amounts, the bank will not permit the money to be used to invest in markets or on speculations related to real estate.
    • They also require that the borrowers be the owners of their property. If they are not then the actual owner will have to agree to be a guarantor for the loan.
    • If applicants want a higher loan amount, they can also add the income of their spouse to their own for consideration.

    SBI Loan Against Property Reviews

    • SBI Personal Loan
      "Better service"
      0.5 4.0/5 "Great!"
      My home loan was taken with STATE BANK OF INDIA , they had been having the best interest rate, the charges which they had been making has been very nominal . The loan duration is 15 years. The branch response is absolutely fine. Overall service is good have good experience with SBI .
      Was this review helpful? 0
      , coimbatore
      Reviewed on Nov 15, 2018
    • SBI Personal Loan
      "Very Good at interest and charges"
      0.5 5.0/5 "Blown Away!"
      I'm very much satisfied with SBI. Even though its a Government bank, i got a better services than private banks. I'm happy with the interest rate, processing fee. They are offering very best interest rate compared to other banks. The processing fee is nominal which 1%. I got a interest rate 9.5% for a personal loan. They are having various types of personal loan.
      Was this review helpful? 0
      , chennai
      Reviewed on Nov 15, 2018
    • SBI Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have been using my personal loan with state bank of India from past 1 year, the loan amount they have given me was up to 50,000 it is sufficient for me and the rate of interest they have charged me was nominal, and processing fee they have charged was also nominal , overall service was good.
      Was this review helpful? 0
      , dariba
      Reviewed on Nov 14, 2018
    • SBI Personal Loan
      "Good in Need"
      0.5 5.0/5 "Blown Away!"
      I had applied for a Personal loan with Sbi and it processed on time. The interest rate given to me was very reasonable. It was 10.5 % at that time.Now i have closed that particular loan and i am in a plan of going for one more personal loan. You get reasonable rate of interest here.
      Was this review helpful? 0
      , bangalore
      Reviewed on Nov 14, 2018
    • SBI Personal Loan
      "Average Service"
      0.5 2.0/5 "Expected more"
      It has not been a great experience i had with this loan, the loan amount which they had provided has been okay. The interest rate with them has been around 14% which has been okay and there has not been any sort of charges which they had made. Their customer support has been helpful at times.
      Was this review helpful? 0
      , erode
      Reviewed on Nov 14, 2018
    • SBI Personal Loan
      "Loan process should be improvement"
      0.5 2.0/5 "Expected more"
      I have personal loan with SBI, they have taken three months to approve my loan and the documentation process was inconvenient. Though I have my salary with them, they taken long time to disburse the amount. I am not happy with interms of process but interest rate is good.
      Was this review helpful? 0
      , coimbatore
      Reviewed on Nov 12, 2018
    • SBI Personal Loan
      "Good service"
      0.5 3.0/5 "Satisfactory"
      It has been a good experience i had in getting this loan and the loan amount which they had provided has been satisfactory as well. The interest rate with them has been nominal and was around 11% and there has not been any sort of extra charges whcih has been made by them so far.
      Was this review helpful? 1
      , new delhi
      Reviewed on Nov 09, 2018
    • SBI Personal Loan
      "Happy Service Provider"
      0.5 5.0/5 "Blown Away!"
      SBI is good they processed my personal loan very faster, they gave me better interest rate than other banks in the market. I took personal loan for the total term of five years. But if in case I want to close my loan, they gave me part and pre closure option.
      Was this review helpful? 1
      , hyderabad
      Reviewed on Nov 01, 2018
    • SBI Personal Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It has been a good experience i had with this loan where the loan amount which they had provided had been satisfactory and the interest rate has been nominal when compared with the market rate where it has been offering the lowest interest rate in the market. There has not been any processing fee or any additional charges which have been made by them.
      Was this review helpful? 6
      , ahmedabad
      Reviewed on Oct 23, 2018
    • SBI Personal Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      The experience i had with this loan has been good and the loan amount which they had given has been satisfactory as well. The interest rate with them has been nominal when compared with the market rate and there has not been any sort of hidden charges which they had made. The processing fee has been nominal.
      Was this review helpful? 6
      , hyderabad
      Reviewed on Oct 19, 2018
    • SBI Personal Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      The process in getting this loan has been good and the loan amount which they had provided also had been good. There has not been any sort of additional charges made by them and the processing fee has been good. There has not been any interest rate has also been good as well when compared with the market rate.
      Was this review helpful? 3
      , chandigarh
      Reviewed on Oct 19, 2018
    • SBI Personal Loan
      "GOOD"
      0.5 5.0/5 "Blown Away!"
      My personal loan was taken from the STATE BANK OF INDIA and it got approved very quick also the process of getting the loan is is easy and good. I have got the sufficient amount of personal loan. The service is good and responsive also added on that it is good to use.
      Was this review helpful? 13
      , chennai
      Reviewed on Oct 15, 2018
    • SBI Personal Loan
      "Very Good Service"
      0.5 4.0/5 "Great!"
      It was a good experience i had in getting this personal loan from them where the process has not been bad. I was happy with the loan amount which they had provided and the interest of 11% with them has been nominal when compared with the market rate. Even the manager from the branch had been very much helpful and has been responsive during the process.
      Was this review helpful? 5
      , new delhi
      Reviewed on Oct 11, 2018
    • SBI Personal Loan
      "good service"
      0.5 5.0/5 "Blown Away!"
      My personal loan was taken with STATE BANK OF INDIA , they charge 11.75% interest rate and it is nominal compare to others . The tenure period is 5year and loan amount what they provide was satisfactory . Customer support and their follow up is good with this bank .
      Was this review helpful? 8
      , coimbatore
      Reviewed on Oct 09, 2018
    • SBI Personal Loan
      "Excellent Service"
      0.5 4.5/5 "Excellent!"
      It has been a very good experience i had with this loan and the loan amount which they had provided had been satisfactory as well. The interest rate with the has been 13% which has been nominal when compared with the market rate. There has not been any sort of additional charges which they had been made so far. Their customer support also had been helpful at times.
      Was this review helpful? 8
      , new delhi
      Reviewed on Oct 02, 2018
    • SBI Personal Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      I have taken a personal loan with SBI and my loan experience was good, the loan amount was for Rs 2 lacs with nominal interest rate when compared to other banks. Customer service was good and they responded on time. There are no charges on preclosure for this loan.
      Was this review helpful? 11
      , kolkata
      Reviewed on Oct 01, 2018
    • SBI Personal Loan
      "Hassle free"
      0.5 4.0/5 "Great!"
      I have taken a personal loan couple of years back and the loan is closed too. It is from State Bank of India. The customer services and response is good and the process is fine. The rate of interest and processing fees are also normal. In all no issues.
      Was this review helpful? 8
      , hyderabad
      Reviewed on Sep 27, 2018
    • SBI Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have taken a personal loan with SBI and my loan experience was very good. The process was smooth and i received my loan amount on time. Customer service is good and they responded on time. The tenure period for this personal loan is 5 years.
      Was this review helpful? 10
      , secunderabad
      Reviewed on Sep 19, 2018
    • SBI Personal Loan
      "SBI PROVIDED EASY PERSONAL LOAN TO SALARIED IN SHORT PERIOD"
      0.5 4.5/5 "Excellent!"
      Taking personal loan form SBI is very good for taking in a short period and have good communication with Bank staff and cooperative.Interest rate is also valid and i have taken more than 04 times personal loans from state bank of India.thanks.
      Was this review helpful? 6
      , champawat
      Reviewed on Sep 18, 2018
    • SBI Personal Loan
      "good service"
      0.5 4.0/5 "Great!"
      I have taken housing loan through SBI , the customer service sis good and i did not face any issue at the time of documentation time . There is no hidden charges with this bank and tenure period is 30year . Loan amount is up to the mark . Processing fee is 1000 rs .
      Was this review helpful? 8
      , jaipur
      Reviewed on Sep 07, 2018
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