General Article

SBI Loan against Property: Purpose and the Features

The State Bank of India (SBI) offers a loan against property to people who require funds to meet their personal, agricultural, or business needs. The funds are given on the mortgaged existing property, which is self-owned by the borrower. Usually, people take a property loan to fulfil big-ticket expenses such as wedding expenses, medical treatments, education expenses, home repair, and more. The loan amount can thus be used for any purpose, other than that speculative in nature.

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As a collateral loan, a loan against property from the State Bank of India helps one to amass funds on idle property, without having to depend on unsecured loans, which usually have a higher interest rate. Thus, a property loan SBI is money-saving, quick, and asks for minimal documentation, including the income documents, identity proof, address proof, property documents, and Income Tax Return proof.

Below given are some of the features of an SBI loan against property in India.

  • Loan Amount, Interest Rate, and Charges

The loan amount is between Rs. 25 lakhs and Rs. 5 crores and over. For a general loan on property, the loan amount is between Rs. 25,000 to Rs. 1 crore. The interest rate is 10.30% onwards. Interest is calculated on daily reducing method. Processing fee is up to 1% of the loan amount.

  • Loan to Value Ratio (LTV)

Loan to value ratio is up to 65%. LTV will be calculated on the Valuation Report not older than 3 months. Loans which amount to Rs. 1 crore and more or below, where the Market Value is based on the Valuation Report, and is greater than 20% of the Guidance value, then two valuation reports must be obtained.

  • Repayment Tenure and Credit Score

There are no prepayment charges applicable. Repayment tenure can extend up to 120 EMIs. Basically, the tenure lies between 5 years and 15 years. Minimum credit score of the person must be 650 and above.

  • Income and Age Criteria

The applicant must be under the age of 70 years, with a minimum net income of Rs. 25,000 per month. For self-employed individuals, the yearly income must be minimum Rs. 3 lakhs.

  • SBI Rent Plus

This loan is provided to individuals who are owners of apartment buildings or commercial complexes. The loan is given against rental income from the property. The property in question must be compliant with SARFAESI rules. Also, the property must not be rented to any institution, which is a part of social infrastructure, such as orphanage, school, nursing home, hospital etc.

  • The margin for the loan is 25% of the borrowed amount.
  • Maximum loan amount is up to Rs. 7.5 crores (metro cities) and Rs. 5 crores (all other cities).
  • Minimum amount one can borrower under the Rent Plus scheme is Rs. 50,000.

The above-mentioned details are purely for information. You may check with SBI for any updated details. If you wish to apply for a loan against property with State Bank of India, you can either visit the nearest bank-branch for the loan application form, or apply for this loan on the official website of SBI.