State Bank of India (SBI) is one of the largest banks in India. This bank caters to a huge population in our country. SBI has a lot of products and features to offer to its clients. A very large portion of their money comes from lending money to their clients in the form of a loan. SBI’s Loan Against Property (LAP) is very famous and is also pretty successful.
Continue reading if you want to know more about SBI loans and are interested in getting a loan against property through SBI.
Eligibility criteria
There is a minimum income criterion set by almost every lender, which helps them to decide how much money a borrower can take from the bank as per his/her financial condition. As your income rises, your eligibility to get a loan also increases.
Therefore, if you have just started your career in any field, chances are that you might be having a low income and as a result low eligibility to get the loan. But with time, your income increases and so does your eligibility to get the loan. For you to get a loan against property through SBI, your minimum income should be Rs. 25,000 for both salaried and self-employed individuals.
Loan amount
This is the minimum and maximum amount between which you can take a loan against the property. The loan amount is determined on the basis of the loan-to-value ratio and is helpful for the lender in deciding how much the borrower will get even if the value of their property is pretty high.
For LAP, SBI has a minimum amount of Rs.10 lakh, while the maximum amount is capped at Rs.7.5 crore. However, the maximum amount is Rs.1 crore for non-BPR areas. If the location of your property falls within the areas of Mumbai, Delhi NCR, Chennai, Pune, Ahmedabad, Hyderabad and Bangalore, the maximum limit set by SBI is Rs. 5 crores. For any other BPR area, the maximum limit is set to Rs. 2 crores.
Security for loan
This is considered to be the collateral or the property that you will keep with the bank towards your loan against the property. The bank will consider that you will repay the loan on time and thus keep the property safely. However, if you fail to repay the loan in the set time, then the bank has the right to liquidate your property to get the dues.
With SBI, you can use both your residential or commercial property as collateral. This is not the case with other banks which allow you to use just your residential property as collateral. However, the end decision regarding your eligibility for the loan against property is taken by the branch manager or the person in charge of granting loans in the bank.
Need for loan
The purpose or need for the loan is the reason why you are borrowing money from the bank. In most cases, the bank will let you borrow money for personal or business use. But things work a bit differently with SBI.
SBI does not provide loan against property for speculative or business purposes. They will allow you to borrow money only for personal use like paying for education, medical emergency, or for marriage. Being the borrower, you will have to submit an undertaking to SBI stating the purpose of the loan, they will however not ask for any proof about the use of the borrowed money.
Rule for age
Loan against property (LAP) has a unique nature and hence the age of the borrower plays an important role in granting a loan. The loan against property needs to end before the borrower reaches 70 years of age. Thus, considering all this, the borrower must be between 25 to 65 years old to get a loan against the property.
Tenure of loan
SBI offers a loan against property for a minimum duration of 5 years, while the maximum duration is capped at 15 years. This is the case with most of the banks around India. However, the tenure may vary as per the age of the borrower.
Thus, after reading the above points we can conclude that SBI offers a service when it comes to loan against property. You should consider borrowing a loan in the form of LAP if you are in urgent need of money and want to use it for your personal use