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Loan Against Property

Allahabad Bank is a nationalised bank with its headquarters in Kolkata, India. It is one of the oldest joint stock banks in our country. It offers excellent experience of borrowing to its customer with its Allahabad Bank property loan. A loan against property is exactly what the name implies. It is a loan which is disbursed against any kind of commercial or residential property. This loan is given as certain percentage of the property market value usually around 40% to 60%. This loan against property in Allahabad Bank certainly gives comfort and confidence to the borrower as they can get this loan sanctioned for any business or personal need.

Allahabad Bank Provides many types of loan to its customers for their various needs and wants and Property loan is one of them. Loan against property is provided by the Bank against the Property of the applicant. Any person who wants to take a loan under this scheme can avail the loan against property scheme against their property. Individuals who include salaried or self-employed or Businessman or agriculturist can avail loan under this scheme. Even a firm or trust or society is eligible for a loan against their property. An applicant can take loan for the purpose of meeting personal or business need but not for speculative purpose. Allahabad Bank provides minimum loan of 5 lakh which may extend to up to Rs. 20 lakh. Following are the features of the Allahabad Property Loan which are stated below:

A. An individual can either singly or jointly take the loan, which includes salaried persons, professionals, self-employed, agriculturist, firms, company, trust or societies registered under Society Act.

B. Trusts or societies can also avail loan under this scheme for those activities which are covered under the trust or society deed.

C. However, any loan to Hindu Undivided Family i.e. HUF is not permitted under this scheme of loan against property.

D. The individual should have a minimum age of 21 years. So anyone who is aged 21 years and above can easily avail the loan if he or she matches the other mandated criterion and at the time of sanction of loan he or she should not be more than 70 years of age. In a nutshell, an Individual should be between 21 to 70 years of age, at the time of sanctioning the loan in order to avail loan under this scheme.

E. In case of trust or firms or society, it should be at least 5 years old, which means it should take loan after 5 years of its incorporation or formation. Before the expiration of 5 years of its incorporation or formation it is not eligible to take loan under this scheme.

F. An applicant can take loan for the purpose of meeting personal or business need but not for speculative purposes. The loan amount can be used for any personal or business need but an applicant cannot use the amount for speculative purposes like gambling. In case the loan is taken by a firm or a company, the loan amount can be used for the existing business purpose only.

G. Nature of loan provided under this scheme is in the form of a term loan and it falls under secured category of loan where the borrower gives a guarantee by using his property as collateral.

H. The main purpose of availing this loan should be to meet specific business and personal needs. The purpose should be genuine. The loan can be given to companies / firms for business requirements that they can meet with the loan. For instance, you can avail an Allahabad Bank property loan for future business expansions by using them as capital expenditure.

I. You can also repay the property loan from Allahabad in equated monthly instalments. EMI on property loan will be reduce the burden of repaying a huge amount of money in one go. You can calculate the EMI using a specific tool called a loan against property EMI calculator. There are various calculators available on the net for you to get to this figure.

Eligibility for Allahabad Bank Loan Against Property

The bank has laid down many criteria to avail Allahabad Bank property loan. There are 3 types of specific eligibility criteria which one needs to fulfil in order to be eligible for loan against property:
 

(i) Age Criteria:
 

a. In case of an individual, he or she should be a minimum of 21 years of age and maximum of 70 years of age at the time of sanctioning the loan.


b. In case of trust or firms or society, it should be at least 5 years old, which means it should take loan after 5 years of its incorporation or formation. Before the expiration of 5 years of its incorporation or formation it is not eligible to take loan under this scheme.
 

(ii) Income Criteria:


a. An individual should have an annual income of minimum 1.20 lakh in order to meet the criteria of availing loan against property..


b. In case individuals are joint borrowers then annual income of all the borrowers will be clubbed while computing the quantum of loan to be provided by the bank.


c. In case borrowers are any firm or company then income considered for computing the loan amount should be its net cash generation after adding back depreciation and the repaying capacity of the firm or company should also be considered. However, the income considered should be as per audited balance sheet or IT return of last financial year.


d. If the source of income is different, in case loan is taken by a firm the proprietor or the partner’s income will be considered and in case of company the income of directors should be clubbed with the income of firm or Company respectively.


(iii) Nature of the property owned:
 

a. Residential or Commercial Property should be un-encumbered which should be free from all litigation (i.e. litigation with tenant or other occupant) in the name/s of borrower/s & situated at good residential or business centre. Property should be in the name of the proposed Borrower.


b. Property that has been developed or constructed for the purpose of sale cannot be extended for the purpose of the loan against property.


c. Loan against property cannot be extended against Agricultural Property, i.e. an applicant cannot take loan against any agricultural property.


d. Loan will not be extended against Partition Deed i.e.an applicant cannot take loan against a partition deed.


e. Open Land under this scheme cannot be accepted for the purpose of loan except on the condition that the Land is identifiable, demarcated, situated in a residential or commercial area and easily marketable.

Loan Amount Sanctioned for Allahabad Bank Property Loan

Allahabad Bank provides a minimum loan of Rs. 5 lakh which may extend to up to Rs. 20 lakh.


In case the Allahabad Bank property loan is taken by a salaried person the maximum loan amount will be 36 times of his monthly take home salary.


In case the loan is taken by an agriculturist the maximum amount will be 3 times of the net annual income. The income will be assessed on the basis of value of produce less standard cost of production (as prescribed by NABARD/ DLCC from time to time) as per the cropping pattern adopted by the agriculturist.


In any other case except agriculturist the maximum amount of loan will be 3 times of the net cash generation (after adding back depreciation) as per audited Balance Sheet or Income tax Return of last Financial Year.

Repayment Capacity

The repaying capacity of the borrower should be the net monthly income or home take salary (taking in to account all existing & new deductions/EMI) and should not be less than 40% of the gross monthly salary or income of the applicant.

Margin

The bank has laid down margin requirements for different types of the loans availed by different applicants which is stated below:
 

In case the loan from Allahabad Bank is taken against commercial or residential building then 50% of the valuation of the property.


In case loan is taken against an open land then 60% of the valuation of the property.

Primary Security

For those interested in a property loan offered by Allahabad Bank, he/she is required to provide collateral of sufficient value as security with the bank. The collateral such as property documents/securities, etc. that are submitted to the bank are such that in case the borrower is unable to make timely instalment payments.

Guarantee

Personal Guarantee of proprietor or individual major partners, promoter, directors, Trustee, office bearer or authorized signatory is to be obtained in case of credit facility obtained in the name of the firm or company or Trust or society.

Repayment

The loan from Allahabad Bank can be repaid in the equal EMIs and should be paid off in a maximum of 108 months. Repayment shall start from next month from the date of disbursement.

Rate of Interest

The loan liability and rate of Interest charged by the bank will be at the 11% (Fixed) with the option of change after 3 years.

Processing Fee

If loan amount is upto Rs. 25 lakh then processing fee will be 1.20% of the loan amount to a maximum of Rs. 3,000. If loan amount is greater than Rs. 25 lakh but less than equal to Rs. 150 lakh then processing fee will be the 0.60% of loan amount to a maximum of Rs. 30,000 and lastly, where loan is more than Rs. 150 lakh then processing fee will be 0.30% of the loan amount upto to a maximum of Rs. 90,000.


The following table records the processing fee and other criteria of each of the above-mentioned cases for easy understanding:
 

 

Amount of Loan

 

Processing fee

 

Upto Rs. 25 lakh

 

1.20% of the loan amount, maximum Rs. 3,000/-

 

Rs. 25-150 lakh

 

0.60% of the loan amount, maximum Rs. 30,000/-

 

Rs. 150 lakh or more

 

0.30% of the loan amount, maximum Rs. 90,000/-

Prepayment Penalty

As per banks policy, in case of turnover the prepayment penalty will be 2.25% of the outstanding balance.

How is Allahabad Bank property loan different from a personal loan?

Loan Against Property

Personal / Home Loan

Any individual takes this loan by mortgaging the house property or any commercial property

An individual can take a personal or home loan for personal use without any security or guarantor

One of the most inexpensive retail loans after home loans. Interest rates are usually around 12%-16% or less

Higher interest rates compared to mortgage loans. Usually issued at interest rates in the range of 16%-21%

Since the rate of interest is lower, LAP Equated Monthly Instalments amount is lesser, making the loan easier to repay

Since rate of interest is high, Equated Monthly Instalments for personal loans are usually on the higher side

Maximum loan eligibility is determined principally by the value of the property and income

Maximum loan eligibility of personal loans is determined primarily by an individual's income

Loan tenure for LAP is up to 15 years (180 months)

Loan tenure for personal loan is up to 5 years (60 months)

Secured and term loan

Unsecured loan

Documents Required while applying for Loan Against Property

The list of documents required for property loan may vary from one bank to another. Listed below is the list of documents required for an Allahabad Bank property loan:
 

Salaried Customers

Self Employed Professionals

Self Employed Businessman

Loan application form with passport size photographs

Complete loan application form with passport size photographs

Loan against property application form with passport size photographs

Proof of identity and residence proof

Address proof and identity proof

Proof of identity and proof of address

Current bank statement and latest salary slip

Current bank statement and latest salary slip

Current bank statement and latest salary slip

PAN Card / Form 60

Last 3 years income tax certificate for both business and self, last 3 years profit and loss statements and balance sheets

Profit and loss statements of last 3 years and balance sheet and last 3 years income tax returns (self and business)

Last 6 months bank transactions statement

Last 6 months bank transactions statement

Last 6 months bank transactions statement

Cheque for the processing fee

Cheque for the processing fee

Cheque for the processing fee

Checking Eligibility

An applicant who is desirous of availing a Property Loan from Allahabad bank first needs to be eligible for the loan as per the bank’s requirements. Checking the eligibility has been simplified by the bank where the prospective client can simply log on to the website of the bank and check his eligibility. The applicant needs to follow the following steps:


Visit the website – choose ‘Loan Application’ from the available list – choose ‘I want to check my Eligibility’ and the necessary page will open through which the eligibility can be determined

EMI Calculator

The bank provides the facility of calculating the EMI online by specifying the loan amount, the tenure opted and the applicable rate of interest. The calculated EMI will be displayed to the applicant who can proceed to apply for the loan or decide on affordability.

Checking Loan Status

Even after opting for a loan from Allahabad bank, it takes some time for the loan to be granted and money to be credited in the customer’s account. Meanwhile if the customer wants to check the status of the loan application, the bank also helps in providing the relevant facility. For checking the loan status, the applicant simply needs to visit the bank’s website and on the Loan Application page, there is a ‘I want to check my Application Status’ option which when clicked opens a new page. The Application details are to be provided in the status page and the loan status will be displayed.

Applying for a Loan

Only for the convenience of its customers, the bank has provided three different ways of applying for this loan. Each of these ways is discussed below in brief:


Applying through the branch:


The applicant needs to visit the nearest branch of the bank, obtain the application form, fill up the relevant details and submit the form along with the required documents after which the loan application process will be complete.


Applying online:
 

To match and keep up with the rising trend of online transactions, Allahabad Bank offers property loan applications online through its website. If you want to apply for loan against property from Allahabad Bank then the application process is very simple and easy. All you have to do is visit the Paisabazaar.com website and go to the loan against property section. Fill up the loan application form with all the required and mandated details and click on submit button.


The bank’s representative will be get in touch with the applicant and guide you through loan application completion process. This, in turn, will help customers to save their time without engaging in useless and time consuming tasks to avail the loan. The applicants simply need to login to the bank’s website, choose the relevant tab and provide the necessary information as required by Allahabad Bank. Alternately you can also apply for an Allahabad Bank loan against property through a branch or over the phone.