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Loan Against Property

There are some expenses which are certain in nature and we can always make provisions for such expenses to meet our goal by way of savings and investment for certain events in our life span because we know approximately how much amount will be required for accomplishment of that event like child higher education, marriage, etc. But the savings or investment which we are making might or might not yield the desired result in that scenario what is the way out. Suppose someone had made an investment keeping in mind that it will meet the requirement of amount that will be needed after 20 years but if somehow the investment which was made doesn’t yield the expected returns than how will that requirement will be fulfilled. The answer to such problem is loan against property wherein the loan amount which will be given can be used for meeting personal requirements.

Loan against property is generally known to be as a multipurpose loan. If you have any property whether residential or commercial you can take loan against it on attractive interest rates and this money can be used for various things such as to enhance your business, to purchase an asset, child marriage or any other of your life’s requirement. Apart from all these one of the most prominent features of loan against property is that it can also be availed for purchasing new property.

Features and benefits of taking a loan from Federal Bank

Federal Bank’s LAP is designed to fulfil any personal requirement of yours or to take care of any other legally valid expenditure. A property loan from Federal Bank offers its customers various unique features and attractive benefits. Some of them are listed below:
 

  • The approval process of loan against property scheme is quick and hassle free.
  • Federal Bank offers longer repayment period that is up to 120 months and flexible repayment options.
  • There is no unnecessary stipulation of financial parameters associated with a Federal Bank property loan
  • Loan against property in Federal Bank can be availed for low processing charges or fees which is 0.50% of the loan amount
  • Property loan from Federal Bank is also known as term loan as it offers loan for purchase of fixed assets, machinery equipments and also for construction of office building, factory, furnishing and interior decorations.
  • Federal Bank property loan can also be availed for working capital and non funded limits such as procurement of stock, meeting advertising expense and financing against receivables.
  • Federal bank property loan can also be availed as demand loan for meeting general administrative expenses.

Criteria Determining Loan Against Property Quantum from Federal Bank

The amount of loan which you can borrow from Federal Bank by mortgaging your property is calculated based upon these four factors:

 

  • Market value of the mortgage: The approximate value of property which you are giving as collateral security is subject to certain eligibility criteria. You may be eligible for loan against property if you owe a maximum of 75% of the total value of property.

 

  • Equated monthly instalments that you can pay: Another significant eligibility factor is the amount of money that you can pay every month as loan repayment after meeting other expenses and paying your other EMIs with other banks.

 

  • Loan tenure: Loan against property tenure in our country usually ranges from 5 years to 18 years. It is frequently said that longer the loan tenure, higher the eligibility.

 

  • Interest rate: Interest rate plays a crucial factor while availing a loan against property. If the interest rate is higher, lower is the loan amount you are eligible for.

Types of Property using which a Property Loan from Federal Bank can be availed

The following are the list of properties against which the bank can sanction a loan against property.
 

  • Commercial property and residential property are the most eligible securities to avail property loan
  • Some of the bank make exceptions as they lend against industrial property in some areas
  • Banks can also extend loan against self occupied property, vacant property or even rented out property. However, bank may charge a higher interest rate on vacant property than those on self-occupied property
  • Most banks would insist upon a clear and marketable title with full chain of custody that is reflected in the property documents
  • No other bank, institution, organisation or individual should have any claim on the property
  • Property which is offered as security to avail loan must be located within municipal limits and must have been constructed as per the approved map plan

Properties not Eligible for Mortgage Loan

Bank does not sanction loan against all types of property available. Here is a list of properties against which the bank does not grant a loan:
 

  • Bank does not give loans against agricultural land as only crop loan can be availed against agricultural land
  • Unused or vacant land is not eligible to be offered as a security for availing a loan against property
  • Any property or building located in Gram Panchayat areas or unauthorised areas are not accepted as security by Federal Bank
  • Any property which is purchased on power of attorney cannot be extended as security for loans in most part of India
  • Property which does not have proper chain of documents is not accepted
  • Very small properties such as (less than 600 sq ft in size) are mostly not eligible as security for a loan

Features of Property Power Loan from Federal Bank

Property Power

Maximum Loan Amount

Rs. 5 crore

Repayment period

15 years

Margin

50% of security value

 

By taking a loan against property, you can easily satisfy your need of money for various expenses using the Property Power Loan from Federal Bank. Your need of money for business expansion, children’s education or marriage, to consolidate your debt as well as many other requirements can be fulfilled with the help of Federal bank property power loan.

 

Repayment Options

  • Cheque
  • Automated Loan Recovery
  • Standing Instruction
  • FedNet Internet banking
  • ECS
 

 

This loan from Federal Bank is given against your residential house property, land, or any commercial property. It depends upon your need and convenience. Processing of loan is very quick and prompt. Minimum amount of paper work is required. You can avail loan amount up to Rs. 5 crore with lower rate of interest. Elongated repayment period of 15 years is provided and you can repay your loan in easy EMI. There are so many options for repayment are available as per the need of the customer. So that it will not become any burdensome for them to repay the loan. If you have ample of time and can take out the time to go to the branch of federal bank to repay your loan every month. You can opt for their cheque method for repayment. You can visit their branch every month at the given date to drop your cheque. If you don’t have time to visit the branch to pay you EMI then you can opt for Internet banking.
 

Federal bank provides you with the portal named as Fed Net. From here apart from doing your general banking transactions you can also pay your loan EMI. You just need to register for the option and every month you can pay your EMI with just a click. You are very busy so that neither you can visit your branch nor able to pay through internet banking, then you can just give the standing Instructions to your federal bank branch. EMI will be directly deducted from your account if you opt for Standing Instruction facility. So it’s a tension free option and you not need to remember about the due date. Thus you will be tension free about the repayment of your loan. If you have your salary account/ saving bank account in some other bank then also no need to worry, In that case you can opt for ECS facility. And your EMI will be deducted from the account of your choice. Bank also has the facility of Automated Loan Recovery.

EMI Calculator

Equated Monthly Instalment i.e. EMI is the amount of money which customer has to pay every month to the bank till the closure of home loan account or till the loan amount is fully paid by the customer. EMI on property loan is normally fixed throughout the loan period. It includes Principle repayment as well interest payment.


For your loan amount and different tenure you can easily calculate your EMI on the loan against property EMI calculator provided at the website of Federal Bank.


In case of prepayment of loan, Federal bank doesn’t charge any penalty, thus doesn’t affect your EMI.


EMI calculation is based on 3 factors- loan amount, loan term and Interest rate. Usually it is calculated on reducing balance.


You can avail loan up to 50 % value of the secured property. You can keep mortgage of immovable property as a security. Property can be in your name or property in the name of your close relatives can also be accepted as a security. In the case of person of Indian origin (PIOs), property has to be in their own name.

Insurance at Low Premiums

Option of insurance is also available for property power loan. Insurance is offered at attractive premium rate. Amount of premium will be clubbed with your loan amount this insurance covers your loan and if death occurs during the tenure of the loan the outstanding loan amount would be paid by the insurer for this only nominal amount needs to paid as premium another good feature along with this product is insurance premium can also be financed along with the loan so one need not required to pay premium from his pocket the premium amount would be paid in the form of EMI for example, if someone had taken a loan of Rs. 10 lakh the premium for covering the loan is Rs 25,000 the premium amount would be added to loan amount and now the loan amount becomes Rs. 10.25 lakh and EMI would be calculated on 10.25 lakh. This is very good option to secure loan because there is a marginal difference in EMI with insurance cover and without insurance cover also borrower can claim the insurance premium amount for taking tax benefits under section 80C of the Income Tax Act 1961.

Service Charges

Processing or administrative fees equal to 1% of sanction amount will be charged. Any other charges incurred by bank over and above this limit will be borne by the customer. In case of early closure of the loan, 2 % of outstanding balance or DP (whichever is higher) will be charged as a penalty.
 

In case of change of address or employment customer has to inform the branch on immediate basis so as to avoid further complications.

How to Apply

Either you can directly approach their branch to apply for the loan from Federal Bank or you can also fill their online application form & their representative will contact you. You just need to fill some required field like you name, mobile number, email id & the city you belong to.


Apply Online:
 

In the era of online banking, people preferred to do online transactions so as to save their time. Federal bank is offering Online Application Form so that you can directly apply for the loan without visiting their branch. If you want to apply for loan against property from Federal Bank, you just need to visit a website like Paisabazaar.com. Go to their home loan segment and find the loan against property option. Click on - Apply online. Their online application form will be opened. You need to fill the required information. And if you are eligible as per their guideline, your loan will be approved.

Documentation Required for Federal Bank LAP

Below mentioned are the list of documents which are required to complete the loan formalities. Federal bank believes in very less paper work. Also the documentation required by them is not as much of and also feasible for customer to provide.
 

Required Documents

  • Application for loan duly signed
    and filled by customer
  • Income proof of customer
  • Bank Account statements
  • Address Proof
  • Id Proof
  • Age proof
  • Any other documents as required by bank

 

Know your customer (KYC) formalities:
 

  • Identity Proof.
  • Address Proof
  • Photocopy of your PAN card.
  • Two copies of applicant / and co – obligate.

Income Proof:
 

  • For salaried applicant-
  • Latest salary certificate of the applicant or last three months salary slips.
  • Income Tax returns of last two years.
  • Form 16
  • Bank account statements of last 6 months
  • Loan application form duly signed and filled by applicant.

 

  • For Self Employed Professionals-
  • Proof of existence of business.
  • Certificates of Educational qualifications
  • Income Tax returns of last two years along with audited balance sheet and profit & loss account statement.
  • Income Tax returns of last two years along with tax paid challan.
  • Bank account statements of self as well as of business for last one year.
  • Loan application form duly signed and filled by applicant.

 

  • For Self Employed non-Professionals/ Business.
  • Proof of existence of business & profile of your business.
  • Income Tax returns of last two years along with audited balance sheet and profit & loss account statement.
  • Income Tax returns of last two years along with tax paid challan.
  • Bank account statements of self as well as of business for last one year.
  • Loan application form duly signed and filled by applicant.


Any other documents as required by the bank.

Interest Rate For Federal Bank Loan Against Property

Base Rate

9.95%

Property Power Loan (LAP)

15.05%


Loan liability and interest rate is generally based on the risk profile of the applicant and facility offered to him. You have to contact your nearest branch for more precise rate of interest being offered to you.


Base rate of interest is based upon various factors such as- Cost of deposit of banks, negative carry on maintaining statutory CRR & SLR, other administrative expenses, average expected return on capital.


Final rate of interest proposed to customer is vary from customer to customer depends upon type of scheme related charges like overhead cost related to loan, credit risk premium, tenor premium etc. All the rates including base rates and final rates will be reviewed and revised by the bank on quarterly basis.

Federal Bank Customer Care

If you need any sort of assistance, help will be provided 24x7. You can either leave your number on their website and there representative will call you back. You just need to fill a small query form along with your number. Or you can also call on their toll free numbers and you will get 24x7 assistance on these numbers.
 

Also you can contact them on their email id. You can always visit your nearest branch for further assistance.

Why take Loan Against Property from Federal Bank?

Initially known as Travancore Federal Bank, It has its headquarters at Aluva city in Kerala district. This bank provides very simple and innovative products based on the customers requirement. Federal bank works in every section i.e. loan, insurance, deposits, cards and other banking services. Federal bank is the most trusted bank amongst the client.


They provide hassle free and fast loan approval. As this bank believes in new technology thus avoid lots of paper work. You will get your home loan approved in minimum time & without much paper work. You may be eligible to get the loan amount of up to Rs. 5 crore. You will get loan amount up to 50 % of the total security value. You can extend the repayment period up to 15 years. In this manner you will get more time to repay your loan in painless EMI.


Repayment of loan can be paid in easy equated monthly instalments. Customer can choose any of the given options to repay the equated monthly instalments: - Cheques, Standing Instruction (SI) at your branch, Internet Banking (FedNet), and Auto payment through ECS, through mobile banking. The bank also give you option to decide the date on which the EMI needs to be deducted that is between 1st day of the month to 10th day of the month this helps in managing finances suppose someone salary gets credited on 5th of the month then he can opt for any date after 5th for deduction of EMI.