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Loan Against Property

Among a host of loan options available with banks in India, a relatively prominent product that finds wide acceptance is the loan against property offering, what is also termed sometimes as a property loan. This popular loan is a secured loan that is sanctioned against your freehold or commercial property. A loan against property works well for a customer as it allows one to borrow a large amount of money for any personal or business needs. The best thing about a loan against property from HSBC Bank is that you can take this loan even to purchase a new property.

 
HSBC offers loans to customers against their residential property at attractive rates. The property loan from HSBC Bank is offered in two variants of Loan against Property and Smart Loan against Property.

Types and Features of Loan Against Property offered by HSBC

  1. Loan Against Property
     

Loan is offered to applicants against their residential property. The features of the loan are as below:
 

  • Loans are granted for up to Rs.10 crores which is a considerable amount that can be utilized by the customers for the required purpose.
  • The minimum amount of loan available to an applicant is Rs.3 lakhs.
  • The repayment tenure is up to 15 years and any tenure can be chosen by applicants based on their affordability as long as it is within the maximum tenure of 15 years
  • The bank charges a floating rate of interest on Home Loans. The floating rate of interest is subject to change hence EMI payable amounts can vary.
  • Before applying for a property loan from HSBC, use a loan against property EMI calculator to specifically calculate your EMI. You will need three main elements to get this number: tenure of loan, rate of interest and the total of the loan amount.
  • The documentation required under the loan scheme is simple and easily available with all applicants making the loan process hassle-free
  • The loan is repaid through Equated Monthly Instalments (EMIs). The loan is generally paid through post-dated cheques but can also be paid through Electronic Clearing Systems (ECS) or standing instructions to the bank to debit the amount of loan through the existing HSBC savings account.
  • For NRIs the repayment mode is debit to the NRE account / NRO Account / inward remittance / liquidation of FCNR / through money obtained from sale of immovable property based on which the loan was granted and through any close relative’s bank account. If repayment is done through using a channel apart from the linked repayment account, a special Declaration/Loan request Form will need to be submitted.
  1. Smart Loan Against Property
     

Smart loan against property is a loan against property option from HSBC Bank wherein the interest payments can be reduced by opting for the loan through a smart LAP Account. The features are:
 

  • Loans are issued from Rs. 3 lakh to Rs. 10 crore.
  • The repayment tenure is up to 15 years and any tenure can be chosen by applicant within the maximum limit of 15 years
  • The bank charges a floating rate of interest on Home Loans. The floating rate of interest is linked to the Base Rate which may fluctuate. In case of any fluctuation in the Base Rate, the interest rate changes which in turn alters the Equated Monthly Instalment to be paid.
  • The loan is operated through a Smart LAP Account which operates similar to a Current account wherein the loan amount disbursed is like an overdraft facility on the account. If the customer makes deposits into this loan account with sums over and above the EMI payments, the excess payments stand deducted from the outstanding loan principal and interest charges will be incurred only on the residual amount. Thus a borrower may save on interest payments during the entire loan tenure.
  • The EMI payments may be made using ECS and Standing Instructions on the bank account or on the basis of post-dated cheques.
  • In case of NRI borrowers the repayment mode is debit to the NRE account / NRO Account / inward remittance / liquidation of FCNR / through sales proceeds of immovable property on which the loan was granted and through any close relative’s bank account. If repayment is done through any other channel other than the linked repayment account, a Declaration or a Loan request Form needs to be submitted
  • The applicant can make pre-payments under the loan but only after 6 months of loan disbursal.

Eligibility Criteria for HSBC Bank Loan Against Property

To avail a loan against property from HSBC Bank, the following eligibility criteria should be met in case of Indian residents:
 

  • The minimum net income should be Rs.5 lakhs per annum for salaried employees and Rs.7.5 lakhs per annum for self-employed individuals.
  • The minimum age for availing a home loan is 21 years.
  • The maximum age as on the date of maturity of the loan should be 58 years for salaried employees, 60 years for employees of a public limited company or Government employees and 65 years for self-employed individuals
  • Loan is available to resident individuals and also NRIs
  • The property against which loan is sought should be insured with an insurance company against loss by fire, earthquake, flood and other damages. HSBC should be the beneficiary under the insurance policy
  • The funds availed from the loan cannot be used for speculative activities.

For NRIs to avail a loan against property from HSBC Bank, the following eligibility criteria should be met:
 

  • For salaried NRIs – copy of valid Indian Passport showing VISA stamps or copy of foreign passport or equivalent documents, copy of valid Visa or work permit or equivalent documents supporting the NRI status of the applicant accountholder, latest contract copy showing salary or salary certificate or wage slip, overseas bank account statements of the last 3 months showing salary credit, NRE/NRO account statements of the last 3 months, local bureau report of the country where the applicant is based
     
  • For NRIs working in the Merchant Navy – latest contract copy and if the applicant is on home port for the last 6 months then future contract copy is required, latest Continuous Discharge Certificate (CDC) for 3 years’ employment proof, copy of passport for identity proof, primary bank account statements for the last 3 months, local bureau report of the country where the applicant is based if country of residence is other than India.
     
  • For self-employed NRIs – trade license or an equivalent document, overseas bank account statements and NRE/NRO account statements of the last 3 months, computation of income, Profit & Loss account and balance sheet of the last 3 years certified by a CA or CPA or by any authority as the case may be or any other equivalent company accounts, passport copy with a valid Visa Stamp, brief profile of the applicant and his business in the specified format, local bureau report of the country where the applicant is based out of.

Interest Rates on HSBC Loan Against Property

The loan liability and interest rate for salaried and self-employed individuals is 10.90% per annum for Loan against Property and 11.40% per annum for Smart Loan against Property.

Fees and Charges

The fees and charge structure for both the type of loans against property is as follows:
 

Description

Charges

Property documents copy submitted with HSBC

Rs. 500

Request for changing loan schedule/ EMI date

Rs. 300

Request for details of daily interest calculations

Rs. 300

Duplicate Amortization Schedule request

Rs. 300

Copy of Welcome Pack

Rs. 300

Active account repricing

0.5% of the outstanding loan amount

Repayment mode/SI change instructions

Rs. 500

Track Record details copy

Rs. 250 per statement

Credit Information Report (CIR) charges

Rs. 50

Processing fees for HSBC LAP

Up to 1% of the loan amount sanctioned or Rs. 10, 000 whichever is higher.

Missed payments/cheque bounce

Rs. 250 per case

Debit Card Charges for Smart LAP

Rs. 150 year

Penal interest for delayed instalments

2% more than the interest rate charged on the original loan account

Prepayment charges if LAP has fixed rate

Zero for no more than 25% of loan sanctioned each  year

4% of amount prepaid if prepaid amount exceeds 25% of sanctioned loan during any year

Documents Required

The following documents are required to be submitted at the time of availing a loan from HSBC. All documents should be self-attested:
 

  • A completely filled up Loan Application Form with one passport sized photograph
  • A valid Identity Proof which can be any one of these documents like Passport, Election or Voter’s ID card, permanent Driving License, Permanent Account Number (PAN) Card or Aadhar Card.
  • A valid proof of residential address which can be any of these documents like Passport, Election or Voter’s ID Card, permanent Driving License, society outgoing bill only from registered societies, Utility Bills like Electricity/Water/Telephone Bill, Gas Bill for pipeline connection only, Property Tax Bill or Domicile Certificate with address issued by Municipal Corporation
  • Age proof which can be any of the documents like passport, driving license and photo PAN Card
  • For individuals who are Resident Indians, the following Financial documents are required which should be self-attested:
  • Salary Slips of the last 3 months showing statutory deductions and bank statement of the last 3 months showing the last 3 salary credits for salaried employees
  • Acknowledged IT Returns for the last 2 years which also includes e-acknowledgement, Profit & Loss Account, Balance Sheet certified or audited by a Chartered Accountant and computation of income of the last 2 years with all annexures and auditor’s report, primary bank account statements of the last 6 months, a Partnership Deed for partners in a firm for Partnership business, shareholding pattern or Memorandum and Articles of Association duly attested by a Chartered Accountant and the list of Directors for directors of a Private Limited company
  • Acknowledged IT Returns for the last 2 years which also includes e-acknowledgement, Profit & Loss Account, Balance Sheet certified or audited by a Chartered Accountant and computation of income of the last 2 years with all annexures and auditor’s report, primary bank account statements of the last 6 months required for consultants or self-employed professionals.

Loan Against Property Turn-Around-Time (TAT)

Loan Against Property (both variants)

TAT

Pre-approval Application Processing

Within 5 days of submission of complete documents

Valuation and Legal Evaluation of the Property

From 3 days onwards of submitting copies of complete property documents

Post-approval Loan Processing

Within 4 days of submission of complete documents

Loan Disbursal

Within 2 days after submission of duly stamped and completed loan agreement and other required documents

Repayment Options

HSBC bank offers you easy repayment options. You can repay the property loan from HSBC through a standard instruction or a letter of authority to the bank to debit your HSBC savings or current account for the EMI amount. The current or savings account which is used for reimbursement of loan comes to you without the minimum balance requirements during the tenure of loan.

Why apply for an HSBC Bank Property Loan?

HSBC Bank is one of most prominent providers of loan products in the world and brings this expertise for its Indian customers. Here are a few reasons why the bank can be considered by customers looking for a property loan.
 

  1. Wide range of services and investments: The bank offers a range of financial products and investment solutions. The loan sanction and repayment process is simple and connects with the need of people. The EMI on property loan is lower to help customers employ their funds without worrying about affordability.
  2. Personalized assistance: To meet the specific needs of customers, the bank has a customer care team that helps to solve all grievances and queries of their customers. Any request or inquiry on the loan against property scheme is quickly resolved.
  3. Acknowledged expertise: The bank offers you a product and support services that are best in every aspect. The application process for getting a loan from HSBC is clear and unambiguous with no complexities involved. The bank helps you with the application process and ensures you get the sanction for the HSBC Bank property loan.
  4. A comprehensive approach: Getting a loan from HSBC is always preferred because of the bank has a transparent policy and focuses on building a relationship of trust with their customers. The bank does not have any hidden charges or fees involved.
  5. Global footprint: HSBC is one of the leading banks with its branches in more than 80 countries. This means that if you are looking for a loan against property in HSBC Bank, then team has the necessary expertise to make your application process easier. All details will be readily available online once you become their customer and you can access and check all details from a single web window.

FAQs when taking LAP from HSBC Bank

Q. How to apply for loan against property from HSBC Bank?
 

A. You have to follow the following few steps to apply for loan against property from HSBC:
 

  • Look/search for an HSBS Bank branch nearby your area
  • Contact the relationship manager of that branch
  • You can reach out to a nearby branch by using their phone-banking facility
  • You can also apply through the bank’s online tools such as by using bank’s website.
  • You can also check online on Paisabazaar.com. If there is an offer available you could apply online and the bank will arrange a representative for you so you can get your queries answered and resolved before you file the application.

Q. How do I get to know the principal / interest breakup of the EMI paid?
 

A. HSBC Bank provides you a track record which gives you the breakup of your monthly payment and principal amount. You can visit the nearest branch or can use the phone banking or internet banking to request for your track record for your loan against property.
 

Q. What is the minimum and maximum amount of loan available for a loan against property?
 

A. The maximum and minimum amount for loan against property depends upon the property type and the city where it is located. For Mumbai and New Delhi the loan amount ranges from 3,00,000 to 10,00,00,000 and for cities like Bengaluru, Chennai, Pune, Chandigarh, Hyderabad and Jaipur the amount is 3,00,000 to 7,50,00,000 .
 

Q. HSBC Bank has launched a SmartlAP (smart loan against property). Can the amount which is already taken for a loan against property be switched with SmartlAP?
 

A. Post disbursement, a loan against property cannot be converted into a smart loan against property.
 

Q. What is the department to resolve queries regarding loan against property or any other assistance required?
 

A. You can always visit the nearest HSBC branch or can use their phone banking or internet banking facility to reach out to your relationship manager.