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Loan Against Property

There is some expenditure which is certain in nature and there are some which rather come unexpectedly. We always make provisions for such certain expenses to meet our goal by saving and investment for certain events in our life. We can do this because we know approximately the amount which is required for accomplishment of that event. These costs may be due for your child’s higher education, marriage, etc. or for business expenses. However, the savings or investment that we are making might or might not yield the desired result. In such a scenario, the only solution is loan. Among the many loans that people can take to tide over an unavoidable expenditure, the best is perhaps a loan against property.

Induslnd Bank gives utmost importance to their customer responsiveness so that their customers are fully satisfied with their services. The aim of the bank is to be a leader in the market place in terms of productivity, profitability and efficiency. A property loan from IndusInd Bank helps in meeting all financial needs and allows the person to take care of any personal or business expenses.

IndusInd Bank is a constantly growing as medium sized bank which provides a range of products such as savings, current, home loan, personal loan, loan against property etc. The bank offers products which cater to all the categories of individuals in the market thereby meeting their all kinds of requirements as well in terms of business and personal. Keeping this in mind, the bank has come up with a product named loan against property which is a one stop solution for all such needs.

This loan from IndusInd Bank has a wide range of uses because the loans are issued for different purposes. There is Absolute transparency in the dealings and transactions in the loan process make it all the more special.
Why one avails a loan against property for personal and business requirements? Reasons could be the following:-
 

  • Renovating home.
  • Family vacation.
  • Capital requirement for business.
  • Fund needed in emergency for medical treatments.
 
Before availing an Induslnd Bank property loan, there are certain things you should keep in mind. Following are the key factors to be considered before you avail a loan against property scheme from Induslnd Bank or any other bank:
 
  • Rate of interest: Loan liability and interest rate is one crucial factor which should be taken into consideration before one avails the loan. Usually, the bank lends loan against property at 10.75% to 14% interest rate which is normally available as both fixed as well floating interest rates. If a bank is offering fixed interest rate then it usually comes with a reset clause of 3 to 6 years. This means that your rate of interest will be renewed every 3 to 6 years. Based on the market condition, the bank might increase or decrease the rate as per the terms and condition mentioned in the clause.
  • Loan amount: Mostly banks lend at 50% to 65% of the financial worth of your property or twice your annual income as a loan against property. The amount of financing ranges from Rs. 5 lakh to Rs. 20 crore depending on the loan to value ratio (LTV). The amount of loan you want to avail is one major factor in addition to other significant factors.
  • Eligibility factor: To avail an Induslnd Bank property loan, the applicants must be at least a minimum 21 years of age when he applies for the loan against property. He or she can be a salaried individual, a self employed professional or a businessman, but the property against which the loan is to be taken should be in the name of the individual. Any kind of property including residential, commercial, open plot, industrial, under-development, etc. can be used to get a loan against property.
  • EMI and tenure: The maximum repayment period offered by any of the banks is for 15 years. Some of the banks also keep loan tenure depending upon applicants age so as to ensure that loan repayment period ends before their retirement age. This age is usually 65 years for self employed individuals and 60 years for salaried persons.
  • Processing fee: Processing fee charges vary from one bank to another. Therefore, it is always suggested to check this factor before you select your lender bank. Usually the bank charges a processing fee up to 3% for a loan against property.
  • Other charges: Apart from all such factors and charges, one must also check other charges such as pre-payment charges, documentation charges, penal charges, etc. levied by the bank. A bank may also charge a small penalty if you are planning to pay off your loan before the tenure period. Other factors which banks consider before lending the loan amount are profile of a customer, valuation of the property, past track record with other banking institutions, existing loans, and regular outgoings.
 
Various types of property loan from IndusInd Bank are:-
 
  • Loan against home: Residential properties can be made as security to get loan against property.
  • Loan against commercial property: Property where one carries out his/her business also can be put under collateral to avail the facility of loan against property.
  • Loan for commercial property purchase: For commercial property purchase also LAP can be taken.
  • Funding against rentals from commercial property: If a commercial property is rented out, the loan against property can be taken against that rented income also.
  • Balance Transfer: Balance outstanding from other lenders can be bought here in this bank and one can avail the advantage of low rate of interest.
  • Top up loans: Existing loans can be further enhanced as well.
Loan Tenor
 
  • Maximum Loan tenor is 15 years.
  • Minimum Amount: Rs. 10 lakh
  • Loans upto 65% of the property value.

Who all can apply for Loan Against Property from Induslnd Bank?

Loan against property is given to the following segments of customers:-
 

  • Individuals /Proprietorship business: Individuals are given loan against property or business owners with proprietorship nature are also given loan against property.
  • Partnership firms: Firms which is running in partnership are provided with loan against property.
  • Private Limited Companies: Private Limited companies are also eligible to apply.
  • Closely held Public Ltd. Companies: Companies that are not listed in any stock exchange are eligible.


The following people are eligible for loan against property from IndusInd Bank:-
 

  • Salaried:
     
  1. Individuals employed permanently in Public Sector Undertakings, Government Undertaking, Multi National Company, Listed public limited companies or reputed private limited companies are eligible to apply.
  2. Minimum Age: 21 Years
  3. Maximum Age: The maximum age at the time of loan maturity should be lower than the retirement age.
  4. Minimum income Rs. 30,000 gross salary per month.
  5. Minimum experience required is 3 years.
  • Self Employed Professional/ Non Professional:
     
  1. Chartered Accountants, Doctors, Cost Accountants, Engineers, Architects, Company Secretary, Chartered Financial Analysts are eligible.
     
    1. Minimum Age: 21 Years
    2. Maximum Age: The maximum age at the time of loan maturity should be lower than 70 years.
  • Self Employed Non Professional:
     
  1. Chartered Accountants, Doctors, Cost Accountants, Engineers, Architects, Company Secretary, Chartered Financial Analysts are eligible.
     
    1. Minimum Age: 21 Years
    2. Maximum Age: The maximum age at the time of loan maturity should be lower than 70 years.

Unique Features of IndusInd Bank Loan Against Property

IndusInd Bank property loan has some unique features which can be summarized as below:
 

  1. Competitive interest rate with maximum loan approval.
  2. Hassle free and easy documentation.
  3. Fast approvals.
  4.  Balance Transfer at a lower rate.
  5. Market valuation of properties.
  6. Multiple assessment criteria.

Co-Applicants
 

  1. For enhancement of the loan, one can include co-applicants for the loan.

Rate of Interest
 

LAP APR is based on the minimum and maximum rate for a tenor of 10 years. The actual will again depend on the actual interest and the tenor.


For Bank ROI: Minimum rate is 10.75%, Maximum rate is 14%

                       Average is 11.60%


For Annual Percentage Rate (APR):  Minimum rate is 10.85%, Maximum rate is 14.10%   

Ways to apply for Loan Against Property in Induslnd Bank

  • In the era or digitisation, people prefer everything digital and to meet this demand of customers, Induslnd came up with an online option to apply for a mortgage loan. An online application form is obtainable where the details need to be filled up; a call back is done from the company to take it further. Another option of online application is through Paisabazaar.com where you need to fill the basic details such as name, mobile number, email address, product interested, name of state, name of the city etc. This is a hassle free process and allows you to apply for loan from the comfort level of your house or office.
  • If you are not familiar with the online process of applying for loan then you can visit any of the Induslnd Bank branches during business hours and apply for the loan. If you need any kind of assistance related with the Induslnd Bank property loan or you have any other queries, feedbacks or grievances, the bank will provide the necessary help as bank has it has an efficient customer care team. In fact, you can resolve your queries first by calling their customer service or by leaving your number or contact details on their website. The concerned representative will call you to clear your queries. You can also post your queries and it will be addressed by one of the bank representatives.

Documentation

Mandatory documentations are required with the loan application forms which are as follows:-
 

Documentation

Salaried

Self employed

Proof of KYC

  1. Legitimate Identity, residence and signature evidence.
  1. Legitimate Identity, residence and signature evidence.

Income Proof

  1. Pay Slip for previous 3 months
  2. Present Form 16 or ITR
  3. Present bank Statements for major bank account for previous 3 months where the salary is being getting credited every month.

 

 

  1. Income Tax return for previous 2 years with Profit and Loss account along with calculation of Income and Balance sheet for previous 2 years specialized by a CA including schedules and audit reports( Form 3CB &3CD)
  2. Present bank Statements for major account for previous 6 months.

 

Property documents & Other documents.

  1. Loan Application form.
  2. Duplicate property documents.
  1. Loan Application form.
  2. Duplicate property documents.

Security / Collateral / Guarantors

The Title Deed is the main collateral used to avail of the loan and as such this document should be clear, marketable and in an acceptable condition when mortgaged with the bank.

Top Up Loan

Individuals who already have availed of a loan from the bank can also avail additional loans if they face any financial requirements of personal or business nature. For taking the additional loan, the period of the existing loan should be 12 months along with a good track record of paying instalments. The individual should furnish a written application stating the reason of availing the additional finance which may include any one of the following:
 

  • For any business related need
  • For higher education of one’s child
  • For furnishing the house of the applicant
  • For meeting the expenses of one’s daughter’s marriage
  • To take a family trip or vacation
  • To buy a two-wheeler or a four-wheeler.
  • Any other valid personal or business requirement which is not illegal or speculative in nature

Steps to follow for availing the Loan Against Property

  • Application – the individual should fill and submit the relevant Application Form for availing the loan. The form should be supported by the required documentation and the applicant’s signature. A copy of the form can be downloaded from the bank’s website.
     
  • Sanction: - Bank sanctions the loan after doing the necessary due diligence and checking on the asset worth and updates the buyer through letter. Nevertheless, Bank will also correspond in letter if the same is discarded.
     
  • Disbursement: - The last step where the amount is accessible at the hand of the purchaser for their use. Loan will be pay out on:
  1. Recognition and choice of the property.
  2. Permissible and technological consent of the property.
  3. Compliance and fulfilment with all the legal formalities.

Prepayment

One can prepay the loan as mentioned above after completion of 12 months from when you starting to pay the EMI on property loan. This EMI is calculated using a specific tool to achieve greater accuracy called a loan against property EMI calculator. Many would like to take the advantage from prepayment like freedom from market risks, benefits from lower interest rates and last but not the least moving out off the burden / loan taken and completion of the loan thereafter.

LAP Agenda of Charges

Narration

Charges

1.Processing Fee

Up to 2% of loan amount

2.Defaulting Interest Rate

Interest rate linked to Base Rate.

3. Prepayment Charges - Part or full prepayment is not allowed before 12 months from the EMI starting date.

 

 

Part Pre-payment charges

  1. Individuals: As per the RBI guidelines.
  2. For others: 4% of the principal outstanding.

 

 

  1. Individuals: As per the RBI guidelines.
  2. For others: Will be allowed for an amount upto 25% of the principal outstanding every year at a charge of 0.50% inclusive of taxes 4% of the part payment amount.
  3. For Others: In a financial year maximum part prepayments allowed is 4 times and also the total amount should not increase 25% of the loan outstanding at the beginning of the year.

 

4.Late payment of EMI

2% per month on overdue amount.

5.Dulicate Repayment schedule Charges

Rs. 500/-

6. Duplicate No Due Certificate /No Objection Certificate.

Rs. 200/-

7.Cheque/ ECS/SI Dishonour Charges

Rs. 500/-

8.Service Tax , other government tax

As applicable.

9.Stamp Duty Charge per s

Based on the local rules and regulations and the type of mortgage.

10.SI/ ECS/PDC Swap Charge

Rs. 500/-

11.Personal Credit Report Issuance Charge

Rs. 50/-

12. Document Copy Charges

Rs. 500/-

13. Conversion Charges

Upto 0.75% of the principal outstanding inclusive of taxes.

14. Collection charges

Rs. 100/- for local visit to customer premises per instance and Rs.250/- per instance for to outstation visit to customer premises whether any instalment is paid or not.