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Loan Against Property

The Oriental Bank of Commerce offers two types of Loan Against Property: one is the Oriental Business Scheme and the second one is Oriental Mortgage Loan Scheme. In this section, we will take a closer look at the two types or subcategories of the OBC Loan Against Property.

The Oriental Bank of Commerce is a public sector bank in India. It was made a nationalized bank in the year 1980. Oriental Bank of Commerce was originally established in 1943 in the city of Lahore, in what is now, Pakistan. After the Partition, Oriental Bank of Commerce shifted its registered office to Amritsar in India but honoured its commitments to its customers in Pakistan by paying every rupee back to them. The bank acquired both Bari Doab Bank as well as the Punjab Cooperative Bank in the year 1997; while it amalgamated the Global Trust bank in the year 2014.

Oriental Bank of Commerce has faced many vicissitudes in its fortunes since it was founded, however, it has maintained a steadfast commitment to improvement and quality service and professionalism, and has today emerged as a successful contender in the Indian banking financial industry. Oriental Bank has a three-fold mission statement that makes it clear to its customers that the bank is committed to provide quality service along with the latest technology, to improve the professional skills of its personnel and to increase the wealth of its stakeholders and customers. The bank has since started services such as mobile banking, internet banking and phone banking. It has created many schemes for minorities, women and rural sectors, so that their lives and finances may be bettered.

Features of the OBC Bank Loan against Property - Oriental Mortgage Loan Scheme

  1. Features of the OBC Bank Loan against Property - Oriental Mortgage Loan Scheme
     
  1. The following are the key features of Oriental Mortgage Loan Scheme
  • Loan from OBC offers overdraft facility against immovable property that can be used for financing personal expenses or to invest in a business, etc.
  • Loan applicants who are salaried employees are eligible for the Oriental Mortgage Loan Scheme wherein they may avail of a term loan that they may repay within a maximum timeframe of 84 months. Salaried applicants get access to an overdraft facility, which is renewed, on an annual basis. Salaried employees who will get pension there is a 15% progressively reducing limit of the original sanctioned limit that will start once the applicant reaches 63 years old. For non-pensioners, the reduction will start 7 years before superannuation.
  • Business entities that apply for an Oriental Mortgage Loan Scheme can get a term loan with a repayment period of 84 months. They may also get the Overdraft facility with a repayment period of 84 months that will be subjected to a yearly review and a progressively reducing limit at 15%, so that the facility is liquidated within seven years. Business entities are eligible for one more facility that is a combo offer of a term loan plus overdraft facility. In this sixty percent of the loan will be in the form of the term loan that is to be repaid in 84 months, while the balance forty percent is in the form of an Overdraft that is non-reducing and that is renewed on a yearly basis.
  • OBC charges rates of interest that are competitive as per industry standards. If there is any irregularity for any reason, the interest rate will be increased by 2%. OBC charges a floating rate of interest at 11.95%.
  • The maximum amount that can be availed through this loan is Rs. 5 crore.
  • As a form of security, Oriental Bank of Commerce accepts the mortgage of residential, or commercial or industrial property that should be in the name of the loan applicant along with his or her close relatives, such as the applicants’ spouse, children, parents, or joint owners of the property, or a company or firm.
  • For the Oriental Mortgage Scheme, it is mandatory for the applicant to provide a co-applicant or guarantor.
  • The Oriental Mortgage Loan Scheme has a maximum payable age of 75 years (of the guarantor). This means that the loan needs to be repaid before the guarantor turns 75 years old.
  • Oriental Bank of Commerce asks for the basic KYC documents that are normally asked by banks, this documentation will include the loan applicant’s Form 16 or Income Tax Returns for the previous two years. The applicant is informed at the outset about the documents that he or she will have to provide by OBC personnel so that there are no delays in the loan application process.
  1. Eligibility Criteria
     
  • Individuals/joint borrowers who are salaried employees or who may be self-employed and professionals, may apply for this loan, provided they have proof of previous two years Income Tax Returns
  • Individuals who are engaged in agriculture and its allied activities may apply for this loan
  • Any company or firm may apply for this loan jointly with their directors or partners, provided the security is owned by the director or partner or by the company or firm itself. The income that is generated by the company will also be considered by the bank before approving or rejecting the application.
  1. How Oriental Bank of Commerce asses the loan limit of its Oriental Mortgage Loan Scheme
     

Oriental Bank of Commerce will set the loan limit on the basis of the following points-
 

  • The loan limit for salaried applicants will be set by computing the applicant’s gross income for 36 months
  • Non-salaried applicants who earn an income will have their loan limit set as per four times their average net yearly income for the previous two to three years
  • Fifty percent of the realizable value of the applicants’ property will be considered.
  • OBC will consider the above points taking into consideration the repayment capacity of the loan applicant
  • The loan applicants’ net take home should not be less than 30% of his or her gross income after deducting tax and the EMI of the loan (term loan) or the monthly servicing of principal and interest (Overdraft facility).
  1. Documents required for the Oriental Mortgage Loan Scheme
  • Passport size photographs of the loan applicant, co-applicant and guarantor
  • Proof of Residence that may be in the form of a copy of the Ration Card, Telephone Bill, Passport, Electricity Bill or Voters ID Card
  • Proof of Identity that can be in the form of a copy of a Passport, Voter’s ID Card, Driver’s License, PAN Card or Employer’s Card
  • Income Proof in the form of the Income Tax Returns or Form 16 of the past two to three years
  • Copy of all the applicable papers of the property that the applicant is pledging as collateral.
  1. Charges applicable to the Oriental Mortgage Loan Scheme
     

Processing Fee

Term Loan

0.50% of the Loan amount plus Service Tax, if any (This is a onetime charge)

Overdraft Limit

0.10% of the loan amount plus Service Tax, if any (Recurring charge). This fee is charged at the time of the renewal of the Overdraft Limit.

Documentation Charges

Loan amount up to Rs. 2 lakh

NIL

Loan amount over Rs. 2 lakh to 10 lakh

Rs. 1,000

Loan amount over Rs. 10 lakh to Rs. 25 lakh

Rs. 2,500

Loan amount over Rs. 25 lakh to 50 lakh

Rs. 5,000

Loan amount over Rs. 50 lakh to 100 lakh

Rs. 10,000

Loan amount over Rs. 100 lakh

Rs. 15,000

Features of the OBC Bank Loan Against Property - Oriental Business Loan Scheme

  1. The following are the key features of the Oriental Business Loan Scheme:
     
  • OBC offers this loan or overdraft facility to provide credit for working capital needs or to increase long-term margin of businesses or to finance fixed assets that are related to the business activity or to expand the business to traders, etc.
  • Under the Oriental Business Loan against property scheme, Oriental Bank of Commerce provides an overdraft limit for the purpose of providing a working capital. A term loan or demand loan is available that may be used obtain fixed assets for business purposes and to provide a non fund based limit for the above.
  • Property loan from OBC charges rates of interest that are competitive as per industry standards. If there is any irregularity for any reason, the interest rate will be increased by 2%. OBC charges a floating rate of interest at 11.95%.
  • The maximum amount that can be availed through this loan from OBC is Rs. 5 crore.
  • As a form of security, Oriental Bank of Commerce accepts the mortgage of factory or industrial property that should be in the name of the loan applicant along with his or her close relatives, such as the applicants’ spouse, children, parents, or joint owners or promoters, who also stand as guarantors.
  • For the Oriental Bank of Commerce property loan, it is mandatory for the applicant to provide a co-applicant or guarantor
  •  The timeframe of the overdraft limit is 12 months, which is reviewed annually. The timeframe of the term loan or demand loan is for a maximum of 84 months, inclusive of the moratorium period of three months
  • Oriental Bank of Commerce asks for the basic KYC documents that are normally asked by banks, this documentation will include the loan applicant’s Form 16 or Income Tax Returns for the previous two years. The applicant is informed at the outset about the documents that he or she will have to provide by OBC personnel so that there are no delays in the loan application process
  •  Property loan from OBC does not charge any prepayment penalties on its Oriental Business Loan Scheme                                                             
  1. Eligibility Criteria:
     
  • Private and public firms, or proprietorships or partnership firms that have business activity of at least one year with satisfactory income and dealings may avail this OBC property loan
  • Businesses that have been established by close relatives of the loan applicant who is an existing customer of Oriental Bank of Commerce, having satisfactory income and dealings is eligible for loan against property may also apply for this loan from OBC, even if it is in existence for less than a year
  • Businesses that fulfil the necessary statutory requirements, like State/Central Sales Tax Registration Certificate, License under Shops & Commercial Establishment Act, etc., may avail this loan
  • Oriental Bank of Commerce will place precedence on the cash generating and repayment capacities of the businesses when approving or rejecting the loan
  1. How Oriental Bank of Commerce assesses the loan limit of its Oriental Business Loan Scheme
     

Oriental Bank of Commerce will set the loan limit on the basis of the following points-
 

  • For the loan taken as Working Capital Finance - Fifty percent of the realizable value of the applicants’ property will be considered. Or 20% of the business’ estimated annual sales or annual income where the financial statements of the business may be available. If the financial statements are not available then four times the annual income may be considered, whichever is less
  •  For the OBC property loan taken as Term Loan - Fifty percent of the realizable value of the applicants’ property will be considered. Or 75% of the business’ assets that is to be created out of the term loan, whichever is less.
  • The Term Loan and the Working Capital Finance put together should not be in excess of 50% of the realizable value of the property that the bank takes as collateral security.
     
  1. Documents required for the Oriental Business Loan Scheme
     
  • Passport size photographs of the loan applicant, co-applicant and guarantor
  • Proof of Residence that may be in the form of a copy of the Ration Card, Telephone Bill, Passport, Electricity Bill or Voters ID Card
  • Proof of Identity that can be in the form of a copy of a Passport, Voter’s ID Card, Driver’s License, PAN Card or Employer’s Card
  • Income Proof in the form of the Income Tax Returns or Form 16 of the past two to three years
  • Copies of all the relevant Property Papers of the property that the applicant chooses to pledge as collateral for the loan
     
  1. Charges applicable on the Oriental Business Loan Scheme
     

Processing Fee

Term Loan

NIL

Overdraft Limit

NIL

Loan Against Property EMI Calculator from Oriental Bank of Commerce

  • EMI on property loan is a pre-determined amount that needs to be paid each month towards repayment of your loan till the loan is paid off in full.
  • OBC loan against property EMI Calculator can help you calculate the monthly EMI on property loan at the lowest possible interest rate and also ensure you can check the lowest EMI applicable to your loan against property.
  • It allows you to plan your loan repayment amount as per your capacity to repay the loan as higher loan amounts lead to higher EMI payouts.
  • Loan liability and interest rate is an important factor which affects your EMI on property loan, as higher the interest rate, higher will be the EMI.
  • Loan tenure is another crucial factor as longer loan tenure reduces your individual EMI, though the overall payout over the loan tenure increases.

Benefits of Calculating Loan Against Property EMI

  • Loan against property EMI calculator makes your calculations better while checking your expected monthly equated monthly instalment at different rates of interest
  • The calculator for property loan from OBC helps you determine your loan repayment capacity after deduction of your monthly expenses
  • You get estimate of your monthly EMI payouts which can help you plan your monthly budget accordingly.

Factors that Influence the LAP Eligibility from Oriental Bank of Commerce

Oriental Bank of Commerce loan against property eligibility relies upon a range of factors and one of the most important factors is your ability to repay the loan. The key factors on which the LAP eligibility of an applicant depends include:
 

  • Age: Loan against property in OBC is usually up to max. tenure of 18 years if the borrower’s age does not exceed 60 years in case of salaried people and 65 years for self employed individuals.
  • Value of the Property: OBC decides your loan amount based on the valuation of the property which you intend to use as loan collateral. OBC keeps a margin on the loan i.e. the amount lent is only a percentage of the property’s market value. Ratio of loan amount to property value is termed as the Loan to Value (LTV) ratio. OBC’s max. LTV stands at 60% in case of property loans.
  • Repayment Capacity of the Borrower: Your max. loan amount eligibility to take a loan against property mainly depends upon your repayment capacity i.e. maximum EMI that you can pay. OBC initiates a credit history check through CIBIL, Equifax or Experian. This provides the bank with your repayment track record with respect to credit cards and prior loans which may impact your eligibility for loan against property. If you have any other loan outstanding that you are paying an EMI for, then you are supposed to close your loan to better your loan against property eligibility. Though there is no credit score cut off specified by the bank, a score that is closer to 900 is deemed to be better for getting your LAP sanctioned.

    To reduce your EMI burden, OBC gives you a max. tenure of 18 years for repayment on loan amounts as high as Rs.1 crore provided at a rate 2.25% over OBC’s 1 Year MCLR. Lower tenures are also available so opt for a loan tenure that suits you as per your financial situation. Longer the loan tenure, higher will be loan amount eligibility.

How to apply online for the Oriental Bank of Commerce’s Loan Against Property

Individuals or groups of individuals who are seeking a loan against property may avail of one very conveniently through the Oriental Bank of Commerce website. They can also log on to Paisabazaar.com to check out LAP options they qualify for before they select one that suits their specific requirement. To apply for a loan against property in OBC, you need to visit bank’s official website. Thus, the applicant does not even have to leave the comfort of his or her home or office and may apply for the loan against property through Oriental Bank of Commerce online portal without hassles.
 

On the right hand side of the OBC homepage you will see the term ‘OBC eZBanking’. Under this term, they will see a tab for ‘Online Other Loan’. Clicking on this tab opens a fresh page wherein the applicant may fill in the necessary fields with the required data and submit their loan application when all the details have been mentioned by clicking on the submit button located at the bottom of the page.

Why do customers choose to avail a Loan Against Property from Oriental Bank of Commerce?

Oriental Bank of Commerce provides many different services, products and facilities for its customers. Among these are OBC’s Loan against property options. Under the OBC loan against property product list, there are two subcategories – one is, Oriental Mortgage Loan Scheme and the other is, Oriental Business Loan Scheme. Thus, the Oriental Bank of Commerce Loan against Property has broad usage and according to their particular needs, the customer can choose which loan he or she will require. With its vision in mind, that is “To be a customer friendly premier bank committed to enhancing stakeholder value”, along with the bank’s mission statement, customers are sure to receive the best banking services from Oriental Bank of Commerce.
 

The bank personnel are well trained and professional, they are taught to be highly empathetic and every interaction with them leaves the customer with the feeling that their finances and wealth are in highly capable hands. The personnel ensure that the customer understands every aspect of the Loan against property. They guide them towards opting for the loan category that is best suited for their needs and give complete clarification about every fees or charges that would be levied on the customers. The customers do not need to fear being subjected to hidden costs and charges, and every query or doubt is skilfully handled and addressed by the OBC personnel. Along with the above, OBC’s Loan Against Property is flexible in nature with competitive rates of interest and wide range of purposes for which it may be availed. All these factors are important to customers of Oriental Bank of Commerce who opt for availing the Loan against Property from them.