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Loan Against Property

Your property can be the blessing in more than one way. You can unlock the hidden potential of your hard-earned property at times of financial crisis by availing an easy and convenient loan against your residential or commercial property.

Punjab National Bank is an Indian multinational financial and banking services company that helps you do just that. The nationalised financial corporation is based out of New Delhi, and is regarded as the third largest bank in India with total business of Rs. 9,45,526 crore (deposits of Rs. 5,53,952 crore and advances of Rs. 3,91,574) as of June 2016. The bank has over 9,600 ATMs and more than 6,800 branches across 764 cities and serves over 80 million customers. Punjab National Bank offers various credit schemes and other financial products to its customers. With a wide presence across the country and an influential network of branches, PNB property loan provide a host of unique features and benefits which is completely customised to suit your needs.

The bank offers various credit facilities to its customers and the Loan against Property scheme is a loan granted by the bank against the applicant’s property. The scheme is called Loan against Mortgage of Immovable Property and involves a lot of features and terms which are mentioned below.

Features of Loan Against Mortgage of Immovable Property

The following are the details of the loan against mortgage of immovable property offered by Punjab National Bank.

  • The loan from PNB can be put to any type of personal need or business need
  • If the loan against property is sought for personal uses, the amount of loan granted ranges between Rs. 1 lakh to Rs.5 lakh. If taken for business use, amount ranging from Rs. 5 lakh to Rs. 500 lakh can be taken as loan
  • The assessment of the limit of property loan from PNB actually granted would be done by the bank on the basis of three parameters and whichever is the lowest would be the amount sanctioned. The three parameters are:
  • A value which is not more than 75% of the value of the property
  • If the loan from PNB is taken in the form of a term loan, a maximum of three times the gross annual income or the gross profit whichever is lower
  • If taken as a overdraft, a maximum of four times of the gross annual income or the gross profit whichever is lower
  • If any individual, whether salaried or any other type of assesses takes a loan, the net income should be at least double of the EMI charged under both the term loan and overdraft facility on a reducing balance basis
  • If any business enterprise avails of a loan against property, the net income should be 1.5 times the EMI in case of term loan and the interest thereof. If overdraft facility is availed the interest and depreciation charges are added back for the computation of the net income or profit of the enterprise.
  • For a term loan, the processing fee charged by the bank is 0.90% of the amount of loan sanctioned subject to a maximum of Rs. 45,000
  • For an overdraft facility, the processing fee payable is Rs. 225 per lakh of the sanctioned amount
  • Rs. 1,500 which excludes the service tax and Education cess would be charged as documentation charges
  • Any self-occupied or vacant and unencumbered residential house or flat or a commercial or industrial property should be equitably mortgaged as security under the loan
  • The term loan availed should be repaid back along with the interest within a maximum of 120 months or before the attainment of 65 years whichever is earlier
  • For an overdraft facility, which is allowed on a Monthly Reducing Drawing Power basis, the Drawing Power would be reduced every month on a pro-rated basis
  • There are no prepayment charges applicable for prepaying the loan

Eligibility Criteria for approval of LAP from Punjab National Bank

The following individuals are eligible for a loan against property from Punjab National Bank.

  • Loans for personal needs is given to individuals who can be employees of any Central or State Government body, schools, colleges, public sector undertakings and reputed companies. Non-employed income tax assesses can also avail of the loan. The age of the applicant should not be above 60 years
  • Business enterprises seeking loan should be existing customers of the bank with a satisfactory track record in the last three years. The track record is depicted by the cash profits in the last 3 years and net profit in the immediately preceding year
  • Salaried employees should have a minimum net monthly salary of Rs. 10,000 in the last three years. Other income tax assesses should have a minimum net annual income of Rs. 1.2 lakh. Business enterprises availing the loan against property should have a minimum net annual income or net profit of Rs. 1.2 lakh and above

Interest rate for PNB’s LAP

The rate of interest payable on the loan against property in PNB would range from Base Rate + 1.65% to Base Rate + 5.40% depending on the risk rating or the PNB Score. Since the Base Rate is 9.60%, the applicable range becomes 11.25% to 15% per annum.

The bank also allows a concession in the rate of interest on the basis of the realizable value of the mortgaged property. If the value above 200% to 250% of the loan amount, the concession is 0.25%, above 250% to 300% of the loan amount the concession is 0.50% and for values above 300% of the loan amount, the concession is 0.75%.

Term loans which are repayable in 3 years or more would attract an additional term premium of 0.50% per annum.

It is the responsibility of a borrower of loan against property from Punjab National Bank to pay off all equated monthly instalments beforehand to avail the loan from PNB. In case of defaults the right of his / her property will go to the bank. The bank will take the custody of his / her mortgage, thereby becoming the new owner of the property.

Documentation to be Submitted with Loan Application for a PNB Property Loan

Aapplicants intending to avail a property loan from PNB have to submit the following documents for quick processing of their loan application:

  1. Common Documents
  • Address and age proof of the applicant(s) and guarantor(s) in the form of any one of the following documents:
    • Voter identification card
    • Passport
    • SSC certificate
    • PAN card
    • Ration card
    • Driving licence
  • Net worth statements certified by a chartered accountant containing details of the assets and liabilities of the borrower and / or guarantor when the amount of loan sought is greater than or equal to Rs. 25 lakh (the format of the net worth statement is available at Corporation Bank branches)
  • 2 coloured passport size photographs of the loan applicant, co-applicant(s) and guarantor
  • Property title documents and / or all the link documents which provide the evidence of the title of the property such as sale deed and earlier title deeds
  • Updated encumbrance certificate for the previous 13 years
  • Latest property tax paid receipts
  • Legal opinion from Corporation Bank approved advocate on the title to property
  • Copies of approved plan and building licence
  • Property valuation report from approved civil engineer
  • Copy of Occupancy Certificate (OC) issued by the appropriate local authority
  1. Income Proof and Other Documents

For salaried individuals:

  • Salary slip or salary certificate of previous 3 months (showing particulars of deductions for other loans, if any)
  • Income tax assessment order or income tax returns for previous 3 years

For professionals:

  • Copies of the balance sheet and income statement for the previous 3 years certified by a chartered accountant
  • Income tax assessment order or income tax returns for previous 3 years
  • Bank account statement from the existing banker for previous 6 months

For businessmen:

  • Copies of the balance sheet and profit & loss account for the previous 3 years certified by a chartered accountant
  • Income tax assessment order or income tax returns and tax paid receipt for previous 3 years
  • Bank account statement from the existing banker for previous 6 months

If the applicant is not an account holder, he / she will have to give post-dated cheques or ECS mandate for EMI repayment through their bank account.

  1. Property documents:
  • Registered sale deeds / conveyance / lease deeds
  • Past sale deeds chain (each transaction in respect of this property since first allotment)
  • Latest house tax returns / receipts
  • Approved building plan from municipal corporation

Loan Against Property EMI Calculator

Punjab National Bank loan against property EMI calculator on the website helps in calculating the EMI on property loan which is required to be paid each month. For this purpose, one has to put in the needed principal amount, tenure (in years) and the interest rate in the calculator. Once everything is put in the calculator, it shows the approximate monthly EMI on the property loan from Punjab National Bank. One can even proceed to one-click loan approval from this section.

It helps in determining the total payments due and gives a break-up of the loan amount and repayment process. The EMI on PNB property loan is arrived at on the basis of loan tenure and the rate of interest. The EMI calculator gives the ratio of the principal amount to the interest due. It also shows a disbursement table which helps in the careful planning of repayment of loan against property. An important thing to remember is that the EMI calculator only gives approximate values. The figures should not be considered as final calculations.

Punjab National Bank Loan Against Property Top Up and Transfer Features

A property loan from PNB offers an exclusive benefit to its customers. The balance of the loan against property can be transferred from another bank. However, this element is subject to the eligibility criteria of the bank. You can avail additional loan against property from SBI, subject to your eligibility.

Apply for the Loan Against Property from Punjab National Bank

The Punjab National Bank property loan can be applied only through the branches of the bank by obtaining and filling the required application form. The online application facility is not available for the Loan Against Property scheme. However, you can log on to Paisabazaar.com in order to compare various home loan options you qualify for vs. the home loan option offered by PNB. The bank has a special team assigned to deal with the queries related to loan against property. 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 address your doubts. You can also post your inquiries and it will be addressed by one of the bank representatives.

Advantages of taking Loan Against Property from Punjab National Bank

  • The bank offers an extensive range of loan products like loan for purchase and construction of commercial property, loan against commercial and residential property and lease rental discounting
  • It has a PAN India branch network.
  • Robust service delivery model with door step services ensuring easy and fast approval and disbursal of loan.
  • Excellent post disbursement services.
  • Facility of enhancement in loan amount in the event of escalation of cost
  • Dedicated team of well experienced employees on work on best in class information systems and network to deliver and provide customer satisfaction
  • High standards of ethics, transparency and integrity
  • Multiple repayment options

FAQs on Loan Against Property from Punjab National Bank

Q. What is the quantum of loan to be financed by the bank?

Ans. The quantum of the standard Punjab National Bank loan is in the range of Rs. 1 lakh to Rs. 5 lakh for personal needs and Rs. 10 lakh to Rs. 2 crore for business needs. The quantum of loan is also dependent on the repayment capacity of applicant and the value of the property.

Q. What are PNB loan against property charges?

Ans. The bank does not have any credit or non -credit service related charges. The bank charges nil for forex related services. However, the bank may charge extant penalty for delayed repayments of loans and the charge applicable would be 2% above the normal rate of interest. IMPS transaction charges @ Rs. 5 + service tax per transaction will be applicable.

Q. What kinds of properties are accepted for a loan against property?

Ans. A loan against property is given against immovable residential and commercial properties such as flats, plots, pieces of land, etc.

Common types of properties which qualify for a loan against property:

  • Self-occupied residence
  • Self-occupied commercial property
  • Rented residential property
  • Rented commercial property

Q. What is the repayment period on a loan against property offered by the bank? What are the other conditions for repayment of such a loan from PNB?

Ans. Loan amount along with applicable interest should be repaid through a maximum of 120 Equated monthly installments (EMIs), or by the time the borrower reaches 65 years of age, whichever is earlier. If the loan is sanctioned through overdraft facility with Monthly Reducing Drawing Power method, the drawing power of the loan account is reduced each month on a pro-rata basis.

Q. Are there any specific income criteria for availing PNB property loan?

Ans. For salaried and other income tax assessee, the minimum net monthly salary is Rs. 10,000 for last three years. This is restricted to salaried class or minimum net annual income of Rs 1,20,000 (for other income tax assess). And for a business enterprise, the minimum net annual income or net profits will be Rs. 1,20,000 and above.