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Loan Against Property

Banking institutions are advancing in our country and are coming up with new and innovative financial products and services for their customers. A loan against property is amongst the many loan options available with Indian banks. This loan is allows the borrowers to borrow a large sum of money against their collateral. Ownership rights of the property will be transferred to the bank only if the borrower fails to repay the loan amount.


State Bank of Mysore property loan is one of the fundamental loan products offered by the bank. Loan against property in State Bank of Mysore is available to meet large expenditures such as business expenses, medical emergencies or marriage ceremonies, among others. This property loan from State Bank of Mysore provides retail individuals with a way to meet any type of expenses by providing a property or land as the underlying security with the bank. Over the years, the bank has helped numerous customers fulfil their fiscal needs through this necessary product.

Features of State Bank of Mysore Property Loan

The loan against property scheme of the bank is popular because of its numerous customer-friendly features and benefits. Listed below are some of these features and benefits:
 

  • A higher amount of loan is available for longer tenure which means you face lesser burden in paying the monthly instalments as compared to conventional loans.
  • The property loan from State Bank of Mysore is available at lower interest rate than most other loans.
  • Bank accepts any kind of property as security, including commercial, residential and even leased-out property.
  • It is a good tool for debt consolidation.
  • You can also take this loan to buy other property.
  • Loan amount can be used for both personal needs and business purposes.
  • Loan from State Bank of Mysore is favoured as the documentation and approval process is customer friendly and fast.
  • EMI on property loan is very less as compared to other regular loans and can calculated using a loan against property EMI calculator by anyone looking for such a loan.
  • The loan is extended to the borrower based on market value of the property. This also ensures that the bank is protected from any kind of cyclical fluctuations in the market of real estate and drop in prices.

Prepayment and Late Fee Charges

The word prepayment means to repay the loan before its tenure is completed. State Bank of Mysore property loan charges can be enquired from the nearest branch. Service tax or any other tax is applicable as the latest rate prevailing in the market. The maximum amount and minimum loan amount depends upon the value of your property as decided by the bank. Bank also charges late fees if you fail to repay the amount on the mentioned date.

Property loan from State Bank of Mysore Interest Rate

The bank’s loan liability and interest rate is decided keeping in mind convenience of the customer. Interest rate is 12.55% onwards. Any changes in the bank policy or guidelines or interest rate are brought to the notice of customers. This keeps them updated about changes in bank’s term and condition. Any changes in fees and charges are specified from time to time and notice duly given to existing customers. The bank reviews says that its interest rate is one of the main reason that many businesses are attracted towards opting for a loan from State Bank of Mysore.

Loan from State Bank of Mysore and its Tax Benefits

If you are planning to take a home loan from State Bank of Mysore, then you can enjoy the tax incentives and benefits under Chapter VI and section 24(b) of the Income Tax Act, 1961. You can claim up to Rs. 1.5 lakh in deduction on the principal under section 80C of Chapter VI and up to Rs. 2 lakh on your interest under section 24(b). However, no exemptions are provided for a loan against property.

Important things to consider

  • In the event that the subject applicant’s loan application is rejected by the State Bank of Mysore due to any reason, there is a possibility that the fact of such rejection is communicated by the State Bank of Mysore to CIBIL (agency), which, in turn, might have a negative bearing on the CIBIL Score of the applicant.
  • The applicant needs to ensure that the EMI’s which exists in his or her name against all loans and credit card dues (irrespective of whether the same is with State Bank of Mysore or with other banks) does not account for more than 60% of the net in hand income drawn by the applicant per month.
  • The applicant needs to ensure that he or she has not defaulted in repayment of any debt obligation either with the State Bank of Mysore or with other banks with respect to loans or credit card dues. The same is due to the fact that any such past incurrence of default to the bank shall be taken note of by CIBIL subject to reporting of the same by the Bank, which can in turn negatively impact the CIBIL score.
  • As the CIBIL score of the applicant is also assessed by Bank officials prior to any loan disbursement either at a retail or corporate level and the State Bank of Mysore officials is likely to take note of any such part instance of default with banks, the aforesaid requirement becomes all the more important for the applicant to execute & implement.
  • It is also advisable for the applicant to get their CIBIL scores checked online by paying the nominal fee which may be required for the purpose of extraction of the report and try to keep the score as high as possible by paying off all types of dues in a timely manner without any instance of delay.
  • The same carries weight as a lot of banks & financials institutions usually refer to the CIBIL report before acceding to the proposal for disbursement of funds to the applicant concerned. However, though the CIBIL agency does not normally contain any erroneous entry, it may be possible in the event that the Bank supplies the wrong information to CIBIL agency.
  • It is also important for the applicant to ensure that he or she meets State Bank of Mysore’s basic eligibility criteria with regard to income or profession (i.e. whether job or self-employed) to ensure non-rejection of the loan application form at the very earliest.
  • It also pertinent to note that the applicant needs to ensure that the property against he is seeking the loan is not a vacant land or an illegal property sanctioned by an unauthorized agent. It is also mandatory for the applicant to submit all requisite documents relating to the title for the property along with its approved sanction plan as an annexure to the main loan application form.
  • The applicant is mandatorily required to provide an underlying security against the loan facility which in this case is the equitable mortgage of any residential house which is unencumbered in nature. It may also be in the nature of any urban commercial property in the name of the applicant which has been acquired either by self or is in the nature of an industrial property. Rented out property will be accepted as security only where lease is in existence in favour of corporation of good standing and repute. Power of attorney authorizing the Bank to collect rent should be given.
  • Apart from the security per se, the applicant is also required to furnish a margin amounting to about 50% of the market value of the underlying security to the bank as an added security & collateral benefit. The margin may be dipped into by the bank officials to meet any shortfall in its debt obligations and is more in the nature of a debt service coverage account.
  • The Loan against Property (LAP) is usually repayable in 84 equated monthly instalments in the case of State Bank of Mysore. This apart, 1.25% of the loan amount is payable by the applicant as processing fee. However, the same is usually one time in nature.

Documentation

The scanned copies of the following documents need to be submitted to avail loan against property:
 

  • ID Proof: Passport/ Voter ID Card/ Driving License
  • Address Proof: Ration Card/ Electricity Bill/ Telephone Bill/ Rental Agreement/ Passport
  • Bank statement of last 3 months or Bank passbook statement of last 6 months
  • Form 16
  • Recent salary slip
  • 6 Passport-sized photographs

Applying Online

For the purpose of convenience of the new applicants, the State Bank of Mysore has made the facility of Loan against Property (LAP) available online which is accessible through its website. You can apply loan against property from State Bank of Mysore by visiting the Paisabazaar website and filling up a form online. The process for the same is detailed below:
 

  • Fill in the loan against property application page
  • Select loan schemes from the list of loan offers
  • Choose loan against property scheme from State Bank of Mysore
  • Submit the scanned copies of your documents
  • Click ‘Apply’

The loan is usually disbursed by the bank within a very short period of time post completion of the necessary basic credit related formalities by the bank officials regarding the credit worthiness of the applicant etc. Hence the customer can be rest assured of a peaceful & hassle free loan approval process as the whole process is properly documented with little scope for any gaps or lacunas. The applicant is only required to visit the bank’s official website, navigate to the relevant portion, supply the requisite information as required, furnish the desired documents and thereafter the loan is sanctioned in a short period subject to the scrutiny of the bank officials.


Some of the basic details or inputs which needs to be furnished by the applicant in the portal of the State Bank of Mysore includes personal details like name, age, address, occupation, income, etc. which are in turn verified by the bank officials to ascertain if the individual applicant meets the minimum eligibility criteria of the bank for availing the loan.


In the event that the background of the applicant meets the required eligibility criteria of State Bank of Mysore and all the documentation requirements have been successfully conducted and verified, the bank officials can proceed towards disbursement of the instant loan.