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Loan Against Property

State Bank of Patiala is an associate bank of the State Bank Group. Originally founded in 1917, the bank is headquartered in Patiala in the state of Punjab. The bank has over 1,300 branches across all parts of the country, though its presence is considerably more in the northern and western parts of India. The bank offers attractive savings products and loan schemes for all types of customers, including corporates, small and medium entrepreneurs, traders, farmers, salaried individuals, pensioners, students and even children. State Bank of Patiala through its diversified portfolio of loan caters the needs of every customer segment with almost every financial requirement. Loan against property is offered under individual loan segment. This loan can be availed by mortgaging an existing property and meet the financial requirements. Basically, this type of loan will fulfil a person’s needs in times of necessity.

The loan against property is given to individuals and businesses in lieu of a mortgage of a lien-free property. The property in question can be a residential building or a commercial one, whether to let out or being used for own purposes. With a loan against property from State Bank of Patiala, the ownership of the collateral property remains with the borrower only. But in case the borrower fails to repay the loan, then the bank can repossess the property and to settle the loan.

State Bank of Patiala - Easy Loan Scheme for Individuals (Loan Against Equitable Mortgage of Property)

The product offered by State Bank of Patiala is diversified and exclusively designed to meet the requirements of a borrower depending on the nature of the requirement. With an extremely simple and hassle free process, this bank ensures their applicants should get the loan amount in minimal time.
 

The key features and benefit of State bank of Patiala property loan are:
 

  • State Bank of Patiala Easy Loan Scheme (Mortgage Loan) is general purpose of individual and the loan is provided against the collateral security of immovable property.
  • The property loan is sanctioned to applicants to a maximum age limit of 60 years.
  • Loan amount can be sanctioned is minimum subject to either Principal (as per EMI chart) corresponding to the EMI taken as ½ of Net Monthly Income or 50 % of the value of property. The valuation is done from third party valuation agency for correct and transparent procedure.
  • However, this could be of Minimum Rs. 5 lakh and maximum Rs. 1 crore.
  • The tenure would be of 60 months i.e. 5 years
  • Processing fee would be charged @ 2.02% of the limit sanctioned (upfront) maximum Rs. 50,933/-
  • EMI on property loan is less because the tenure of loan is longer.
  • The collateral properties are equitable mortgage of non-encumbered flat/residential house, non-agriculture urban landed property, industrial or commercial property registered in the name and ownership of the borrower. The mortgaged property should be absolute unencumbered and marketable to the satisfaction of the Bank.
  • Disbursement of the loan amount shall be done once a valid mortgage (equitable or registered if equitable mortgage is not possible) has been created in favour of the Bank as per the laws of the State

Eligibility

  • Following individuals are eligible for loan against property:
  • Above 18 years of age up to 60 years.
  • Either employed in any registered firm or is engaged in agriculture and allied activities. 
  • Are appropriately appraised in the credit ranking agency verification.

Rate of Interest

  • Floating interest rate on the State Bank of India property loan is linked to its base rate, which presently is 9.20%. The current rate of interest is 14.2%. When the bank offers a mortgage loan against this interest rate it applies a 5.0% of premium to its PLR to finally arrive at this rate.
  • The bank determines its rate of interest based upon the market interest. This means that when market interest goes up, the bank also increases its base rate followed by increase in existing rate of all applicable loans. When the market interest rates show a downwards trend, the bank has to reduce its base rate as no bank is allowed to lend any loan below the base rate. Thus, any advantage of lower rates has to be passed on to both new and existing borrowers associated with the bank.
  • The loans which are benchmarked with the base rate provide better and transparent interest rate transmission for the applicants compared to a PLR benchmarked loan.
  • You can refer to banks website while you apply loan against property you can visit the nearest branch to know the bank’s current base rate, repo rate and past trends in the interest rate.
  • 14.2% i.e. 5.00% above the Base Rate (presently base rate is 9.20% w.e.f. 08.06.2015).

List of Documents Required

List of papers / documents applicable to all Resident individual applicants for availing property loan from SBP are:
 

  • Proof of identification: Voter ID Card / Passport / Aadhaar Card / Driving License / PAN card.
  • Proof of residence: Voter ID Card / Ration Card / Aadhaar Card / Electricity Bill / Telephone Bill.
  • Proof business address: in case of non- salaried borrowers
  • Bank Statement of last six months
  • Personal Assets and Liabilities Statements in Bank’s standard format.
  • 2 passport size photographs (including those affixed in loan application)
  • Brief write up of securities charged in respect of other loans availed from our Bank/other Banks/ Housing & Auto Finance Companies /other sources.
  • Additional documents required for salaried persons:

  • Original salary certificate
  • Form 16
  • For professional /self- employed / businessmen

  • Three years I.T. Returns duly acknowledged by I.T Deptt./ I.T. Assessment Orders for computation of income
  • Copies of challans in respect of advance payment of income tax
  • Property documents

  • Sale Deed, Agreement of Sale. Original Share Certificate(s) issued by the society.
  • Land and Building tax paid receipts, possession certificate, and location sketch of property certified by revenue authorities.
  • Letter of allotment from Housing Board /Society/ Private builder.
  • Original receipts regarding advance payments towards purchase of flat.
  • No encumbrance certificate for the last 12/30 years.
  • Original of land tax paid receipt and possession certificate issued by the revenue authorities.
  • Copy of permission from Appropriate Authority and approved building plan (and also key plan / floor plan in case of purchase of flats).
  • Original NOC under ULC Act 1976.
  • Copy of the relative order in case of conversion of agricultural land.
  • Letter from the Builder / Society /Housing Board intimating their account number and name of their bankers, for remittance of instalments.
  • Following are the documents required for NRI/PIO borrowers:
     

  • Completed loan application
  • Passport size photographs (including those affixed in loan application)
  • Passport including page containing visa stamping
  • Copy of valid work permit.
  • Copy of employment contract ( and English translation duly attested by employer /consulate / embassy /our foreign office if it is in any other language )
  • Latest salary certificate in original or proof of income in case of self employed /professionals.
  • Copy of identity card issued by the employer.
  • Proof of residence (driving license / utility bills etc.)
  • Copy of continuous Discharge Certificate in respect of applicants employed in merchant navy.
  • Brief write up on employment profile for the last 10 years.
  • Brief write up on the company / institution where employed i.e. its constitution, activity.
  • Employee base sale / net profit (approx) etc.
  • Statement of overseas bank account for the last six months which reflect credit of salary, savings etc.
  • Power of Attorney, if applicable, duly stamped and notarized / attested by Indian Embassy / Consulate.
     
  • For guarantor (wherever applicable):
     
  • Personal Assets and Liability Statement
  • 2 passport size photographs
  • Proof of identifications as above
  • Proof of residence as above
  • Proof business address as above.
  • Signature identification from his / her present bankers.

Important things to consider before applying for this loan

  • The property against which you are planning to take loan must not be a vacant land and should have an authorized map plan that falls within the municipal area. The bank will ask for the entire chain of documents of the property including its approved building plan when you submit the loan application. So, do ensure you have all the documents ready and can the same with the application.
  • Your exiting EMIs on all loans and credit cards from State Bank of Patiala and any other bank must not be exceeding 60% to 70% of your net monthly income. This is because you should be able to fend for yourself and your family after you have repaid your EMIs.
  • All your credit card dues with State Bank of Patiala should be clear and you should not have defaulted on loans from the bank. SBP can crosscheck all your past records of EMI defaults and dues with other banks as well, so it makes sense to have all your financials in order when you apply for the loan.
  • If you belong to salaried category, then attach your recent salary slips, bank statement of last 3 years along with loan application form.
  • If you are self-employed, i.e., if you are running your own business, then your business must have been in existence for at least three years. Apart from this, bank will also demand your last three income tax return statements and audited financials.

Understand the EMI

Consumer has to repay the loan in the form of EMIs or 'Equated Monthly Instalment' until the loan amount is fully paid off. The EMI is calculated based on the loan amount, tenure and interest rate offered. The interest rate is calculated on reducing balance methodology, hence the interest component of the EMI would be larger during the initial months and gradually reduce with each payment. The proportion of interest amount would gradually go down and the principal amount would go up. After the loan gets sanctioned, customer are provided with the indicative chart which is called as Amortization Schedule which reflects the proportion of Interest amount and principal amount in each month EMI.


Let us illustrate the same with an example:


Mr. Sanjay Sharma is a salaried person working with a Multinational Company. Mr. Sharma is in urgent need of financial assistance. Mr. Sharma owns a house for which the current market value is estimated approx 20 lakhs. Mr. Sharma hence approached State Bank of Patiala for loan against property. Basis his salary and other financial commitment, he has been sanctioned a personal loan of INR 5 lakhs. The interest rate is 15 % and tenure is 48 months. The calculation shall be as:
 

  • EMI : 13,915
  • Total Interest Payable: 1,67,938
  • Total Payment (Principal + Interest) : 6,67,938

Other Important Terms & Conditions

  • State Bank of Patiala holds the rights to alter any charges or fees from time to time or to introduce any new charges or fees, as it may deem appropriate, with due intimation to customer.
  • Fees and Charges are subject to change from time to time at the sole discretion of State Bank of Patiala.
  • State Bank of Patiala is authorized to disclose from time to time any information relating to the loan to any credit bureau (existing or future) approved by Government of India and Reserve Bank of India without any notice to the borrower. State Bank of Patiala is also authorized to make inquiries with the Credit Information Bureau of India (CIBIL) and get the applicants Credit Information Report.
  • For any delay/default in payment of EMI by due date, State Bank of Patiala has the sole right to intimate customer through various modes such as post, fax, telephone, email, SMS messaging and / or through third parties appointed for collection purpose to remind, follow-up and collect dues. Any third party so appointed, shall adhere to the Indian Bank Association’s (IBA) code of conduct on debt collection.
  • The Bank reserves the right to collect any tax if levied by the State/Central Government and /or other Authorities in respect of this transaction

EMI Calculator

The applicant prior submitting can check and plan their loan application amount with the help of this calculator. The online loan against property EMI calculator allows applicants to plan their financial expenditure well in advance and can choose the loan amount with the repayment tenure accordingly. EMI calculator empowers customer to have their financial planning intact post availing the loan.


Applicants may check their EMIs from Paisabazaar website in simple and easy steps:
 

  • Log on paisabazaar.com
  • Scroll to the bottom tab bar
  • Select the EMI calculator option
  • Enter the loan amount, rate of interest, and the loan tenure
  • The website will show you the exact EMI result

How to apply for loan from State Bank of Patiala online

  • Log in to: < www.paisabazaar.com> < Select Loan against property > 
  • The page would redirect to a form
  • Enter your personal details and loan requirements
  • Select State Bank of Patiala loan against property scheme from the list of loan schemes
  • Submit the scanned copies of your loan scheme and click ‘Apply’