A loan against property as the name suggests is a loan which is availed by mortgaging your property. It is said to be the most secured and cheapest loan as compared to other personal credit schemes such as personal loans, car loans, etc.
Syndicate Bank, one of the oldest and leading commercial banks of India, offers loan against property in addition to range of banking products and services. Founded by Upendra Pai and Vaman Kudva, the bank was known by the name of Canara Industrial and Banking Syndicate Limited at the time of its establishment in 1925. The bank along with thirteen other major banks was nationalised on July 19, 1969 by the Government of India. The bank has over the years gained a nationwide presence and is currently headquartered in Manipal, Karnataka. The bank is well equipped to meet the challenges of 21st century in the areas of knowledge, competition, information and technologies.
Syndicate Bank offers various types of loan products to its customers and the Loan Against Property is one of the many loans offered by the bank against the mortgage of any residential or commercial property owned by individuals. Let us understand the important features of this loan from Syndicate Bank in detail for better clarity.
The loan against property scheme offered by the bank comes under the name of Synd Mortgage and enables owners of properties to avail fund by using their property as collateral. Here are the loan’s features:
- The property loan from Syndicate Bank should be used for any sort of need of both business and personal nature. The loan, however, cannot be used for speculative purposes, like gambling, or for any other prohibited purposes.
- The loan against property can be taken as an overdraft or as a term loan
- The Syndicate Bank property loan is given to those individuals who own any residential or commercial property in their own name and also have a regular and steady source of income to their name.
- Both salaried employees earning a salary or non-salaried individuals can avail of the Synd Mortgage Loan.
- If the individual taking the loan is a salaried employee, the loan granted to him would be in terms of his net annual income and for non-salaried individuals, the loan granted would be in terms of gross annual income. The amount would be equivalent to 10 times the net annual income or gross annual income as the case may be.
- If the loan from Syndicate Bank is taken for personal financing, the maximum available quantum is Rs. 100 lakh and if taken as a retail credit for business finance, the maximum available quantum is Rs. 500 lakh.
- There is a cutback clause in the loan and it depends on the occupation of the individual. If the borrower is salaried, cutback would be 60% of the gross salary and in case of self-employed, the total of any statutory dues, existing loan deductions with Syndicate Bank or other banks and financial institutions including the Equated Monthly Instalment of the proposed loan against property should not exceed 60% of the gross annual income as per recent ITR.
- For salaried individuals, the repayment would be in equated monthly instalments and the tenure would be limited to 10 years or 120 months. It means that salaried employees should pay back the loan within 120 equated monthly instalments.
- For non-salaried class, the repayment can be done monthly, quarterly, half-yearly or annually depending on the borrower’s occupation and generation of income based on the occupation. The maximum tenure granted here would also be 120 months or 10 years.
- The loan liability and interest rate chargeable on the loan taken compounds monthly and is related to the Base rate. Currently the effective rate of interest is Base Rate + 2.75% per annum.
- A third party guarantee would be required to avail of the property loan from Syndicate Bank. For this purpose, the third party should have adequate net worth to undertake the guarantee as per the bank’s view.
- The Syndicate Bank property loan calls for processing charges which are currently 0.50% of the loan with a minimum of Rs.500.
An individual is eligible for a loan against property from Syndicate Bank if they are:
- An Indian national
- The minimum age should be 21 years
- And maximum should be 55 years
- Are salaried or self employed with regular income
- Earn more than required annual income
Photo identity proof: (any one of the following)
- PAN card
- Voters Id card
- Driving license
Residence Address Proof:
- Ration card
- Utility bills
Residence ownership proof:
- Property documents
- Maintenance bill
- Electricity bill
Income proof: Latest 3 months salary slip and form 16
Job continuity proof: Any one of the following:
- Current employment certificate
- Experience certificate (including your previous job appointment letter and relieving letter or job certificate)
- Current job appointment letter (if it is more than 2 years)
- Bank Statement: Latest one year statement of the bank where your salary is being credited
- Property Documents: Property documents that show when you purchased the house or land needs to be submitted. This includes copy of agreement executed /sales deed
- List of documents and sanction letter given by existing banker (if relevant)
- Advance processing check. This cheque is required to process loan documents for sanctioning the loan
- Investment proof which show if you have any investment in shares, fixed deposits, or fixed assets. This will include the share certificate
- 2 passport size, self attested photographs
To make the accurate calculations of equated monthly instalments on loan against property in Syndicate Bank, the bank has designed this specific tool known as loan against property EMI calculator. EMI on property loan is a fixed amount of money which you pay to Syndicate Bank for repayment of your property loan on a monthly basis. This is usually paid on a fixed day of the month until your loan is fully paid back. With the Syndicate Bank offering loan tenure of up to 18 years at attractive rate of interest of 12.2%, it is likely that your EMI on property loan would be as low as Rs. 1,446 per Rs. 1 lakh of loan amount. The loan against property EMI consists of both interest payments and principal repayment. While EMI amount remains constant, the interest component keeps reducing and the principal component keeps changing, except in case of an increase in the interest rate on loan against property. EMI is calculated on the basis of reducing balance and assuming payments of EMI in arrears (that is interest charged for the month preceding the date of EMI date and payment) and not in advance.
- Generally, the mortgage loan EMI remains the same if the customer himself / herself does not request for any change. Such change is also to be approved by Syndicate Bank and is subject to its various eligibility conditions (It is noteworthy that some additional charges may be incurred at the time a customer-initiated change in EMI is effected).
- If you have opted for a floating rate interest on your loan and the floating rate increases, the bank will generally keep the EMI on loan against property constant, but will increase the tenure of loan. So, in this case your EMI payment values will remain constant but the payment will have to be continued for a longer period. In case the interest rate increases to an extent that the revised loan tenure is more than the maximum limit permissible by Syndicate Bank, then the bank will increase your equated monthly instalments.
- Prepayment of loan amount may cause minimal variations in the EMI you need to pay monthly. When making a prepayment, the principal amount outstanding on the property loan is reduced. You have the choice to either keep the EMI amount the same so that the loan tenure (allowing you to pay off the loan faster).
- Another important point to remember is that bank may levy prepayment charges except on floating rate on property loans sanctioned to individuals.
Property loan from Syndicate Bank can be sought by applicants by visiting the nearest bank branch and taking the help of the bank’s executive appointed for assisting in loan application and processing procedure. The application form would have to be filled and the required documents would have to be submitted to apply for loan against property from Syndicate Bank and the same would be directed by the bank’s executive present at every branch. Alternately you can log on to Paisabazaar.com and input your details in order to compare all applicable loan against property options. Subsequently, you can log choose the one that suits your requirement the best and submit your application electronically from the comfort of your home or office.