Indian Bank was established in 1907. Since inception Indian Bank has slowly ventured into different domains of banking. Today it enjoys a pan India presence with nearly 3,000 branches and 10,000 touch points. The bank reported a total business of over 4 lakh crore with a net profit of more than 300 crore. To meet the different and diverse requirements of the customers, Indian Bank offers a vast range of banking products and services. Its Loan Against Property allows customers to avail funds against residential and commercial properties and use the proceeds for unexplained purpose. The loan amount, however, cannot be used for speculation purpose. Indian Bank's Loan Against Property is a quick and hassle-free scheme. The process involves minimum paperwork. It is very lucrative in terms of rate of interest and processing charges.
Indian Bank offers Loan Against Property under the category of Ind Mortgage.
The features and details of the scheme are as under:
Purpose of loan | Repairs or renovation of building, education, marriage, festivals/functions celebrations, medical or any other purpose which is not speculative in nature. |
Loan amount |
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Loan margin |
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Security |
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Interest rate (as applicable from 1.11.2019) | Starting at 11.80% p.a. |
Processing fee | 1.18% of the amount of loan sanctioned + applicable GST |
Loan Term | Up to 84 months (7 years) |
Many banks and non-banking financial companies offer Loan Against Property. However, it's the benefits and features offered by different lenders that make viable and attractive proposition. Indian Bank too offers Loan Against Property that is loaded with benefits.
The advantages of applying for Indian Bank Loan Against Property are:
Indian Bank has a well-structured department dealing with Loan Against Property applications. The applicant, however, must fulfill the eligibility criteria as stated below:
To apply for the Indian Bank Loan Against Property, the applicant must submit a duly filled application form. The application form must be supported by requisite documents.
The list of the same is described below:
For Salaried employees:
Proof of identity |
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Proof of residence |
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Proof of income |
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Property ownership documents |
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Proof of banking record | In case of existing & ongoing loans, 6 months' bank account statement |
For Self-Employed:
Proof of identity |
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Proof of business address |
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Proof of income |
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Property ownership documents |
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Proof of banking record | In case of existing & ongoing loans, 6 months' bank account statement |
Submitting your loan application with the requisite documents is the first important step in availing a Loan Against Property. Equally important is the assessment of repayment capacity. The borrower's dream can vanish in thin air if the EMI amount is inappropriately calculated. MyMoneyMantra offers a valuable tool, i.e., EMI Calculator, to enable the borrower to assess the right EMI amount. The tool is a boon for lenders as well as borrowers. When used prudently, it creates a long-lasting win-win situation wherein the borrower uses the loan amount for the purpose it was taken and the lending institution adds a valuable customer in its books.
As the EMI amount is a long term expense and is to be paid for the tenure of the loan, it is important that it should be prudently calculated. It should neither be too high as it can lead to financial stress nor should be too low as it will make the loan every expensive.
The table below indicates the value of EMI against different principal amount and loan tenures. The rate of interest remains unchanged at 11.80% p.a., the lowest rate of interest charged by Indian Bank for approving Loan Against Property. The lowest EMI of Loan Against Property taken from Indian Bank is 1,755 per lakh for 7 year tenure.
Principal Loan Amount | EMI Against Different Loan Tenures | ||
5 Years | 6 Years | 7 Years | |
25,00,000 | 55,359 | 48,616 | 43,865 |
50,00,000 | 1,10,718 | 97,232 | 87,730 |
100,00,000 | 2,21,435 | 1,94,463 | 1,75,460 |
The above table highlights the EMI payable for different principal amounts and repayment tenures for Loan Against Property from Indian Bank. As the loan term increases, the EMI value drops significantly. But ironically, a lower EMI means a more expensive loan. An amortization schedule is thus helpful when taking a Loan Against Property. The EMI constitutes of two parts - principle and interest. Although the EMI amount remains the same for the entire loan period, the ratio or break-up between the two components changes every month. The amortization schedule makes the borrower aware of the month-wise breakup of every EMI and also helps understand the portion of reducing the balance of each component.
The below table shows the Principal to Interest break-up of EMI for a Loan Against Property of 1 lakh calculated at an interest rate of 11.80% p.a.
5 Years | 6 Years | 7 Years | |
EMI | 2,214 | 1,945 | 1,755 |
Total Interest Payable
| 32,861 | 40,014 | 47,386 |
Total Payment
| 1,32,861 | 1,40,014 | 1,47,386 |
Principal to Interest Break-up | 75.3 : 24.7 | 71.4 : 28.6 | 67.8 : 32.2 |
It is evident from the above table that an increase in the loan period reduces the amount of EMI for Loan Against Property. But the portion of interest component on the loan increases. This makes the Loan Against Property an expensive proposition, especially over longer period of time. For example, if a borrower avails a Loan Against Property of 1 Lakh, the repayment will amount to 1,47,386 in 7 years as against 1,32,861 in 5 years. The principal amount and rate of interest remain the same.The principal-interest ratio also keeps moving towards the interest part as the loan tenure increases.
It is, therefore, important to closely consider loan tenure and carefully evaluate loan EMI amount before applying for a Loan Against Property.
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Up to Rs. 5 Crore loan against property can be availed by Salaried and self-employed applicants online as well as offline. The LAP can be used for applied for business expansion, long term working capital, debt consolidation, equipment purchase, medical exigency, education/ marriage of children, holiday and much more. Higher loan amounts are available for select customers.
Typically, lenders restrict the maximum Loan Against Property to 75% of the market value of the property. The lending institutions consider the repayment capacity of the borrower while determining the Loan Against Property amount. The repayment capacity depends on, among other aspects, age, income, savings, assets and liabilities, stability of occupation, and expected future cash flows. It is in the best interest of the borrower and the lender that the former should be able to comfortably repay the loan amount.
Indian Bank issues a maximum of 40% of the realizable value of the property in case of property located in Tier I and II cities and a maximum of 50% of the realizable value of the property in case located in other cities.
Furthermore, Indian Bank allows a maximum of 4 times Annual Cash Profit as Loan Against Property for self-employed individuals and a maximum of 48 times the last Gross Monthly Salary drawn in case of salaried employees, subject to a maximum of 2 Crores. The maximum limit is 10 Crores for firms and companies and 1 Crore for pensioners.
Loan Against Property can be availed for different periods depending on the need of the customer. The loan tenure may thus vary. Typically, Loan Against Property tenure ranges from 5 to 15 years. Indian Bank has maximum loan tenure for Loan Against Property fixed at 7 years. Indian Bank allows no holiday period in EMI payments.
The applicant must fill the Loan Against Property form and submit identity and residence proof. In addition to this, the applicant has to submit ITR of last three years, copy of bank statement and repayment details of existing loan(s). These documents enable the lender to assess the financial position of the applicant. The property in question should have a clear title and documents like conveyance deed, allotment letter, sale deed, latest property tax receipt, approved building plan, title deed documents for 30 years, proof of title in Revenue Records, etc., to establish ownership of property must be submitted along with the Loan Against Property application.
Loan Against Property from Indian Bank can be used to fund any personal need like education, marriage, vacation, purchase or construction of another residential or commercial property or family holiday. The loan amount cannot be used for trading or speculative purpose. The borrower is not required to submit an end-use certificate before loan sanctioning.
Indian Bank charges a floating rate of interest starting at 11.80% for sanctioning Loan Against Property.
Indian Bank charges a processing fee of 1.18% of the loan amount + applicable GST to process a Loan Against Property application. The processing fee is non-refundable.
To apply for an Indian Bank Loan Against Property, the applicant must be at least 18 years of age and must have a clear title of the property registered against his name. The maximum exit age for a salaried employee is 60 years, whereas it is 70 years for self-employed professionals and non-professionals.
Yes, NRI individuals are eligible to apply for a Loan Against Property from Indian Bank. However, the property to be set as collateral must be located in India and they should submit an end-use certificate that the funds must be used for bankable purpose as permitted by the RBI.
Yes, all Central and State Government pensioners, family pensioners and re-employed pensioners can apply for a Loan Against Property from Indian Bank provided they are drawing their pension through the Indian Bank.
Property mortgaged or set as collateral with the bank must be insured against fire, flood, earthquake or other risks for the entire period of the tenure of the Loan Against Property. The insurance is liable to pay for the insurance cost and other related charges.