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Indian Bank Loan Against Property Details

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.

Features of Indian Bank Loan Against Property

Indian Bank offers Loan Against Property under the category of Ind Mortgage.

The features and details of the scheme are as under:

Purpose of loanRepairs or renovation of building, education, marriage, festivals/functions celebrations, medical or any other purpose which is not speculative in nature. 
Loan amount
  • Salaried Individual:
    • 36 times of last Gross Monthly Salary drawn in case the repayment period is up to 60 months.
    • 48 times the last Gross Monthly Salary drawn in case the repayment period is above 60 months, subject to a maximum of 2 Crores.
  • Self-Employed/Professional/Business Class/Other Individuals
    • 3 times Annual Cash Profit (Depreciation + PAT) in case the repayment period is up to 60 months.
    • 4 times Annual Cash Profit (Depreciation + PAT) in case the repayment period is above 60 months.
    • Maximum limit for Self-Employed/Professional is 5 Crores and for Firms/Companies is 10 Crores.
  • Pensioners: Up to 1 Crore
  •  Other Individuals:
    • 3 times Annual Income in case the repayment period is up to 60 months.
    • 4 times Annual Income in case the repayment period is above 60 months.
Loan margin
  • For property located in Tier I and II cities - 40% of the Realizable Sale Value
  • Property located in other cities - 50% of the Realizable Sale Value
Security
  • The property against which the loan is set as collateral.
  • Loan Against Property is not allowed against disputed properties.
  • Leased property cannot be set as collateral
Interest rate (as applicable from 1.11.2019)Starting at 11.80% p.a.
Processing fee1.18% of the amount of loan sanctioned + applicable GST
Loan TermUp to 84 months (7 years)

Benefits of Applying for Indian Bank Loan Against Property

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:

  • The loan quantum depends upon applicant profile and cost of the property. It may go up to 10 Crores in some cases.
  • Floating rate of interest is charged for loans approved against property
  • Competitive rate of interest on loan against property starting at 11.80% p.a.
  • Quick and hassle-free loan application system
  • Less paperwork
  • Low processing fee.
  • Nil charges for prepayment and foreclosure
  • Maximum loan tenure of 7 years
  • Transparent working and no hidden charges
  • Flexible repayment option through monthly EMIs.

Eligibility Criteria for Availing Indian Bank Loan Against Property

Indian Bank has a well-structured department dealing with Loan Against Property applications. The applicant, however, must fulfill the eligibility criteria as stated below:

  • All individuals aged above 18 years can apply for the loan
  • The exit age is 60 years for a salaried employee and 70 years for other borrowers
  • Permanent employees working in central/state government, public limited companies, quasi government bodies, reputed private limited companies can apply for the loan if they have a clear record of timely salary payment. They must be in service for a minimum period of 3 years.
  • Employees of Indian Bank, as well as other banks (private/PSU/Co-op/foreign), can also apply.
  • Professionals, self-employed, traders, businessmen (including sole proprietary concern, HUF, firms, limited companies) are also eligible based on their cash flow and income level.
  • All central and state government pensioners, as well as family pensioners, drawing pension through Indian Bank branches, are eligible.
  • NRIs are also eligible, provided the end use of the loan is for a bankable purpose and property is located in India.
  • The property to be set as collateral can be residential or commercial
  • The property must have a clear title and should be registered in the name of the individual applying for the Loan Against Property.
  • Indian Bank Loan Against Property offers a maximum quantum of loan that is linked to the repayment capacity and applicant profile.
  • Property-to-be-mortgaged should be insured with bank at borrower's cost against fire, earthquake, flood, riot, and other risks for the entire loan period.

Documents Required for Indian Bank Loan Against Property

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
  • Passport size photograph of the applicant
  • Passport/ Driving License/ Aadhar Card/PAN Card/ Voter ID
Proof of residence
  • Electricity Bill
  • Telephone Bill
  • Property Tax Receipt
  • Passport
  • Voter's ID
Proof of income
  • Form 16
  • Bank statement
  • Income Tax for last 3 years
  • Latest salary slip
Property ownership documents
  • Allotment letter
  • Sale deed
  • Conveyance deed
  • Approved building plan
  • Latest property tax receipt
  • Proof of title in Revenue Records
  • Title deed documents for 30 year
  • Power of attorney
  • Possession letter
  • Occupancy certificate
  • Copy of the approved plan of construction or extension
Proof of banking recordIn case of existing & ongoing loans, 6 months' bank account statement

For Self-Employed:

Proof of identity
  • Passport size photograph of the applicant
  • Passport/ Driving License/ Aadhar Card/PAN Card/ Voter ID
Proof of business address
  • Electricity Bill
  • Telephone Bill
  • Passport
  • Voter ID
  • Property Tax Receipt
  • GST Registration Number
Proof of income
  • 3 year Wealth Tax Return (if applicable)
  • 3 year Income Tax Statement
  • 3 year Balance sheet and profit and loss account
  • Business incorporation details with address proof
  • Individual and Company's bank account statement
Property ownership documents
  • Allotment letter
  • Sale deed
  • Conveyance deed
  • Approved building plan
  • Latest property tax receipt
  • Proof of title in Revenue Records
  • Title deed documents for 30 year
  • Power of attorney
  • Possession letter
  • Occupancy certificate
  • Copy of the approved
Proof of banking recordIn case of existing & ongoing loans, 6 months' bank account statement

Why Use Loan Against Property EMI Calculator?

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 AmountEMI Against Different Loan Tenures
5 Years6 Years7 Years
25,00,00055,35948,61643,865
50,00,0001,10,71897,23287,730
100,00,0002,21,4351,94,4631,75,460

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 Years6 Years7 Years
EMI2,2141,9451,755

Total Interest Payable

 

32,86140,01447,386

Total Payment
(Principal + Interest)

 

1,32,8611,40,0141,47,386
Principal to Interest Break-up75.3 : 24.771.4 : 28.667.8 : 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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Pre-Approved ICICI Loan Against Property @8.35% p.a 

ICICI bank loan against property up to Rs. 5 Crore can be availed of online as well as offline by salaried and self-employed applicants. The LAP can be 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. 

Indian Bank Loan Against Property FAQs

Is there any restriction on the amount that can be taken under Loan Against Property?

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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.

What is the loan tenure of Loan Against Property offered by the Indian Bank?

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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.

What documents have to be submitted to avail Loan Against Property?

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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.

For what purpose can Loan Against Property from Indian Bank be used?

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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.

What is the rate of interest charged for Loan Against Property by Indian Bank?

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Indian Bank charges a floating rate of interest starting at 11.80% for sanctioning Loan Against Property.

What is the processing fee charged by Indian Bank to approve a Loan Against Property?

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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.

What is the age limit for applying for a Loan Against Property at Indian Bank?

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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.

Are NRIs eligible for a Loan Against Property from Indian Bank?

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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.

Can pensioners apply for a Loan Against Property from Indian Bank?

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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.

Should mortgaged property be insured?

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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.