PNB housing finance LAP interest rate starts at 8.90 % for up to 15 years. Apply for PNB Loan against property online for quick approval & disbursal. You can avail doorstep delivery of PNB LAP up to 65% of property value for a range of personal & business needs pledging a residential or commercial property.
PNB Housing is a subsidiary of one of the largest nationalised banks in India, Punjab National Bank. Having commenced its activities on November 11, 1988, PNB Housing offers a range of exciting products like loan against property, fixed deposits, home loans, and so on.
Though known for its housing loans, the company offers a variety of non-home loans, as well. They include the following facilities:
|Loan Product||Ideal for||Maximum Loan||Interest Rate||Maximum tenure|
|Commercial Property Loan||Purchasing commercial properties like shops||70% of the price of the property||10.25% to 10.75%||15 years|
|Loan Against Property||Meet individual and business needs||60% of the property value||10.25% to 11.75%||20 years|
|Lease Rental Discounting||Loan against rent receivables||80% of the future rent receivable||10.25% to 10.75%||120 months|
|Loans for Real Estate Developers||Finance to real estate developers for constructing apartment complexes||Need-based||NA||To be liquidated on the purchase of the flats|
PNB Housing offers floating rates of interest that are linked to its benchmark rate, PNBHFR. The rates change whenever the company varies the benchmark rate.
The individual rates of interest on the Loan Against Property depend on the following factors:
PNB Housing does not offer loans against the property on a fixed-rate of interest basis.
|Loan Against Property||Rate of Interest|
|Loans Against Commercial Property||10.50% to 11.00%|
|Loans Against Residential Property||10.25% to 10.75%|
|Loan Against Plot - Residential or Commercial||11.25% to 11.75%|
Points to Note
PNB Housing offers Loan Against Property in the form of a term loan with a repayment tenure extending up to 20 years. The ideal mode of repayment for such a loan is the EMI.
The EMI is a constant quantity for a given loan amount, rate of interest, and tenure. The EMI has two components, the principal repayment, and an interest repayment component. As the EMI remains constant, the value of the interest and principal repayment component changes every month. In the initial stages, the interest component is more. As you go deep into the tenure, the interest component keeps reducing with a corresponding increase in the principal repayment component.
PNB Housing offers the floating rate of interest on its Loan Against Property. The floating rate of interest has its positive aspects when compared to the fixed-rate structure.
The Loan Against Property is similar to a housing loan in many respects:
There are specific distinctions as well between the two products:
As the end-use of the funds is not established, the banks and NBFCs consider the Loan Against Property as riskier when compared to a home loan. Therefore:
The Loan Against Property is more like a personal loan but with collateral. Therefore, the rate of interest on the Loan Against Property is less when compared to a personal loan.
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.
PNB Housing is an NBFC. Hence, it does not follow the repo rate or the MCLR that commercial banks do when determining their interest rate on retail loans. PNB Housing refers to its Prime Lending Rate for Non-Housing purposes, PNBHFR. This rate is linked to market forces that determine its rise of fall at frequent intervals. Various other aspects also go towards determining this lending rate.
The individual rate of interest on loans against property depends on the following factors:
The beneficial option is always to increase the EMI whenever the rate of interest goes up. The EMI comprises of an interest repayment component and principal repayment component. As the interest rate goes up, the interest repayment component also increases. Therefore, the principal repayment portion will decrease if you keep the EMI constant. It will cause a cascading effect on the interest calculation for the following months. Therefore, it is better to increase the principal repayment component, as well, thereby increasing the EMI.
PNB Housing has two options before it. One is to increase the EMI depending on the rise in the interest rate. It entails keeping the repayment tenures as constant. The alternative is to keep the EMI constant, thereby increasing the mandate. In the initial stages of the loan, PNB Housing prefers to keep the EMI constant. However, they cannot increase the tenure beyond a specific level. Therefore, increasing the EMI remains the only option.
The ideal way to repay a PNB Housing Loan Against Property is the EMI mode. The borrower can either submit post-dated cheques or register for an ECS mandate for paying the EMIs.
Yes, RBI has made it mandatory for all financial institutions to inform their customers about the changes in the loan terms and conditions. The difference in the interest rate can cause the EMI to vary. Therefore, the borrower should be aware of the variations. PNB Housing can use various methods to inform the borrowers. It can be through email, SMS, or by way of a simple letter.
Yes, PNB Housing offers the facility of the EMI calculator that helps to calculate the EMI in advance. It helps the borrower to understand the financial liability and also maintains his/her to ascertain the affordability, as well.
NB Housing calculates interest on the monthly reducing method. This method works out in the following way. This example will help you understand the concept.
The interest for November is calculated on the outstanding balance as of the last day of October. Similarly, the outstanding balance on the last day of November is the base for calculating the interest for December.
In a way, it does not benefit the borrower. This calculation envisages that it does not calculate the interest benefit for the instalment you deposit during the month. In the regular course, the EMI is payable by the 10th of the month. Therefore, the borrower loses out on the interest benefit on the EMI amount for an average of 20 days every month. Over the entire loan tenure, it can snowball into a substantial figure.
Yes, commercial banks calculate interest on daily reducing balances. This method offers the highest benefit to the borrowers. It is a more transparent mode of calculating interest.