SBI Loan Against Property Eligibility Criteria

SBI loan against property eligibility criteria comprise borrower’s income, age, repayment capacity and property value. By adding a co-borrower you can enhance loan against property eligibility for SBI. The minimum income requirement is Rs 25000 and the maximum age could be up to 70 years. You can use SBI LAP Calculator to know about effective interest rate and loan amount.  

About SBI Loan Against Property

If ever there is an all-purpose loan in the banking industry, it is the SBI Loan Against Property. This loan caters to a variety of purposes ranging from individual to business requirements.

The individual needs can be any legitimate purpose except for speculative reasons. The requirements can include:

  • Medical emergencies for you and your family members
  • Education expenses of self, spouse, or children
  • Marriage expenses in the family
  • Home renovations and refurbishments
  • Purchase property
  • Closing existing credit card or other personal liabilities

Besides, the Loan Against Property is also available for satisfying business needs such as:

  • Meeting working capital requirements
  • Purchasing business assets for expansion of the business activity
  • Liquidate other business debts

The most significant benefit of the SBI Loan Against Property is that the bank does not seek the reason for the end-use of funds. A simple declaration form, along with the application form, is enough.

SBI Loan Against Property Features and Benefits

  • Loans are available for almost any purpose except for speculative uses
  • SBI Loan Against Property is available against residential and commercial properties
  • SBI considers the rental income received from such properties for determining the loan eligibility.
  • SBI has the most extensive banking network in India
  • Interest rates are one of the lowest in SBI in India today
  • The bank calculates interest on a daily reducing basis, thereby ensuring the highest benefit for the borrower.
  • SBI has a transparent pricing system
  • There are no prepayment penalties for individual borrowers
  • Both residents and non-resident Indian individuals can apply for the SBI Loan Against Property
  • Salaried and self-employed persons are eligible for this loan facility

SBI Loan Against Property - The Scheme in Brief

  • Loan against mortgage of residential or commercial property
  • Meet all kinds of personal and business needs
  • SBI offers three types of loans against property:
  1. Loan Against Property
  2. Loans against mortgage of immovable property
  3. SBI Rent Plus

Details of SBI Loan Against Property

SBI Loan Against Property

The objective of the loan

  • A personal loan against mortgage of residential or commercial property

Loan quantum

  • Minimum - 10 Lakhs
  • Maximum - 7.50 Crores depending on the location of the property

Rates of interest

  • 9.30% to 10.85%

Security

  • Equitable mortgage of property

Loan to Value (LTV) ratio

  • Loans up to 1 Crore - 65%
  • Loans above 1 Crore - 60%

Loan tenure

  • Minimum - 5 years
  • Maximum - 15 years

Processing fee

  • 1% of the loan amount with a maximum of 50,000
SBI Loan Against Mortgage of Immoveable Property

The objective of the loan

  • Meet business and personal requirements

Loan quantum

  • Minimum amount - 10 Lakhs
  • Maximum amount - 5 Crores

Rate of interest

  • Same as that of SBI Loan Against Property

Security

  • Equitable mortgage of property

LTV ratio

  • Up to 1 Crore - 65%
  • Above 1 Crore - 60%

Loan tenure

  • Minimum - 5 years
  • Maximum - 180 months
SBI Rent Plus

The objective of the loan

  • Loan against rent receivables to meet business and family requirements

Quantum of the loan

Minimum - 50,000

  • Maximum - 7.50 Crores in metro cities and 5 Crores in non-metros

Rate of interest

  • Same as that of Loan Against Property

Security

  • Equitable mortgage of the property
  • Assignment of rent receivables

LTV ratio

  • Maximum 75% of the value of the property

Loan tenure

  • 10 years

Processing fee

  • 2.02% of the loan amount with a maximum of 1,01,865 to be paid upfront

SBI Loan Against Property - Eligibility Criteria

SBI Loan Against Property is different from the other loans on offer. It has a set of unique eligibility criteria.

SBI Loan Against Property - Eligibility

General Eligibility Criteria

  • Resident individuals who are salaried persons, self-employed, income tax assesses, and NRIs, are eligible for a Loan Against Property.
  • NRIs should have a property in India either in their names or in the names of their close relatives such as parents, spouse, children, or siblings.
  • The minimum net salary for a salaried employee should be 25,000 per month
  • In the case of self-employed individuals or professionals, the minimum net annual income should be 3 Lakhs.
  • The borrower should liquidate the loan against the property before they attain the age of 70 years.

Eligibility Criteria Regarding the Location of Property - Maximum Eligibility Amount

  • Property located in a rural and semi-urban area with a population of less than 1 Lakh - No loan eligibility.
  • Property situated at non-BPR urban centres - 1 Crore
  • Property located at BPR centres - 2 Crores
  • Property located within the municipal corporation areas of Mumbai, NCR, Chennai, Pune, Bangalore, Ahmedabad, and Hyderabad:

a) Loan against mortgage of immovable property - 5 Crores

b) General scheme of Loan Against Property - 7.50 Crores

Eligibility Criteria - Loan to Value Ratio

  • Up to an amount of 1 Crore - 65%
  • More than 1 Crore - 60%

Eligibility Criteria - Rent Plus Scheme

The loan amount will be the lowest of the following individual calculations:

  • 75% of the realisable value of the security
  • Maximum amount permissible under the scheme
  • 75% of the total rent receivable for the residual period of the lease (total amount minus the Advance deposit, property tax, service tax, TDS, and other statutory dues).

Eligibility Criteria - As Per Income

The net annual income plays a crucial role in deciding the eligibility amount.

Net Annual IncomeMaximum Permissible EMI/NMI Ratio
More than 3 Lakhs and <= 5 Lakhs50%
More than 5 Lakhs and <= 10 Lakhs55%
More than 10 Lakhs60%

Eligibility Criteria - Age of the Borrower

The borrower's age should not exceed 70 at the time of the maturity of the Loan Against Property.

SBI Loan Against Property - Calculation of Eligibility Amount

The estimation of the overall eligibility amount for a Loan Against Property depends on various factors:

  • Value of security: The LTV ratio plays a critical role in determining the overall eligibility. Generally, SBI offers 60% to 65% of the value of the security as a loan depending on the loan amount. In the case of SBI Rent Plus, the LTV ratio can go up to 75% of the loan amount.
  • The location of the property: Loans against properties in rural and semi-urban locations have a lower ceiling when compared to properties located in urban and metro areas.
  • The income of the borrower: The minimum net income should be 25,000 per month after the deduction of all instalments. In the case of self-employed borrowers, the minimum income should be 3 Lakhs per annum.
  • The repaying capacity of the borrower: The EMI/NMI ratio is a crucial one. SBI ensures that the borrower should have sufficient funds to cater to the monthly necessities. Therefore the minimum EMI/NMI ratio is 50%.

SBI Loan Against Property - An Example of Eligibility Calculation under Each Loan Product

Loan Against Property

We shall consider a general model of calculating the eligibility for a Loan Against Property.

The following assumptions should provide us with the necessary background:

  • Property located in a metro area
  • Valuation report of the property indicates the value to be 3 Crores
  • The net income of the borrower is from business purposes, and it is 12 Lakhs per annum
  • The borrower has applied for a facility of 1 Crore
  • The age of the borrower is 50 years
  • The rate of interest is 9.95%

Calculation of eligibility - The least of the following

A = 60% of the value of the property - 1.80 Crores                    

B = 5 times the annual income of the applicant - 60 Lakhs

C = Amount Applied - 1 Crore

D = Net monthly income is 1 Lakh. Hence, the maximum EMI can be 60,000 (60% of NMI). EMI per lakh comes to 1,072. Therefore for an EMI of 60,000, the maximum amount of loan can be 55.97 Lakhs.

Thus, the total eligibility of the borrower works out to 55.97 Lakhs @9.95% for tenure of 15 years with an EMI of 59,975.

Loan Against Mortgage of Immovable Property

We shall now consider the case of a salaried person.

The following assumptions are necessary:

  • Property located in other BPR centres
  • Valuation of the property is 3 Crores
  • The net salary of the applicant after all deductions is 80,000 per month
  • The borrower applies for a loan of 1 Crore
  • The age of the borrower is 56 years. Hence, the tenure can be a maximum of 14 years
  • The rate of interest applicable on loan is 9.30%

Calculation of Eligibility - The least of the following:

A = 60% of the value of the property - 1.80 Crores

B = 5 times the annual income of the applicant - 48 Lakhs

C = Amount applied - 1 Crore

D = Net monthly income is 80,000. The maximum extent up to which we can stretch the EMI is 44,000 (55% of NMI). At the present rate of interest, the EMI works out to 1,067 per lakh. Therefore, the maximum eligibility is 41.23 Lakhs.

The total eligibility is 41.23 Lakhs @ 9.30% for 14 years with an EMI of 43,974.

SBI Rent Plus

This calculation is under the SBI Rent Plus scheme

Here are some assumptions:

  • Property located in Mumbai
  • Value of the property is 8 Crores
  • Net monthly income of the applicant from salary is 75,000
  • The rental income from the property is 2 Lakh (less TDS and other taxes)
  • The residual lease period is 12 years
  • The borrower applies for a loan for 4 Crores
  • The rate of interest applicable on loan is 10.45%

Calculation of Eligibility - The least of the following:

A = 75% of the realisable value of the property - 6 Crores

B = Maximum permissible under the scheme - 7.50 Crores

C = 75% of the total rent receivable for the residual period (maximum of 10 years) = 75% of 2.40 Crores = 1.80 Crores

D = Income wise, the calculation is as follows:

Total income per month = 2.75 Lakhs

Maximum EMI/NMI ratio = 60% = 1.65 Lakhs

The EMI per lakh works out to 1,347. Therefore, the total loan eligibility for an EMI of 1.65 Lakhs = 1.22 Crores.

The total eligibility works out to 1.22 Crores at 10.85% for 10 years, with an EMI of 1,64,279.

The borrower can enhance the overall eligibility by bringing in an eligible co-applicant.

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SBI Loan Against Property Eligibility Criteria FAQs

Can we borrow as much as we want under the Loan Against Property products?

No, there are specific stipulations regarding the eligibility amount. It depends on the value of the security, the income, and the repayment capacity.

The last-named condition considers the EMI/NMI factor. It is the most crucial one to decide the maximum loan eligibility.

What factors decide the rate of interest applicable to the Loan Against Property?

The rate of interest depends on the following two factors:

  • The loan amount: There are three different amount slabs, up to 1 Crore, up to 2 Crores, and more than 2 Crores.
  • The nature of income: If the salary makes up for more than 50% of the income, the rates are less as compared to a business or rental income.

How does the rate of interest affect the eligibility of the Loan Against Property?

The rate of interest determines the EMI for the loan. The EMI/NMI plays a crucial role in deciding the final eligibility.

Can I bring in a co-applicant to enhance my eligibility?

Yes, an eligible co-applicant with a stable source of income can enhance the overall eligibility of the loan. SBI considers such income while determining the combined eligibility.

Who can be an eligible co-applicant?

Similar to the home loan, all co-owners of the property have to be co-applicants. If any of these applicants have a regular source of income, the bank considers such income for eligibility. Besides, the bank accepts spouse, parents, children (subject to age criteria), and even siblings as co-applicants.

Which is a better option, a Loan Against Property or personal loan?

It depends on the amount you need. If the requirements are less, a personal loan should be the ideal product. However, if your requirements are more, it is beneficial to opt for a Loan Against Property.

What are the documents necessary for a Loan Against Property?

The applicant should provide the following documents when applying for a Loan Against Property.

  • The regular KYC documents (ID proof and residential address proof)
  • Income documents
  • The property documents

What is the security for the Loan Against Property?

The borrower has to create the equitable mortgage of the property as security for the Loan Against Property. Besides, the SBI Rent Plus scheme requires the borrower to assign the rent receivables in the bank's favour.

What undertaking should the borrower give when availing the Loan Against Property?

The borrower should undertake to use the Loan Against Property for non-speculative purposes alone.

What activities qualify as speculative?

Any activity that promises high income from a small investment in a short time is a speculative activity. Some of the examples are:

  • Gambling and participation in races
  • Purchasing shares with the sole intention of making a quick buck
  • Investing in bullion and real estate

The Loan Against Property is not available for speculative activity.