SBI Loan against property interest rate range from 9.80% p.a to 10.20% p.a, basis your net monthly income and loan to property value. To get the best SBI LAP interest rate, you should have a good credit score and a required loan against property documents. Use online LAP calculator to check eligible interest rate quotes for SBI loans against property.
SBI, India's premier bank, offers the maximum range of products to its customers. It has a variety of loan products to complement the deposit schemes on offer. As on date, the most popular loan product in SBI has to be the home loan. The Loan Against Property is also one of the fast-moving products in the bank. The advantages of availing a Loan Against Property are many.
The Loan Against Property is a suitable loan product if you need raising funds in an emergency. The loan is available for meeting all kinds of business and personal requirements. The features of SBI Loan Against Property are as follows:
SBI offers three types of loans against property:
SBI Loans Against Property |
The objective of the loan
Features of the loan
The scheme in brief
Security for the loan
Loan to Value (LTV) ratio
Repayment tenure
EMI/NMI ratio
The loan should be adjusted before the borrower turns 70 years of age |
SBI Loans Against Mortgage of Immovable Property |
The objective of the loan
Features of the loan
a) NCR, Mumbai, Chennai, Bengaluru, Pune, Hyderabad, and Ahmedabad - 5 Crores b) At other BPR centres - 2 Crores c) At non-BPR centres - 1 Crore d) Rural areas and semi-urban locations having population up to 1 Lakh - Nil LTV ratio
Income criteria
Non-resident Indians can also apply for this loan even if the property is in the name of first-hand relatives. |
SBI Rent Plus |
The objective of the loan
Features
a) 75% of the realisable value of the property b) Maximum amount as per the scheme c) 75% of the future rental receivables or receivables for the residual lease period
|
SBI refers to its one-year MCLR as the base for determining the individual interest rate on LAP. The one-year MCLR with effect from February 10, 2020, is 9.80%.
The rate of interest structure on Loan Against Property is as follows:
More than 50% of the NMI is from the salary of the borrower | ||
Loan Amount Range | Interest Rate | Effective Rate |
Up to 1 Crore | One-year MCLR + 1.45% | 9.30% |
More than 1 Crore and up to 2 Crores | One-year MCLR + 2.10% | 9.95% |
More than 2 Crores | One-year MCLR + 2.50% | 10.35% |
More than 50% of the Net Monthly Income is from business or profession or rental income | ||
Loan Amount Range | Interest Rate | Effective Rate |
Up to 1 Crore | One-year MCLR + 2.10% | 9.95% |
More than 1 Crore and up to 2 Crores | One-year MCLR + 2.60% | 10.45% |
More than 2 Crores | One-year MCLR + 3.00% | 10.85% |
As the rate of interest depends on the one-year MCLR, the reset will be at a frequency of one year. The date of reset will be at the end of one year from the date of disbursement.
SBI refers to the MCLR concept for determining the interest rate structure for a Loan Against Property. The housing loans are linked to the RLLR (Repo-Linked Lending Rate) concept. Both these rates are floating rates. SBI does not offer any fixed-rate product on its home loans or loans against property.
The differences between the RLLR and MCLR concept are as follows:
Also Check: SBI Free Cibil Score
The ideal mode of repayment of the SBI Loan Against Property is the EMI. The EMI starts from the month following the disbursement of the loan:
Additional Reading: How to get loan for low cibil score?
Apply for instant home loan online at Interest Rate starting from as low as 8.50% p.a. Pay EMI of just Rs. 762 per Lakh. Loan can be repaid in flexible tenure of up to 30 years. Apply now with minimal documentation. Check eligibility & get instant approval here.
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Personal loans are clean loans without any security. Hence, the risk factor is high. Loans against property are secured loans. SBI has the backing of collateral in the form of equitable mortgage of the house. The Loan to Value Ratio is also in the range of 60% to 65%. Thus, the bank has adequate security to rely on in the case of a default. Therefore, risk perception is less. It reflects the rate of interest accordingly.
Home loans are priority sector finances. SBI offers home loans for the creation of an asset, and hence, there is a productive use of the loan amount. Loans against property are against the security of an asset. There is no asset creation because of the Loan Against Property. The purpose of the Loan Against Property is for meeting personal and business emergencies. Therefore, the rate of interest on home loans is less when compared to the Loan Against Property.
SBI offers Loan Against Property to enable the borrower to meet personal or business emergencies.
Personal expenses can include medical expenses, marriage, education, and any other purposeful activity. The borrower undertakes not to engage in speculative activity with the use of a Loan Against Property.
Business expenses include expansion of business, meet day-to-day requirements of working capital, purchase long-term assets, and so on.
The salaried person has a fixed recurring income. The source of income is a stable one. On the other hand, a self-employed person could have a higher income as compared to a salaried person. However, profit is not a regular one. There can be wide fluctuations in the monthly income. Therefore, SBI considers a self-employed person as a riskier proposition when compared to a salaried individual. It explains the difference in the interest rate structure.
The following factors play a critical role in deciding the applicable interest rate on Loan Against Property.
SBI considers all types of income when deciding the eligibility for a Loan Against Property.
The distinction is because of the stability of the income source. The more stable the source of income, the less is the risk.
It depends on the loan tenure you agree with the bank. The bank cannot go beyond 15 years for the repayment of a Loan Against Property. If you decide for 15-year repayment tenure, any upward revision in the interest rate will cause the EMI to increase. However, if your loan tenure is less than 15 years, the bank can keep the EMI constant and increase the mandate accordingly.
SBI has a specific EMI/NMI concept where the EMI on Loan Against Property cannot go beyond a specific proportion of the net monthly income. Accordingly, the bank has to fix the tenure or adjust the loan amount.
Yes, you can offer the same property subject to satisfying the LTV ratio of both the loans put together. This example can help you to understand better.
If you satisfy the income criteria for a home loan and Loan Against Property, the maximum credit you can get will be calculated as follows.
You have to create a new equitable mortgage to cover the Loan Against Property. The registration of the MOD depends on the state where you reside and the total loan exposure. If you have already registered the mortgage for an amount more than 54 Lakhs, you do not have to register it again. Otherwise, you have to do so.