The State Bank of India provides a range of banking /financial services and products, out of which a loan against property (LAP), is one of the most sought-after. A loan against property SBI fulfils the cash requirement for personal and business purposes. Many businesspersons choose a property loan to fund their business requirements, because of large amount of loan available, up to Rs. 5 crore to Rs. 7.5 crore and low interest rates, beginning at 10.30% onwards.
The property to be mortgaged must be under the ownership of the borrower. It can be a commercial, industrial, or a residential property. LAP is an all-purpose loan and can take care of any kind of company expenses, other than those speculative in nature. You have to repay the bank in EMI (Equated Monthly Instalments) at a rate of interest pre-decided by the bank. For higher loan amounts, the starting rate can be over 11%.
As an applicant, you must submit income documents, property documents, address proof, identity proof, income tax return proof, business registration copy, licences, and other necessary financial statements to the bank to avail this loan.
Below given are some of the features of SBI loan against property for business purpose.
- Loan Amount and Other Charges
The general LAP amount is between Rs. 25,000 and Rs. 1 core. Some applicants can be eligible for an amount of up to Rs. 2 crores. There are other variant property loan products, wherein the loan amount starts at Rs. 25 lakhs and is up to Rs. 5 crores or 7.5 crores. Loan to value ratio is up to 60-65%. Process fee can be up to 1% of the total loan amount.
- Eligibility Criteria
You must be under 70 years of age, up to the loan’s maturity. If you are a self-employed person, then the minimum turnover for a year must be Rs. 3 lakhs. If you are a salaried person, who wishes to establish a start-up, net monthly income must be at least Rs. 25,000.
- Repayment Tenure
The tenure of the loan is between 5 years and 15 years. You can repay within 120 EMIs. There is no prepayment charges applied.
- Credit Score
Credit score of a person is one of the important factors, which influences the loan amount and interest rate. Even though a property loan is secured in nature, you must have a minimum credit score of 650+. SBI will check your credit history to understand the debt to income ratio.
- SBI Rent Plus Scheme
The Rent Plus loan scheme by State Bank of India, is ideal for businesspersons. Here, you must be the owner of a commercial complex or an apartment building. The property must generate rental income, because the loan will be provided against the rental income. Maximum loan one can avail is Rs. 7.5 crores, if the property is based in any of the metro cities. If the property is based in any other city than a metro, then the maximum loan amount is up to Rs. 5 crores.
- Minimum amount one can borrow is Rs. 25,000.
- The loan margin will be 25% of the loan amount.
- The property must be complaint of SARFAESI rules.
- This property must not be leased to social infrastructure institutions such as nursing homes, hospitals, schools, orphanages etc.
If you wish to apply for a property loan with SBI for business purpose, the above-given details will help understand the loan scheme, eligibility criteria, and essentials. You can either apply for the loan on the official website of the State Bank, or simply visit the nearest bank-branch to access the loan application form.