Federal Bank Loan Against Property
Federal Bank is a leading Indian commercial banking institution in the private sector with more than 1,800 ATMs and 1,250 branches in the country. The bank is one of the pioneers in deploying technology across its operations and was one of the first Indian banks to fully digitize its branches.
Features and Benefits of Loan Against Property from Federal Bank
Federal Bank’s Loan Against Property comes with numerous benefits and features. Some of them are as follows:
- Quick loan approval;
- Lower interest rates and EMIs;
- Low processing fee of 0.50%;
- Longer repayment period up to 120 months;
- No stipulation of financial parameters;
- Flexible repayment options;
- An equitable mortgage of immovable property with a 25% margin will be required as security
- Loan amount up to ₹ 5 crores;
- Property Power is offered against commercial properties, residential premises or a plot of land as per your convenience;
- Minimal paperwork required;
- Overdraft and Term Loan facilities are available;
- A surrogate scheme for self-employed individuals is available;
- Balance Transfer Programs with additional finance.
Federal Bank LAP Overview
Federal Bank offers loans against property for residents and non-resident Indians at competitive interest rates. So, suppose you are an entrepreneur willing to expand your business or somebody who wishes to render a higher education for their children or have a domestic or international vacation. In that case, you can fulfil your dreams with property powers.
You can opt for Federal Bank LAP and get loans of up to ₹ 5 crores, depending on your requirements and profile. Given below are some basic details associated with Federal Bank LAP:
|Interest Rate||10.10% p.a|
|Loan tenure||Up to 15 years|
|Loan amount||Up to Rs 5 Crores|
|Minimum age||24 years|
|Processing fee||1% of the limit sanctioned with a minimum of ₹ 3000/-|
Eligibility Criteria for Obtaining Federal Bank Loan Against Property
Federal Bank has made obtaining a loan against property quite simple with easy eligibility criteria. Therefore, whether you are an Indian Resident or NRI, you must meet the following requirements:
- The applicant can be an Indian citizen, NRI or PIO.
- The age of the borrower must be at least 24.
- For granting Property Power to PIOs (Persons of Indian Origin), the property shall be in their names
- You must be a self-employed professional or a salaried employee working in a reputed private company or government organization.
Federal Bank Loan Against Property Fees and Charges
There are certain fees and charges associated with the loan against property from Federal Bank. So, before you jump into availing of a loan, it is essential to be aware of it.
|Type of Charge||Amount|
|Processing Fees||0.50% (Min ₹3,000 - Max ₹7,500)|
|Part prepayment Charges||Part prepayment can be made only after six months from the date of the first disbursement. One payment is allowed every financial year, and it can be up to 5% of the outstanding loan.|
|Legal, repossession and incidental Charges||As per actual|
|Stamp Duty (Facility documentation & Property) plus Registration||As per actual|
|Creation of charge with ROC||As per actual|
|Insurance Premium||As per actual|
|Facility cancellation charges||Maybe up to ₹2000 + GST + interest charges from disbursement date up to cancellation request.|
|Customer Credit Information Report (Credit Bureau)||Maybe ₹200 per report for individual customers & ₹ 750 per report for non-individual customers|
|NOC Issuance Charges||Up to ₹500 plus GST (Nil for first NOC)|
|EMI cycle change||Up to ₹500 plus GST|
|Collection Charges||₹200/- per visit for the collection of dues from the customer residence/ office|
|Late payment Charges||Up to 3% per month|
|Cheque bounce Charges||Up to ₹500 plus GST|
|Cheque swap Charges||Up to ₹500 plus GST|
Federal Bank LAP Interest Rates
The interest rates of Federal Bank Loan Against Property start from 10.10%. It keeps changing from one applicant to another, based on their creditor’s profile.
Factors Affecting Federal Bank Loan Against Property Interest Rates
Interest rates on loans keep fluctuating depending on the borrowers' profile depending on various factors, including
A credit score measures the creditworthiness of the borrower. It depends on the existing debts and the repayment history of the borrower. It is one of the most crucial factors that affect loans against property interest rates. Usually, lenders prefer a credit score above 750. Borrowers with good credit scores can bag a lower interest rate, while those with bad credit scores may get their loans rejected.
Usually, lenders assess the financial history before finalising the interest rate on a loan. A self-employed individual (such as a Doctor or Chartered Accountant) or a salaried employee with a consistent income at a reputed or renowned organisation can avail a loan at a lower interest rate. Besides, if you have a high income and lower debt-to-income ratio, you can secure LAP against affordable interest rates.
This is another essential factor that affects the interest rate on a loan. Loan tenure helps decide the interest rates financial institutions will charge. As you might know, a loan against property is a long-term loan due to which its interest rates are usually lower. Therefore, if you opt for a shorter loan tenure, you will be charged higher interest rates.
Financial institutions lending loans against property first examine the property's age, location, condition, and current market value before calculating the interest rate on the same. Usually, residential properties fetch lower interest rates than commercial properties. Likewise, if a property is situated in a prime location with all modern facilities, it can attract a lower interest rate than those in less developed areas.
Documents Required for Federal Bank LAP
To obtain a loan against property from Federal Bank, you must first submit the following documents:
- Proof of Identity, including PAN Card, Voters ID Card, Passport, or Driving License
- Address proof such as Passport, Ration card, Sales Tax Certificate, Lease Agreement, Telephone/Electricity Bill, or Trade license
- Bank statement of the last six months
- Proof of continuation, including the Trade License, Sales Tax Certificate, Establishment, or ITR
- Copy of license or NOC (No Objection Certificate) from the local authority or license from the competent authority to run the business
- Sales tax returns or income tax returns of companies/ firms/ proprietor/ partners, wherever applicable
- Projected financial statements
- audited or unaudited financial statements as applicable for the past two years in the case of existing units
- Other documents may be requested as per individual requirements.
For Salaried Individuals
- Salary slips or salary certificate for the last three months
- Bank account statement of the latest six months showing the salary credits
- Copies of IT returns of the last two years or Form No. 16 of the previous 2 years
For Self-Employed Individuals
- Bank account statements for the last 12 months;
- Proof of business profile and business existence;
- IT returns for two years supported by Balance Sheet, P&L Account for the past two years, tax paid challans may also be collected or IT returns from the last two years, supported by the tax calculation sheet & tax paid challans.
Documents Required for NRIs
Document requirements for NRIs (Non-Resident Indians) differ from that of Indian Residents. They are as follows:
- Identity proof – PAN Card, Aadhaar Card, Voters ID Card, Passport, or Driving License
- Address proof – Aadhar Card, Driving License, Voters ID or Passport
- Two passport size photographs of each of the applicant/ and the co-applicant
- Age proof – Birth Certificate, Passport, SSLC or AISSE Certificate, or Driving License
- Any additional documents for non-resident customers (if applicable)
- Certified copy of ID card, Work Permit, Visa, Passport.
- Possession certificate
- Approved Plan
- EC for 13 years *
- Location sketch *
- Land tax receipt
- Documents of title *
- Building tax receipt ( if applicable )
For Salaried Individuals (either option 1 or option 2)Option 1
- NRE account statement with any bank for the last year;
- Embassy / latest three months salary Slip OR Latest Salary Certificate / latest three months salary slips supported by six months Salary Crediting Statement /CRO certified Salary Certificate.
Two years NRE account statement of the customer and/or resident account of spouse/parents (with Federal Bank/ other Bank) in which remittance is made.
For Self-Employed IndividualsOption 1
- Proof of business profile and business existence
- Bank account statements for the last 12 months
- Balance Sheet, Profit and Loss Account for the past two years. Where ever available, Tax paid challans may also be collected
- Two years NRE a/c statement of the customer and/or resident accounts of spouse/parents (with Federal Bank/ other Bank) in which remittance is made.
Federal Bank Loan Against Property EMI Calculator
Urban Money Loan Against EMI calculator is a device that determines the monthly instalments, the total cost of the loan, and interest payable. The online calculator lets you decide on the EMI amount that suits your repayment potential. Moreover, it allows you to plan your finances beforehand. Using the Urban Money calculator is quite easy. All you have to do is to fill up the required fields correctly.
You can also use a mathematical formula to calculate the EMI manually. The formula for calculating monthly EMI is -
EMI = [P*R (1+R) *N] / [(1+R) N-1]
- P= Principal Amount
- R= Interest Rate
- N= Repayment Tenure
How does Federal Bank LAP Compare with Other Lenders?
The below comparison of Federal Bank Loan Against Property with other lenders is based on different interest rates.
|Name of the Lender||Interest Rate (% p.a.)|
|Federal Bank||10.10 onwards.|
|State Bank of India||8.40-8.80|
|Axis Bank||7.90 – 9.30|
|IDFC First Bank||6.50-14.00|
|Bank of Baroda||8.20-13.85|
|PNB Housing Finance||7.75-11.00|
|L&T Housing Finance||10.30-10.90|
|LIC Housing Finance||7.50-10.50|
|Godrej Housing Finance||7.99-10.99|
|Bajaj Housing Finance||8.00-9.05|
|Tata Capital||10.10 onwards|
|Kotak Mahindra Bank||9.50-11.70|
Federal Bank Loan Against Property Customer Care
For any queries or additional information on Federal Bank LAP, you can connect with the customer care executives of Federal Bank at +91 484 2630995.
From refinancing to reducing your interest, we have the answers right here.
What is the maximum amount of loan you can avail of under the Federal Bank Loan Against Property?
You can avail of a maximum of ₹ 5 crores of loans against the property from the Federal Bank.
What are the different types of facilities Federal Bank offers to its business customers seeking a Loan Against Property?
Term Loans, Working Capital, and Demand Loans are three different types of facilities for customers seeking Federal Bank Loan Against Property.
How much processing fees do you have to pay for Federal Bank LAP?
Federal Bank levies a processing fee starting from as low as 0.50% of the loan amount sanctioned for its Loan Against Property.
What is the maximum repayment period you will get under Federal Bank Loan Against Property?
The maximum repayment tenure allowed under the Federal Bank Loan Against Property is – 30 months for a demand/overdraft loan, 120 months for a term loan, and 30 months for a non-funded limit.
What kinds of properties can you provide as collateral for Federal Bank Loan Against Property?
Customers can provide commercial, residential, and industrial properties as collateral for securing Loan Against Property from Federal Bank. Also, the property should be registered under the name of the applicant or co-applicant.
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