Central Bank of India Cent Rental Scheme (Loan Against Rental Income)

Central Bank of India Cent Rental Loan Scheme: Summary

This loan helps property owners who have let out or leased their property to govt or semi-govt units, public sector undertakings (PSUs), financial institutions, reputed corporations, multinational companies (MNCs), etc. get a loan against their rental income.
This secured loan can be used for all types of personal expenses including overseas travel, medical emergencies, etc. or to consolidate high-interest debts. Please note that the property rented or leased out must be located in metro, urban or semi-urban areas (i.e. should not be in a village).

Features of Cent Rental Loan Scheme (Loan Against Future Lease Rentals)

Why this Loan?

  • The Cent Rental Loan Scheme is given to people who have let out or leased their property in metro, urban or semi-urban areas to govt or semi-govt units, PSUs, financial institutions, reputed corporations, MNCs, etc.
  • This is a secured loan where the future rent receivables are assigned in favour of the bank
  • The borrower gets access to funds to take care of any of their personal needs. You cannot use it for speculative purposes
  • Borrowers can also avail of this scheme to pay off their high-interest credit card debts and loans, thereby consolidating their debts
  • This loan is currently offered as a term loan while earlier it used to be offered as an overdraft also

Loan Amount

  • The maximum loan amount sanctioned under this scheme is Rs. 5 crore, provided the same is less than 65% of the future rental income of the loan period
    In other words, if the rental income was Rs 10 lakh for the residual period, you will likely get only Rs 6.5 lakh as maximum loan
  • The loan amount should not be more than 150% of the value of the property

Interest

  • The interest rate applicable to this loan is defined as the sum of Repo Rate, Spread and Credit Risk Premium.
  • Loan Up to 3 Years: The interest rate applicable to this loan is 12.15%
  • Loan for More than 3 Years: The interest rate applicable to this loan is 12.65%

Repayment

  • Term Loan: This loan must be repaid within 84 months or the unexpired lease period, whichever is lower
  • Overdraft: Though it is not offered now, the overdraft when it was offered had a maximum repayment period of 12 months or the unexpired lease period, whichever was lower

Security Needed

  • The bank asks for the assignment of future rent receivables in favour of the bank
  • The realisable value of the property should be at least 150% of loan amount
  • Previously: The bank used to ask for an equitable mortgage of any property to the extent of 100% of the proposed loan for a repayment period up to 3 years, 133% of the proposed loan for repayment period above 3 years and 200% in cases where there is difficulty in entering an agreement with the tenants to assign the future rentals

Margin Money (Borrowers Contribution to Total Cost)

  • This information is not mentioned on the bank’s website. It is likely that the bank may not ask for any margin money as there is usually no fixed or specific purpose for which the money is needed, unlike a car loan or a home loan

Processing and Documentation Charges

  • Processing Charges: The bank charges up to 1% of the loan amount for processing the loan, with a minimum of Rs. 5,000 and a maximum of Rs. 3 lakh
  • Documentation Charges: For loans of up to Rs. 50 lakh, the documentation charges are Rs. 2,500. For loans above Rs. 50 lakh, it is Rs. 5,000.

Documents Needed

  • Loan Application Form duly filled and signed by the applicant and co-applicant, if any
  • Two Passport Size Photographs of applicant and co-applicant
  • Personal ID Proof: Aadhaar Card, PAN Card, Passport or Driving License. PAN Card / PAN Card Issuing Letter is must
  • Signature Proof: PAN Card, Banker’s Verification, Driving License or Passport
  • Residential Address Proof (Any One): Aadhaar Card, Electricity Bill, Post-paid Phone Bill, Valid Rent Agreement
  • Documents related to the Central Bank of India Pension account
  • Letters should be addressed to the Pension Disbursing Authority and the particulars of the loans granted should be noted invariably in the Pension Register/PPO maintained with the pensioner and SB master

Reference Facts

  • Central Bank of India Website: www.centralbankofindia.co.in and www.centralbank.net.in (net banking)
  • Headquarters: Mumbai, Maharashtra
  • Call Centre Toll-Free Number: 1800 22 1911, 1800 110 001, 1800 180 1111