What is drawing power in SBI home loan?

I know banking terms and procedures make some people a little anxious. But don’t worry! If you are wondering what is drawing power in SBI loan account, I can make you understand in simple terms. The drawing power is the maximum amount that can be given to the borrower under an SBI house loan. It may be changed frequently to take into account the changes to the borrower's credit situation or the appreciation of their property. However, there are many factors that affect the drawing power.

What are the Factors Impacting SBI Home Loan Drawing Power?

• Property Valuation: 

The highest loan amount that you can anticipate receiving is dependent upon the property's value. The more the property is worth, the more money that can be borrowed.

• Repayment ability:

A number of variables, including your income, expenses, and other financial commitments, affect your repayment ability.

• Credit Score:

A high credit score can boost your drawing power and enable you to disburse a larger loan amount.

• Risk Factors:

Several risk factors are taken into account by banks, including the location and condition of the property, the status of the employees, and other elements that may have an impact on loan repayment.

Calculation of Drawing Powеr

Thе drawing powеr formula usеd by SBI is: Drawing Powеr = (Nеt Takе Homе Salary + Nеt Rеntal Incomе + Othеr Sourcеs of Incomе) x FOIR x Factor of Propеrty Valuе The term FOIR, or Fixed Obligation to Income Ratio, in this formula, refers to the proportion of your monthly income to your monthly expenses. The portion of the property value that the bank can disburse as a loan amount is the factor of property value. Typically, SBI will loan up to 75% of the property's value. This is what is drawing power in SBI loan account. Get Upto 90% of Property’s Value as Home Loan through NoBroker Home Loan Service. Read More: What is overdraft facility in SBI home loan?

When you take a home loan, there are so many terms and phrases you hear for the first time. And it makes you a bit more confused if you don’t understand them. One of the terms I didn’t understand while taking a home loan was drawing power. But then I consulted one of my friends and he guided me about it in detail. So let me tell you what is drawing power in SBI home loan?

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What is the meaning of drawing power in SBI home loan?

The amount of the loan that must be repaid by you in line with the initially agreed EMI schedule at the time of loan sanction is referred to as the "drawing power." The real amount of the loan that is still owed to the bank at any one time is the outstanding amount.

If you are not consistent with your payments, your outstanding loan balance may be higher than the DP. Conversely, it may be lower than the DP if you are making early or extra loan EMI instalments.

What are the drawing power in SBI home loan meaning and its example?

Your (borrower's) maximum permitted withdrawal from the loan account is referred to as their "drawing power" in an SBI loan. It is the credit limit that can be used for a loan account, determined by your collateral, ability to repay, and other factors. Based on your loan repayment and other credit requirements, the lender determines your drawing power, which may be frequently evaluated.

Even though your loan has an approved amount of Rs.100,000 and a drawing capability of Rs.80,000, you will only be permitted to withdraw up to Rs.80,000 from the loan account. This secures the lender's interests by ensuring that you have enough collateral, are capable of repaying the loan, and you can.

What is drawing power in SBI home loan must be clear to you now.

Read More: What is RG 1 2 3 in SBI home loan? How to transfer an HDFC home loan to SBI? How to cancel SBI home loan insurance? Is a guarantor required for an SBI home loan?