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Home » Fill up your financial gap Securely by Obtaining a Loan against the Property

Fill up your financial gap Securely by Obtaining a Loan against the Property

Introduction – A loan against property, commonly referred to as a mortgage loan, enables customers to borrow money by implementing their personal, business, along with industrial properties. LAP, involving unsecured loans for personal reasons, may be used for personal as well as professional purposes other than speculation.

  • Banking institutions as well as HFCs provide loans against property at modest rates of interest and for a maximum of twenty years. Given the circumstances surrounding the lending institution and the creditors’ credit profiles, the borrowing amount for LAP may exceed up to 70% of the market price of the property.
  • A lot of lenders also provide Lease Rental Discounting (LRD) services that enable customers to obtain a loan by accepting their tenants’ leasing receipts as well.

Top Banks and HFCs offer loans against property and their Interest Rates

Lending InstitutionInterest Rate Per AnnumProcessing Charge
1. BOI or Bank of India11.25%1%Min- Rs/ 5000, Max- Rs/ 50,000
2. Bajaj Housing Finance8.50-18.00%Up to 1%
3. Bank Of Baroda10.85-16.50%Up to 1%
4. Bank of Maharashtra10.20-11.70%1% on the amount of the Loan
5. Federal Bank12.60%1% of the sanctioned limit, with a minimal amount of Rs. 3,000
6. HDFC8.95-10.25%Maximum loan amount’s 1.50% or Rs 4,500, which is greater.
7. Indian Bank10.00-12.60%Up to 1%
8. ICICI Bank10.85-12.50%Up to 1% on Loan Amount
9. IDFC First Bank8.75-16.25%Up to 3% on Loan Amount
10. Indiabulls Housing Finance9.75%1%
11.Kotak Mahindra Bank9.15%Up to 1%
12. L & T Housing Finance9.60%Up to 2%
13. LIC Housing Finance9.50-11.55%0.5 % on Loan Amount
14. PNB Housing Finance8.99-12.85%0.75 % on Loan Amount
15. State Bank of India or SBI10.60-11.30%Flat 1,000 Rupees
16. Tata Capital10.10%Up to 2%
17.UBI10.50-13.15%Up to 1% on Loan Amount

When applying for a loan against property, you should satisfy the requirements for eligibility. Whereas the requirements for becoming eligible for LAP vary by provider, the following represent a number of basic requirements that must be met in order to be considered for a loan against property:

Loan against property /eligibility criteria

Residential StatusIndian Resident/ Non-Resident Indian
Minimum AgeMin 18 Years
Maximum AgeUp to 70 years
Type of EmploymentSalaried/ Professional Self-Employed/ Self-Employed Non-professional
Minimum Salary AmountAt least 12,000 Monthly
Annual IncomeAt least 1.5 Lakh per annum
Work Experience1 year experienced in the current field
Eligible Amount of LoanUp to 25 Crores
LTV RatioUp to Property Value’s 75%
Credit ScoreUsually, 750 or higher
Type of PropertyResidential/Commercial, along with industrial properties

Use a loan against property EMI calculator prior to requesting a mortgage loan to determine the approximate EMI you are able to pay on a given loan amount, rate of interest, and duration. The costs you incur every month should not be impacted by your loan against property EMI, either.

Documents necessary for applying for a loan against property

1. Identity Proof (Copy of Passport/Voter ID/Driving License/PAN Card)

2. Proof of Age

3. Income Proof of Salaried Persons

4. Income Proof of Self-employed Persons

5. Records or the Documentation related to Property

How to Apply

Step 1: Include basic information which includes your phone number, the loan amount, along with property address.

Step 2: Review and select an offer from the available choices.

Step 3: Allow the loan professionals to contact you.

Is it necessary for there to be a co-applicant in order to receive LAP?

Only if the property getting mortgaged belongs to more than a single individual is a co-applicant required for a loan to be secured against the property. All partners in ownership of the property have to submit applications as co-applicants in this case.

What kinds of properties do lenders who offer loans against property allow?

A variety of lenders impose distinct requirements for the kind of property that can be used to secure the loan for a mortgage.
On the other hand, the majority of financial organizations acknowledge commercial, residential, and industrial property. It should be noted that the overall condition and age of this asset may have an impact on its authorization by the lending organization.

What is the length of the loan term permitted under LAP?

A loan against property typically has a term of a maximum of fifteen years. Though it may differ from one financial institution to the next.

Can NRIs obtain property-based loans?

Absolutely. A number of lenders provide loans against property to NRIs.

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