+ Loan Against Property

Loan Against Property

A Loan against Property is a mortgage loan provided by banks and financial institutions for personal as well as business purposes.

Loan Against Property Overview

A Loan against Property can be availed for a variety of purposes ranging from home renovation to purchase of machinery as well as to meet the shortfall of working capital. It is a safe proposition for the banks because they have collateral of the property as support for the finance they provide.

Salaried people opt for mortgage loans to cater to expenses like the educational needs of their children, medical expenses, home renovation, and so on. Business enterprises prefer the Loan against Property as collateral towards Business Loans and for procuring working capital requirements.

A Loan against Property is easy to procure because it is secured in nature. Banks usually maintain a margin while sanctioning a Loan against Property. This margin usually ranges from 50-90% of the value of the property (also known as LTV or Loan-to-Value). This facility is also popular because the borrower can utilize the property in spite of mortgaging it in favour of the bank. 

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Loan Against Property Eligibility Criteria

Some of the Elgibility Criteria when applying for a Loan Against Property Are As Follows

  • Income
    • Age (min. 21 years)
    • Property Valuation
    • Existing Liabilities (if any)
    • Current Work Experience
    • Financial Documents
    • Number of Dependants

The eligibility for LAP is calculated on basis of either the percentage of property value that you own and the amount of income you have to enable you to return the EMI on the Loan. So you can get Loan against property upto annex % of property value and the net amount that you earn after other EMI has been deducted from your net income

Loan against Property is given on the below mentioned property types and the percentage of loan you can get is given below:

Loan Against Property – For a Residential Property

Self Occupied – 65% of Property Value

Vacant – 55% of Property Value

Rented – 55% of Property Value

Loan Against Property – For a Commercial Property

Self Occupied – 50% of Property Value

Vacant – 40% of Property Value

Rented – 40% of Property Value

This varies from Bank to Bank by 5 – 10% of the above mentioned percentages.

In order to calculate how much you would be estimated to pay, most banks use a formula which is given below.

Loan Against Property for Salaried Individuals:-

{(NTH – Obligation) * 60%} / EMI per Lac

Loan Against Property for Self Employed Individuals:-

{(NTH – Obligation) * 65%} / EMI per Lac

Whichever is lower from the value of the property or your income- that loan amount will be given to you.

Other Eligibility Criteria Revolves Around the Maximum Age of The Person Applying For The Loan

For Salaried employees – 60 Years

For Self-Employed – 70 Years


Documents Required for Loan Against Property

  1. KYC Documents

The borrower should furnish KYC documents regarding identity proof and address proof. These documents include:

Identity Proof

  1. PAN Card
  2. Aadhaar Card
  3. Voter ID
  4. Passport
  5. Driving Licence 

Address proof

  1. Registered Rent agreement
  2. Aadhaar Card
  3. Driving Licence
  4. Lease agreement
  5. Passport
  6. Latest gas/Electricity bill

2.Income Proof - Financial Documents

  1. Salary slips for the last 6 months for salaried employees (In addition, IT returns for the previous 3 years along with Form 16)
  2. IT returns for the past 3 years for self-employed persons (Some banks accept 2 years IT returns as well)
  3. Statement of A/c for the past 1 year where your salary is credited (in the case of salaried people)
  4. Profit and Loss statement and Balance sheet for the last 2 years in the case of self-employed persons
  5. Sales tax, GST registration certificates, if applicable
  6. Partnership deed in case of partnership firms (if the applicant is one of the partners or the firm itself)
  7. Certificate of Incorporation for limited companies(if the applicant is one of the directors or the company itself)

Other Documents:

  1. Loan application form

Property Documents:

  1. Copies of all property documents that can establish the chain of ownership for the past 30 years
  2. Encumbrance certificate for 30 years
  3. Property tax paid receipt

Loan Against Property Interest Rate

Name of Loan Provider ICICI Bank

Loan Amount

  • No maximum limit
  • Depends on the income of the borrower and value of the property
  • Fixed Obligations to Income Ratio - 65%

Tenure

Up to 15 years

Interest Rates

Starts from 9.50%

Processing Fees

0.50% of the sanctioned loan amount

Eligibility

An individual having a regular source of income and marketable property in select cities of India in their name

Features

Attractive interest rates

Faster processing

Longer tenure

Loans against commercial and residential property

Types of Loan against Property

Start a new business

Fund long-term working capital

Fund children's education

Repay other high-interest debts


Name of Loan Provider HDFC Bank 

Loan Amount

10 Lakhs to 5 Crores

Depends on the income of the borrower and value of the property

Fixed Obligations to Income Ratio - 65%

Tenure

Up to 15 years

Interest Rates

Starts from 9.60%

Processing Fees

1% of the sanctioned loan amount

Eligibility

Individuals having a regular source of income and marketable property in select cities of India in their name

Minimum income - 25,000 per month

Credit score - 650 and above

Features

Attractive interest rates

Faster processing

Longer tenure

Loans against commercial and residential property

Multiple repayment options

Types of Loan against Property

Meet business requirements

Higher education of children


Name of Loan Provider Axis Bank

Loan Amount

No maximum limit

Depends on the income of the borrower and value of the property

Fixed Obligations to Income Ratio - 65%

Tenure

Up to 15 years

Interest Rates

Starts from 11% for Term Loans and 12% for an Overdraft limit

Processing Fees

0.50% of the sanctioned loan amount

Eligibility

Individuals having a constant and regular source of income and marketable property in select cities of India in their name

Minimum income - 25,000 per month

Credit score - 650 and above

Minimum age for salaried - 24

Maximum age for salaried - 60 years

Minimum age for self-employed - 24

Maximum age for self-employed - 65 years

Features

Nil prepayment charges

Lease rental discount facility available

Reward points on your LAP

Overdraft facility available

Types of Loan against Property

Meet business requirements

Higher education of children


Name of Loan Provider Citibank

Loan Amount

25 Lakhs to 5 Crores

Depends on the income of the borrower and value of the property

Fixed Obligations to Income Ratio - 60%

Tenure

Up to 15 years

Interest Rates

Starts from 8.65% to 9.50%

Processing Fees

0.25% of the sanctioned loan amount

Eligibility

Individuals having a constant and regular source of income and marketable property in select cities of India in their name

Minimum income - 25,000 per month

Credit score - 650 and above

Age - between 23 to 60 years

Features

Option to choose between T-Bill and MCLR rate

Overdraft facility available

Lower EMIs

Excellent customer service

Types of Loan against Property

Meet business requirements

Higher education of children

                                                                
Name of Loan Provider State Bank of India

Loan Amount

25 Lakhs to 7.5 Crores

Depends on the income of the borrower and value of the property

Fixed Obligations to Income Ratio - 65%

Tenure

Up to 15 years

Interest Rates

Starts from 10% to 11.45%

Processing Fees

1% of the sanctioned loan amount

Eligibility

Individuals having a regular source of income and marketable property in select cities of India in their name

Minimum income - 25,000 per month

Credit score - 650 and above

Age - 18 to 70 years

Features

Interest Calculator on daily reducing balance

Complete transparency

No hidden fees

No prepayment penalty on floating rate loans

Types of Loan against Property

Meet business requirements

Higher education of children

Medical expenses

Any personal expenses other than speculative purposes


Name of Loan Provider Standard Chartered Bank

Loan Amount

10 Lakhs to 5 Crores

Depends on the income of the borrower and value of the property

Fixed Obligations to Income Ratio - 65%

Tenure

Up to 15 years

Interest Rates

Starts from 9.50%

Processing Fees

1% of the sanctioned loan amount

Eligibility

Borrowers having a regular source of income and marketable property in select cities of India in their name

Minimum Income - 25,000 per month

Credit score - 650 and above

Age - 21 to 60 years for salaried people, and up to 65 years for self-employed individual

Features

Quick processing of loans

Attractive rates of interest

Higher the income, lesser is the rate of interest

Types of Loan against Property

Meet business requirements

Higher education of children

Medical expenses

Any personal expenses other than speculative purposes


Name of Loan Provider Punjab National Bank

Loan Amount

25 Lakhs to 5 Crores

Depends on the income of the borrower and value of the property

Fixed Obligations to Income Ratio - 65%

Tenure

Up to 15 years

Interest Rates

Starts from 10.20% for floating rate borrowers

Starts from 10.35% for fixed rate borrowers

Processing Fees

1% of the sanctioned loan amount

Eligibility

Individuals having a continuous source of income and marketable property in select cities of India in their name

Minimum income - 25,000 per month

Credit score - 650 and above

Age - 21 to 60 years for salaried people

Age - 23 to 65 years for self-employed individual

Features

PAN India Presence

Instant loan approval in 3 minutes

Complete transparency

Types of Loan against Property

Meet business requirements

Higher education of children

Medical expenses

Any personal expenses other than speculative purposes


Name of Loan Provider Yes Bank

Loan Amount

25 Lakhs to 5 Crores

Depends on the income of the borrower and value of the property - Margin - 15% of the property value

Fixed Obligations to Income Ratio - 65%

Tenure

Up to 15 years

Interest Rates

Starts from 10%

Processing Fees

1% of the sanctioned loan amount

Eligibility

Individuals having a regular source of income and marketable property in select cities of India in their name

Minimum income - 25,000 per month

Credit score - 650 and above

Age - 18 to 60 years

Features

Loan up to 85% of the property value

Low EMI

Overdraft facility available

Excellent customer service

Types of Loan against Property

Meet business requirements

Higher education of children

Medical expenses

Any personal expenses other than speculative purposes


Name of Loan Provider Dewan Housing Finance Limited (DHFL)

Loan Amount

40 Lakhs to 10 Crores

Depends on the income of the borrower and value of the property

Fixed Obligations to Income Ratio - 65%

Tenure

Up to 15 years

Interest Rates

Stars from 12%

Processing Fees

2% of the loan amount

Eligibility

Individuals having a regular source of income and marketable property in select cities of India in their name

Minimum income - 25,000 per month

Credit score - 650 and above

Age - 21-60 years for salaried and up to 65 years for self-employed

Features

Higher loan limit

Balance transfer facility available

Simplified documents

No prepayment penalty for floating rate borrowers

Types of Loan against Property

Meet business requirements

Higher education of children

Medical expenses

Any personal expenses other than speculative purposes


Name of Loan Provider Aditya Birla

Loan Amount

20 Lakhs to 30 Crores

Depends on the income of the borrower and value of the property

Fixed Obligations to Income Ratio - 65%

Tenure

Up to 15 years

Interest Rates

Starts from 10% to 11%

Processing Fees

0.50% to 1% of the sanctioned loan amount

Eligibility

Individuals having a continuous source of income and marketable property in select cities of India in their name

Minimum income - 25,000 per month

Credit score - 650 and above

Age - 21 to 60 years for salaried individuals, and up to 70 years for self-employed individuals

Features

Attractive interest rates

Quick and transparent processing

Residential and commercial property allowed

Multiple choices of repayments - EMI and structured repayments

Balance transfer facility available

Types of Loan against Property

Meet business requirements

Higher education of children

Medical expenses

Any personal expenses other than speculative purposes


Name of Loan Provider Fullerton India

Loan Amount

10 Lakhs to 10 Crores

Depends on the income of the borrower and value of the property

Fixed Obligations to Income Ratio - 65%

Tenure

Up to 15 years

Interest Rates

Starts from10% to 11%

Processing Fees

1% to 3% of the sanctioned loan amount

Eligibility

Individuals having a constant source of income and marketable property in select cities of India in their name

Minimum Income - 25,000 per month

Credit score - 650 and above

Age - 21 to 65 years

Features

Transparent processing

Balance transfer facility available

Prepayment charges - 4% to 5%

Types of Loan against Property

Meet business requirements

Higher education of children

Medical expenses

Any personal expenses other than speculative purposes


Name of Loan Provider IDFC First

Loan Amount

20 Lakhs to 10 Crores

Depends on the income of the borrower and value of the property

Fixed Obligations to Income Ratio - 65%

Tenure

Up to 15 years

Interest Rates

Starts from 10% to 11.45%

Processing Fees

Up to 1% of the loan amount

Eligibility

Individuals having a proper and regular source of income and marketable property in select cities of India in their name

Minimum Income - 25,000 per month

Credit score of 650 and above

Age - 23 to 70 years

Features

Loan available on residential, commercial, and industrial properties

Easy repayment options stretching up to 15 years

Types of Loan against Property

Meet business requirements

Higher education of children

Medical expenses

Any personal expenses other than speculative purposes


Name of Loan Provider Bajaj Finserve

Loan Amount

25 Lakhs to 7.5 Crores

Depends on the income of the borrower and value of the property

Fixed Obligations to Income Ratio - 65%

Tenure

Up to 15 years

Interest Rates

Starts from 9.50% to 12%

Processing Fees

1% of the sanctioned loan amount

Eligibility

Individuals having a constant source of income and marketable property in select cities of India in their name

Minimum Income - 25,000 per month

Credit score - 650 and above

Minimum Age - 25 years

Features

Quick turnaround up to 72 hours

Loans against residential, commercial, and industrial property

Flexibility of repayments

Customised insurance scheme

Types of Loan against Property

Meet business requirements

Higher education of children

Medical expenses

Any personal expenses other than speculative purposes