Loan against Property
Loan against Property (LAP), also known as mortgage loan, allows consumers to raise funds by leveraging their residential, commercial or industrial properties. Like unsecured personal loans, LAP can also be availed for meeting both personal and business needs other than speculative purposes. Banks and HFCs offer loan against property for tenures of up to 20 years. The loan amount for LAP can go up to 75% of the property’s market value, depending on the lender and the credit profile of the borrowers. Many lenders also offer Lease Rental Discounting (LRD) facility, which allows consumers to avail loan by pledging the rental receipts of their tenants.
Loan Against Property Interest Rates offered by Top Banks & HFCs
| Lender | Interest Rates (p.a.) | Processing Fees |
|---|---|---|
| Bank of India | 11.25% onwards | Up to 1% of loan amount (Rs 5,000 - Rs 50,000) |
| Bajaj Housing Finance | 8.50% - 18.00% | Up to 1% of loan amount |
| Bank of Baroda | 10.85% - 16.50% | Up to 1% (Rs 8,500 upfront - Rs 75,000) |
| Bank of Maharashtra | 10.45% - 11.95% | 1% of loan amount |
| Federal Bank | 12.60% onwards | 1% of the limit sanctioned with a minimum of Rs. 3,000 |
| HDFC Bank Limited | 9.50% - 11.00% | Up to 1% of loan amount (minimum Rs 75,000) |
| ICICI Bank | 10.85% - 12.50% | Up to 1% of loan amount |
| IDFC First Bank | 9.00% - 16.50% | Up to 3% of loan amount |
| Indian Bank | 10.00% - 12.75% | 1% of loan amount |
| Indiabulls Housing Finance | 9.75% onwards | 1% onwards |
| Kotak Mahindra Bank | 9.15% onwards | Up to 1% of loan amount |
| L&T Housing Finance | 9.50% onwards | Up to 2% of loan amount |
| LIC Housing Finance | 9.50% - 11.55% | Up to 1% of loan amount |
| PNB Housing Finance | 10.40% - 12.75% | 0.75% of loan amount (Max. Rs 1 lakh) |
| State Bank of India | 10.60% - 11.30% | Flat Rs 10,000 |
| Tata Capital | 10.10% onwards | Up to 1.25% of loan amount |
| Union Bank of India | 10.50% - 13.15% | Up to 1% of loan amount (Min. Rs 5,000 & Max. Rs 1 lakh) |
| UCO Bank | 10.85% - 12.00% | 0.50% of loan amount (up to Rs 2 lakh) |
Note: Interest Rates as of 1 September 2023
Eligibility Criteria for Loan against Property
The eligibility criteria for availing LAP varies across lenders, below are some general conditions that must be fulfilled to apply for loan against property:
Residential Status: Resident Indian and Non-resident Indian
Minimum Age Limit: 18 years
Maximum Age Limit: 70 years
Employment Type: Salaried, Self-employed Professional and Self-employed Non-Professional
Minimum Salary: At least Rs. 12,000 per month
Net Annual Income: At least Rs. 1.5 lakh p.a.
Work Experience: At least 1 year in the current organisation
LTV Ratio: Up to 75% of property value
Credit Score: Preferably 750 and above
- Property Type: Residential, Commercial and Industrial properties are eligible to be pledged as collateral. Lenders will also consider the age and condition of the property before accepting the property as collateral.
Loan Against Property EMI Calculator
Before applying for mortgage loan, use Corporate Banker loan against property EMI calculator to know how much EMI you can afford on a certain loan amount, interest rate and tenure. The online EMI calculator gives accurate results instantly and also displays total interest payable, total principal payable and amortization schedule to help you understand your loan repayment better.:
Documents Required to Apply for Loan against Property
Proof of Identity (Passport/ Voter ID Card/ Driving License/ PAN Card)
Proof of Residence (Ration card/ Telephone Bill/ Electricity Bill/ Rental Agreement/ Passport/ Bank Passbook or Statement/ Driving License)
Proof of Age (PAN Card/ Passport/ Any other certificate from a statutory authority)
Proof of Income for Salaried (Form 16, Latest Payslips, ITR of past 3 years and investment proofs (if any)
Proof of Income for Self Employed (Details of ITR of last 3 years, Balance Sheet and Profit & Loss Account Statement of the Company/Firm, Business License Details and Proof of Business Address)
Property-related Documents (Title Deeds including the previous chain of the property documents, Nil Encumbrance Certificate on the concerned property, approved plan [if applicable])
Read Also: The complete list of documents required for loan against property
Loan Against Property Processing Fees & Other Charges
Below are some of the general fees and charges that may be applicable to your mortgage loan.
| Processing Fees | 1% - 2% of loan amount |
|---|---|
| Part Prepayment Charges | Floating Rate: Nil Fixed Rate: Up to 4% on outstanding principal |
| Foreclosure Charges | Floating Rate: Nil Fixed Rate: Up to 2% on outstanding principal |
| Penal Interest | Usually at 24% p.a. (2% per month on the overdue installment/s) |
How to Apply for Loan Against Property at Corporate Banker.org?
Step 1: Provide basic details such as your mobile number, loan amount, property location, employment type, etc.
Step 2: Compare and apply from the list of offers.
Step 3: Wait for the loan experts to get in touch with you.
FAQs
Q1. Is it mandatory to have a co-applicant for availing LAP?
Ans:A co-applicant for a loan against property is mandatory only when the property being mortgaged is owned by more than one person. In such a case, all co-owners of the property need to apply as co-applicants.
Q2. What types of properties are accepted by lenders providing Loan Against Property (LAP)?
Ans:Different lenders have different criteria for the type of property to be accepted against a mortgage loan. However, mostly all lenders accept the residential, commercial or industrial property. It is important to note that the physical condition and age of the property may affect its acceptance by the lenders.
Q3. What is the maximum loan tenure available under LAP?
Ans: Mostly, the tenure of a loan against property goes up to 20 years. However, this may vary from one lender to another.
Q4. Can NRIs avail loans against the property?
Ans:Yes, there are several financial institutions that offer loan against property to NRIs.
