Loan Against Property

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

KYC Documents

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

Identity Proof

PAN Card
Aadhaar Card
Voter ID
Passport
Driving Licence

Address proof

Registered Rent agreement
Aadhaar Card
Driving Licence
Lease agreement
Passport
Latest gas/Electricity bill

2.Income Proof - Financial Documents

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

Other Documents:

Loan application form

Property Documents:

Copies of all property documents that can establish the chain of ownership for the past 30 years
Encumbrance certificate for 30 years
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