Loan against Property(LAP) is one of the variations of the Personal advance, Laps are secured advances offered by banks and money related establishments utilizing at least one properties possessed by you as a guarantee. One can benefit these home loan advances against business property and private property guarantees. In a LAP the property is sold and a settled level of the overall market estimation of the property (regularly between 60-70% of the estimation of the property) is given to the borrower as an advance. Despite the fact that such a property is sold to the moneylender, you are still permitted to keep utilizing it for private or business purposes.
These credits are a superior choice when contrasted with individual advances due to their nearly bring down the rate of intrigue. Also, not at all like gold advances, where the gold trimmings are stored with the bank and you don’t get them back until the point that the credit is forked over the required funds, you can keep utilizing the insurance property in a LAP while you are reimbursing the advance.
Credits against property are a very favored type of advances in India and are considerably more effortlessly accessible with the surge in banks and NBFCs giving such advances. Alongside being financially savvy, these advances are sensibly helpful to benefit and reimburse because of the generally low Loans against Property loan cost.
You can submit mortgage loan application for following purposes:
- Expanding your business
- For your child’s marriage
- Funding medical treatments
- For your child’s higher studies
- Funding your dream vacation
Features of Loan against Property
- In case of a loan against property, financial institutions offer higher loan amount for a longer tenure and at attractive interest rates as compared to other loan plans.
- Quick and hassle free process of Loan against property with speedy approvals
- Residential and commercial properties are accepted as collateral to get loans against property.
- Mortgage Loans are an excellent debt consolidation tool.
Loan against Property Benefits
Loan against property is a secured loan which means it is offered only when you offer a property owned by you as security with the bank.
- Laps are usually long-term loans and repayment periods can be anything between 10 years and 15 years.
- The amount you can borrow ranges from Rs. 300,000 to Rs. 1 Crore (lower amounts may also be available).
- The rate of interest for the loan varies on a case by case basis depending on the type of property and other factors specified by the lender.
- Banks also bill the applicant for the administrative charges incurred when processing the application such as property valuation and its processing fee.
Loan against Property Eligibility Criteria
For salaried individuals, and for professionals and businessmen who are self-employed, the loan against property eligibility requirement in banks or for other institutions is pretty similar.
The Usual eligibility criteria to avail Loan against property are:
- You must be an Indian national
- You should be at least 21 years at the time of submission of the loan application
- You must have been employed by the current organization or should be involved in the current business for a specific number of years
- You must earn the minimum required salary as well as have the minimum monthly repaying capacity
- You should have a good credit history with a proven track record of timely loan EMI and credit card bill repayment. This factor may help you secure a lower interest rate and reduce loan application processing time too.
Loan against Property documents
The documents required for a loan against property are as follow:
For salaried individuals:
- Proof of identity and residence proof such as Aadhaar Card, Voter ID Card
- Salary slips of past 3 months
- Form-16 issued by a current employer
- Bank statements of salary account for the previous six months
- A cheque covering the administrative costs/processing fees incurred by the bank in processing the application
For Self-employed Business persons:
- Proof of identity and residence proof
- Educational qualification certificates, degrees, diplomas, and other academic credentials
- IT Returns of the three years preceding the one in which loan is applied for
- Bank statements of six months preceding the one in which loan is applied for
For Self-employed Professionals:
- Identity and Address proof documentation
- Certificates that prove your academic qualifications/credentials
- All registration/licensing certificate pertaining to your profession
- Business existence proof/business profile details
- Previous 3 years’ balance sheets as well as Profit & Loss Statement of the company.
- Acknowledged Income Tax statements of the company and self for previous 3 years
- Last 6 months’ bank statement.
Loan Against Property Interest Rates
Loan Against Property Interest Rates by Banks and Institutions*
| Bank/Provider Name | Interest Rates | Loan Processing Fees |
| HDFC BANK | 10.5% onwards | 0.5% of loan amt. or Max. Rs. 10,000 |
| ICICI BANK | 9.7% onwards | 0.5% of loan amt. |
| AXIS BANK | 9.75% onwards | 0.25% + ST |
| INDIABULLS | 10% onwards | 1% |
| DHFL | 10.25% onwards | 1% |
| LIC HFL | Upto 1 Cr – 10.50%; 1cr to 3 cr 10.80%; 3 cr to 5 Cr 11% | Govt Emp- Rs 1000 + ST, Others Rs2500+ST |
| PNB HFL | 10.25% onwards | Rs 10000 for salaried / 0.50% for self employed |
| TATA CAPITAL | 11.25% onwards | 1% |
| CITIBANK | Salaried :10.00% and Self Employed :Upto 1 Cr 10%, 1 Cr to 3 Cr 9.75%, Above 3 Cr 9.5% | 0.25% |
*The interest rates provided above are of key Banks and Housing Companies Operating in India, indicative and liable to change periodically.