INR
Loan Against Property Features
Flexible Loan Eligibility
Loans value from Rs.10 Lakh to Rs.5 Crore
Loans against commercial, residential or industrial property
Loan for your business as well as personal needs
Features and Benefits of our Loan Against Property
Secured Loan:
The loan is secured against the value of your property. The property acts as collateral, reducing the risk for the lender. This generally leads to lower interest rates compared to unsecured loans.
Loan Amount:
The loan amount is determined based on the value of the property you pledge. Generally, you can get a higher loan amount compared to personal loans or other unsecured loans.
Flexible Tenure:
The tenure (repayment period) for a Loan Against Property is usually longer compared to other types of loans, often ranging from 5 to 20 years. This allows for lower monthly installments.
Multipurpose:
The loan amount can be used for a wide range of purposes, giving you the flexibility to address various financial needs without any restrictions.
Improves Credit Scores:
Successfully repaying a Loan Against Property can positively impact your credit score, as it demonstrates responsible borrowing behavior.
Eligibility Criteria for Loan against Property
Nationality:
You need to be a Citizen of India with documents to prove your claim.
Occupation and Income:
Your lender will require you to furnish details regarding your occupation and income to prove your professional and financial stability to determine your creditworthiness.
Credit History:
Your three-digit Credit Score, indicative of your track record in respect of repayment of loans, and other forms of credit will be a deciding factor to prove your eligibility for a LAP.
Banking Relationship:
Should you have a healthy relationship with your lender, you will not be disapproved for a LAP. Additionally, your lender will offer you better terms and conditions in respect of loan value, interest rates, period of the loan, hidden charges, and processing fees.
Market Value of Property:
Your lender retains the right to decide the loan amount and terms and conditions of your mortgage loan based on the market value of your collateral property. Besides, the market value of the mortgaged property must be higher than the loan amount calculated on the current value of your property.
Title of Property:
Your lender will require you to be the current existent owner of the property, and in case of a co-application, you will require to prove multiple ownership clear title. Besides, the property must not be mortgaged with any other financial institution.
Documentation for Loan Against Property Loan
- Proof of identity/residence
- Proof of income
- Property-related documents
- Proof of Business (for self-employed)
- Account statement for the last 6 months
Fees and Charges for Loan Against Property Loan
The fees and charges of Loan Against Property Loan usually vary from lender to lender and from case to case. The aforementioned table will give you a fair idea of the fees and charges related to home loans:
| Particulars | Charges |
|---|---|
| Loan Processing Fees | 0.5% to 4% of Loan Amount |
| Loan Cancellation | Usually around Rs 3,000 |
| Stamp Duty Charges | As per actuals |
| Legal Fees | As per actuals |
| Penal Charges | Usually @ 2% per month; 24% p.a. |
| EMI / Cheque Bonus | Around Rs 400 per bounce |
Other fees and charges that lenders may levy on your personal loan include documentation charges, verification charges, duplicate statement charges, NOC certificate charges and swap.
Business Loan FAQs
What can I use a Loan Against Property for?
A Loan Against Property (LAP) allows you to borrow money by pledging your property as collateral. You can use the loan amount for various purposes, including business expansion, debt consolidation, home renovation, education expenses, medical bills, wedding expenses, travel, and other personal or business needs. The specific usage of the loan amount can vary depending on the lender and the terms of the loan agreement.
How much loan can I get against my property?
The amount of loan you can get against your property depends on several factors, including the value of the property, your income, repayment capacity, and the lender's policies. Typically, lenders offer loans ranging from 60% to 80% of the property's market value. However, some lenders may offer higher loan amounts, especially for residential properties. It's advisable to check with the lender to understand the maximum loan amount you can qualify for based on your property's value and your financial situation.
What are the interest rates for LAP?
The interest rate for Loan Against Property usually starts from 9.00% p.a and ranges anywhere between 9.00%p.a and 13-15% p.a
How do I apply for a LAP?
To apply for a Loan Against Property (LAP), check the lender's eligibility criteria, gather necessary documents, and compare offers. You can apply online or offline, submitting the application along with required documents. The lender will assess your property's value and approve the loan if you meet their criteria. Repay the loan in installments as per the agreement.
Can I still use my property if it's mortgaged for LAP?
Yes, you can continue to use your property even if it is mortgaged for a Loan Against Property (LAP). The property remains in your possession and can be used for residential or commercial purposes as before. However, you must ensure timely repayment of the loan to avoid any risk of losing the property due to default.
What is a Loan Against Property Overdraft (LAP OD)?
A Loan Against Property Overdraft (LAP OD) is a type of loan facility that allows you to withdraw funds from your LAP account up to a specified limit. Similar to a credit card or a line of credit, you can withdraw and repay funds multiple times, as long as you stay within the approved limit.With LAP OD, you only pay interest on the amount you withdraw, not on the entire approved limit. This can provide flexibility in managing your finances, as you can use the funds as needed and repay them at your convenience. However, interest rates for LAP OD are typically higher than regular LAP loans, so it's important to use this facility judiciously.
What are the benefits of LAP OD over regular LAP?
Loan Against Property Overdraft (LAP OD) offers several advantages over a regular LAP. One key benefit is its flexibility, as it allows you to withdraw and repay funds multiple times up to the approved limit, similar to a credit card. This flexibility can be especially useful for businesses with fluctuating cash flows or individuals with varying financial needs. Additionally, LAP OD offers interest savings, as you only pay interest on the amount you withdraw, not on the entire approved limit. This can result in lower overall interest costs compared to a regular LAP. Furthermore, LAP OD can serve as a convenient source of funds for emergencies or unforeseen expenses, providing quick access to cash when needed. Overall, LAP OD provides greater financial flexibility and cost savings compared to a traditional LAP.
Can I do a Balance Transfer in LAP?
Yes, you can transfer your existing LAP from one lender to another, known as a balance transfer, to benefit from lower interest rates or better terms offered by the new lender. This process involves applying for a new loan with the new lender, who then pays off your existing loan with the previous lender. Carefully compare the terms, conditions, and any associated fees to ensure that the balance transfer is a cost-effective option for you.
Can I take Top-up in LAP?
Yes, you can take a top-up loan on your existing Loan Against Property (LAP). A top-up loan allows you to borrow additional funds over and above your existing LAP amount, usually at the same or slightly higher interest rate.
What is eligibility for loan against property?
To be eligible for a Loan Against Property (LAP), you typically need to be the owner of the property offered as collateral, be within a certain age range (usually 21 to 65 years), and have a minimum income to ensure loan repayment. The value of the property and your credit score are also considered. Other factors such as employment status, existing debts, and repayment track record may also be taken into account. Eligibility criteria can vary among lenders, so it's best to check with them for specific requirements.
How is the value of the property calculated?
The value of the property for a Loan Against Property (LAP) is determined by a valuer appointed by the lender. The valuation considers factors such as the property's market value, condition, location, comparable sales, rental yield, and legal aspects. This helps the lender assess the property's worth to determine the loan amount you can borrow.
What types of properties are accepted by lenders providing Loan Against Property (LAP)?
Lenders providing Loan Against Property (LAP) typically accept various types of properties as collateral. This includes residential properties like apartments, houses, and villas, whether self-occupied or rented out. Commercial properties such as shops, offices, warehouses, and industrial units are also accepted. Additionally, lenders may consider vacant land or plots, as well as mixed-use properties that have both residential and commercial units. The acceptance of a property as collateral can depend on factors such as its location, market value, and legal status. It's advisable to check with the lender regarding their specific criteria for accepting properties for LAP.
What is the difference between Home Loan and Loan against Property (LAP)?
The main difference between a Home Loan and a Loan Against Property (LAP) lies in their purposes and the nature of the collateral. A Home Loan is specifically meant for purchasing a residential property or constructing a new home. The property being purchased or constructed serves as collateral for the loan, and the lender holds a lien on it until the loan is repaid. On the other hand, a LAP allows you to borrow money against a property you already own, which can be residential, commercial, or industrial. The property you pledge remains in your possession, but the lender has a lien on it until the loan is fully repaid. The loan amount from a LAP can be used for any purpose, such as business expansion, education, medical expenses, or debt consolidation.
Can I prepay/foreclose my Loan Against Property in advance?
Yes, you can prepay or foreclose your Loan Against Property (LAP) in advance. However, your lender may charge a prepayment penalty or fee for doing so. It's best to check with your lender regarding their policies on prepayment or foreclosure.
