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A Loan against Property is a type of secured loan availed against a residential or commercial property kept as collateral with the lender. In this loan, you get as much amount you want and can be paid back with easy monthly installments. From this loan, you can buy any property or can make your own home or residence.
You can mortgage both commercial and residential property for availing LAP. However, there should be no other charges on the property i.e. No other loan running on the property offered as a security for Loan against property. Not only personal you can avail of the commercial property too.
More often this loan is usually taken for expanding business, acquiring assets, education needs, marriage, etc. The LAP is granted against the mortgage of the commercial/ residential/industrial property. The last use of the loan should be from the uses permitted by the bank. The borrower is needed to announce the end use of the loan in its application form. Following are some of the collateral variants lenders consider with their Mortgage Loan product types:
Self-occupied residential property, including house, apartment, flat, etc.
Rented residential properties are also accepted as Property Loan types.
Commercial property such as an office building, shops, malls, complexes, etc.
A plot of land under your ownership is accepted as one of the Home Mortgage Loan types.
1. Immediate funds availability
2. Fast and easy loan processing
3. Speedy approvals
4. Available for both salaried and self employed individuals
5. Simple and hassle free documentation
6. Flexible tenure range from 2 years to 20 years
7. Low interest rate starts at 9.80% to 14.50% per annum
8. Easy balance transferring
9. This loan is available against self occupied rental property such as house, flat, apartment etc.
10. It is also provided against rented residential properties.
11. It is available by mortgaging commercial properties like an office building. Malls, shopping complex, shops etc.
Property Loan with unique benefits which enable borrowers to meet their high-end expenses with ease. Some of these benefits are as follows:
1. Lower EMIs: Opt for a long repayment tenure of up to 20 years which distributes the loan amount, and you get to pay a lower EMI amount every month.
2. Fastest loan approval: Avail this fastest Mortgage Loan in India disbursed to your account within 4 days post-approval.
3. Low-interest rates: It provides Loan against Property at low rates of interest, which makes repayment affordable.
4. Low to no prepayment charges: An individual availing for a Property Loan at floating interest rates enjoys part-prepayment and foreclosure facilities at nil charges.
To apply for a loan against property, you have to pay fees and charges applied by the Bank. It covers all charges and fees made by a bank to their customers. The following charges are taken from loan against property i.e. processing fee, prepayment charges etc.
1. Processing fee : 1% to 2% of the loan amount
2. Prepayment charges : NIL
3. Foreclosure charges : NIL
Before applying for a loan against property, you should fulfil all basic eligibility criteria as prescribed by the bank. You will get your loan amount very soon if you meet all the required eligibility criteria once the documentation is done.
A person must be Salaried and Self Employed Professionals
5 years’ work experience (for salaried individuals)
Minimum 2 years in business with a positive net worth (for Self-employed)
At the time of taking the loan, minimum age requirements are 23 years and maximum of 70 years
Good credit rating score
No pending or overdue loan remaining
Any applicant who is going to avail a loan against property must have to submit the following documents. These documents are the requirements for the lenders who are providing you the amount of loan.
A salaried employee needs to furnish the following documents:
Identity proof like PAN card, Aadhaar Card, Voter ID Card, Passport, or any other government ID.
Address proof like Voter ID Card, Aadhaar Card, Passport, Utility bill, Ration Card, or any other address proof issued by the government.
Salary slip – latest.
Last 3 months’ bank account statement.
Income Tax returns.
Documents of property to be mortgaged.
A self-employed individual needs to furnish the following documents:
Voter ID Card, Aadhaar Card, Passport, or any other government ID for Identity proof.
Utility bill, Voter ID Card, Aadhaar Card, Passport, or any other address proof issued by the government.
Last 6 months’ bank account statement.
Documents of property to be mortgaged.
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BANKS |
INTEREST RATE |
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Starts at 11.25% |
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Starts at 11% |
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Starts at 11% |
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Starts at 11% |
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Starts at 10.85% |
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Starts at 10.50% |
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Starts at 11.25% |
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10.65% to 16.25% |
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Starts at 8.60% |
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Starts at 8.75% |
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9.50% to 13.50% |
Loan against Property (LAP) can be availed by both self-employed and salaried individuals for personal and professional needs. Various banks provide LAP with different interest rates. For LAP one must be eligible. Along with eligibility, some crucial documents needed too.
There are two ways to apply for loans against property ::
1. Offline Method : By visiting nearest bank branch
2. Online Method :
Firstly visit lenders website from which you want to get a loan
Fill the application form and read all the term and conditions
Attach all required documents with an application form
After submitting form lenders will let you know that you eligible or not for the loan
Equated Monthly Instalments or EMIs are fixed amounts paid by the borrower on a fixed date every month to the financial institution towards loan repayment. Calculating the EMI in advance helps to know the affordability of the borrower, plan the finances better and also select a suitable bank. This calculation can be done by using EMI Calculator, an online tool.
The LAP EMI Calculator can be used to compute your monthly EMI while availing a mortgage loan. This significantly helps in taking a clear and better decision by comparing different loan deals. By providing the details of the loan principal amount, applicable interest rate and loan
The following mathematical formula is used to calculate EMI of Loan Against Property is :
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
In the above-mentioned formula,
EMI - Equated monthly instalment
P - Principal amount (borrowed amount)
R - Applicable rate of interest (monthly basis)
N - Loan tenure or number of EMIs
Bank offered Financials products
You can apply online or offline by visiting the nearest bank branch with documents for loan against property.
The following mathematical formula is used to calculate EMI of Loan Against Property is :
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
In this formula,
EMI - Equated Monthly Instalment
P - Principal amount (amount borrowed as loan)
R – Applicable rate of interest (interest rate should be on a monthly basis)
N - Loan tenure or the number of EMIs to be paid (tenure should be in months
At the time of taking the loan, minimum age requirements are 23 years and maximum of 70 years to apply for loan against property.
You repay the loan in Equated Monthly Installments (EMIs) comprising principal and interest. Repayment by way of EMI commences from the month following the month in which you take full disbursement.
1% to 2% of the loan amount processing fee is provided in loan against property.
A Loan against Property is a type of secured loan availed against a residential or commercial property kept as collateral with the lender. In this loan, you get as much amount you want and can be paid back with easy monthly installments. From this loan, you can buy any property or can make your own home or residence.
There is no prepayment penalty and foreclosure charges are applied in loan against property.
A co-applicant for 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.
Different lenders have different criteria for the type of property to be accepted against a mortgage loan. However, mostly all financial institutions accept 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 financial institution.
Last Updated on : 22/Oct/2020Know More About
You're eligible for a Loans Against Properties if you:
Are legally adult enough to handle it
Have still got it
Get a regular pay check
Make more than a basic buck
Your eligibility depends on:
Earn more than minimum income required
Maximum allowed Loans Against Properties is Rs. 10K to Rs. 45 lakhs
EMIs of other loans loweryour eligibility
Boost your eligibility by:
Pay off your credit card bills
Choose longer tenure loan up to 5 years
Nothing gets done without that paperwork (which we'll happily carry over to the bank for you, no sweat). Here's what you'll need:
- 1. Photo ID and age proof
- 2. Signed application form with photograph
- 3. Residence proof
- 4. Last 6 months bank statement
- 5. Documentation for salaried applicants:
- Last 3 months salary - slips
- Form 16 or Income Tax Returns
- 6. Documentation for self-employed applicants:
- Last 3 years Income Tax Returns with computation of Income
- Last 3 years CA Certified / Audited Balance Sheet and Profit & Loss Account
Updated on 25 Nov 2017
| Loans Against Properties Details | |
|---|---|
| Interest Rate (Monthly reducing balance) | 11.25% - 0% |
| Processing Fees | Varies with bank |
| Loan Tenure | 1 year to 9 years |
| Pre-closure Charges | Varies with bank |
| Guarantor Requirement | Varies with bank |
Loans Against Properties EMI Calculator