Loans Against Properties: Interest Rates, Eligibility, Required Document

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LOAN AGAINST PROPERTY / MORTGAGE LOAN 

Loan Against Property/ Mortgage Loan Details 

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.

Benefits of Loan Against Property 

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.

Fee and Charges of Loan Against Property 

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

Eligibility Criteria for Loan against Property

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

Documents Required for Loan Against Property 

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..

1. Filled Application Form

2. PAN Card

3. Proof of Identity : Passport, Aadhaar Card, Driving License, Voter ID, Government Employee ID

4. Proof of Address : Aadhaar Card, Driving License, Voter ID, Government Employee ID, Electricity bill, Gas bill, Telephone bill, Property tax receipt

5. Date of Birth Proof : Passport, Driving License, PAN Card, Birth Certificate, Aadhaar Card with DOB, SSC Marksheet

6. Signature Proof : Passport, PAN Card, Bankers verification or Notarized affidavit with ID & Address Proof)

  1. Proof of Income for Salaried:

    1. 3 months’ pay slip or 6 months’ pay slip/2 yrs. bonus proof)

    2. 6 months bank statement showing salary credits

    3. 2 yrs. Form 16 or Employment Continuity Proof

  2. Proof of Income for Salaried NRIs:

    1. 3 month pay slip

    2. Appointment letter/contract letter

    3. Continuous Discharge Certificate for Shipping cases

    4. 6 month Domestic NRE/NRO a/c statement

    5. 6 month international salary a/c statement

    6. Overseas credit report

    7. Valid visa copy/OCI card

    8. Passport copy

    9. POA details

  3. Proof of Income for Self Employed:

    1. 2 yrs ITR, Computation of Income, P&L, Balance sheet with CA seal and sign

    2. For Asha HL – 1 yr ITR, Computation of Income, P&L, Balance sheet with CA seal and sign

    3. Tax Audit Report (If Gross Turnover Exceeds Rs 1 Cr or Gross Receipts Exceeds 25 Lac)

    4. 6 months bank statements of personal and business accounts

    5. If ITR is filed without digital sign – CPC and tax paid challan

    6. Business continuity proof (3 yrs for HL / 5 yrs for LAP)

  4. Other Important Documents & Checks:

    1. Aadhaar card is mandatory for Credit Linked Subsidy Scheme (PMAY) applicants

    2. PAN card is mandatory for all financial applicants

    3. Processing Fee and CERSEI cheques

    4. Self-attestation of borrowers on all documents submitted

Compare other bank loan against property interest rate 

BANKS

INTEREST RATE 

AXIS Bank Loan Against Property

Starts at 11.25% 

AXIS Bank Lease Rental Discounting 

Starts at 11% 

AXIS Bank Overdraft Facility Against Property

Starts at 11%

AXIS Bank Reverse Mortgage Loan

Starts at 11%

SBI Bank Loan Against Property

Starts at 10.85%

YES Bank Loan Against Property 

Starts at 10.50%

IDBI Bank Loan Against Property

Starts at 11.25%

RBL Bank Loan Against Property 

10.65% to 16.25%

HSBC Bank Loan Against Property 

Starts at 8.60%

HSBC Bank Smart Loan Against Property 

Starts at 8.75%

Indusind Bank Loan Against Property 

9.50% to 13.50%

How to Get a Loan Against Property (LAP)

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.

How to Apply for Loan Against Property 

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 

How to calculate EMI of 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

Financials products offered by Bank 

BUSINESS LOAN

CAR LOAN

COMMERCIAL LOAN 

EDUCATION LOAN

GOLD LOAN

HOLIDAY LOAN 

HOME LOAN 

LOAN AGAINST PROPERTIES 

LOAN AGAINST SECURITIES

PERSONAL LOAN

PROFESSIONAL LOAN

TWO WHEELER LOAN

Loan Against Property Frequently Asked Questions 

1. How to apply for loan against property?

You can apply online or offline by visiting the nearest bank branch with documents for loan against property.

2. Which formula is used to calculate EMI of 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

3. What is the age of the customer required to apply for loan against property?

At the time of taking the loan, minimum age requirements are 23 years and maximum of 70 years to apply for loan against property.

4. How much processing fee is provided in loan against property?

1% to 2% of the loan amount processing fee is provided in loan against property.

5. What is a 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.

6. Is there any prepayment and foreclosure charges are applied in loan against property?

There is no prepayment penalty and foreclosure charges are applied in loan against property.

Last Updated on : 30/Aug/2020

Know More About

Loans Against Properties

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

Loans Against Properties Interest Rates

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

Loan Amount

|
1L
|
50L
|
100L
|
150L
|
2Cr

Interest Rate

%
|
5
|
10
|
12.5
|
17.5

Loan Tenure

|
1
|
10
|
20
|
25
|
0
|
120
|
240
|
300


Your Monthly Loan EMI


₹24,959