Loan against Property Interest Rates

Loan against property is a secured loan which is easily available to all the individuals whether self-employed or salaried, just by mortgaging their property in the name of bank or NBFC. The purpose of taking the loan can be personal needs like acquiring assets, marriage, urgent medical needs, expanding business, education, etc. You can the best loan against property interest in India at loanbaba.com. We allow you to compare rate of interest for loan against property across banks and NBFCs so that you can make an informed choice.

One can avail the loan by just mortgaging individual, commercial, residential or industrial property in the name of bank. The declaration regarding the end use of funds thus obtained needs to be made in the application form itself. Some of the offers you can check are SBI loan against property interest rates, HDFC loan against property interest rate, and rates from other leading financial institutes.

Particulars of Interest Rate Loan against Property

Interest Rate and Other Charges Applicable

Interest Rate

9.75% onwards

Type of Interest Rate

Fixed and floating rate

Processing Fees

1% to 2% of the loan amount

Loan Amount

Rs. 1 lakh to Rs. 5 crores

Loan Tenure

1 year to 15 years

Preferable Credit Score

650 and above

Loan against Property Interest Rates from Top Indian Banks

Following are the interest rate in loan against property by leading banks and NBFCs in India.

Factors Affecting Property Loan Interest Rates

When it comes to property loan, the rates are affected by many factors such as borrower’s profile, income, property age, property value, repayment capacity of the borrower etc. However, the rates are highly influenced by property types. You can compare lowest bank loan against property interest rates on our website based on the property type.

Interest rates and charges by property type
  • Industrial Property
  • Interest rate: 10.55% to 14.20%.
  • Loan to value: 40 to 65%.
  • Processing fees: 0.20% to 2.02%.
  • FOIR: 0.65.
  • CIBIL Score: 650 and above.
  • Income proofs for salaried class: Pay-slip of previous 6 months, ITR of last two years, form 16 of previous two years and bank account statement of past 6 months.
  • Income proofs for self-employed individuals: VAT/ GST/ Service Tax registration certificate, partnership deed, ITR for previous 3 years, address proof of business, financial statements audited by CA and proof of existence of business.
  • Commercial Property
  • Interest rate: 9.25% to 16.25%.
  • Loan to value: 40 to 75%.
  • Processing fees: 0.20% to 2.21%.
  • FOIR: 0.65.
  • CIBIL Score: 650 and above.
  • Income proofs for salaried class: Pay-slip of previous 6 months, ITR of last two years, form 16 of previous two years and bank account statement of past 6 months.
  • Income proofs for self-employed individuals: VAT/ GST/ Service Tax registration certificate, partnership deed, ITR for previous 3 years, address proof of business, financial statements audited by CA and proof of existence of business.
  • Residential Property
  • Interest rate: 9.25% to 16.25%.
  • Loan to value: 40 to 75%.
  • Processing fees: 0.20% to 2.21%.
  • FOIR: 0.65.
  • CIBIL Score: 650 and above.
  • Income proofs for salaried class: Pay-slip of previous 6 months, ITR of last two years, form 16 of previous two years and bank account statement of past 6 months.
  • Income proofs for self-employed individuals: VAT/ GST/ Service Tax registration certificate, partnership deed, ITR for previous 3 years, address proof of business, financial statements audited by CA and proof of existence of business.
Types of Interest Rates for Property Loan

If you have a property which can be mortgaged and you wish to avail a loan against property, you can go for checking out various mortgage loan offers of various banks. As a borrower you may wonder how to get lowest interest rate for loan against property. The answer lies in comparing the interest rate types and the resultant loan cost. You can compare loan against property interest rates by types at loanbaba. The main aspects of interest rate which need to be verified are mentioned below:

  • Fixed versus floating rate of interest: While comparison of the two, it can be concluded that the fixed rates are a bit higher than the floating ones as they remain unchanged/ stable/ constant during the entire tenure of loan against property. On the other hand, floating rates are subject to change/ reset periodically as a consequence of change in PLR and MCLR of banks and other NBFCs. Majority of loans against property in India are under floating category as the interest rate can be seen reducing. Keep a look out for loan against property interest rates in India at our website.
  • Evaluation in terms of overdraft facility: This facility enables you to deposit excess amount in the loan overdraft account whenever available, thus reducing the interest liability and shortening the tenure of loan. This facility is recommended mostly to businessmen and self-employed personnel who have varied incomes and have excess cash with them every time. The rate of interest in case of overdraft is generally a little higher than in regular case as it offers flexibility to the borrower. At loanbaba, you can check for bank loan against property interest rates on overdraft facility.
How to Get Better Interest Rates on Property Loans?

You can compare loan against property interest rates in India to understand, which is the most suitable for your needs. Here are some of the factors that will help you get better rates on property loan.

  • Offer Based on Loan Amount: It is surprising to know that rate of interest is sometimes lower on higher amounts and vice versa due to existence of various price baskets of the bank. Similarly, the bank offers various discounts from time to time which can be a win-win situation if you apply at that time.
  • As Per Tenure Discount: It is quite likely that you are being offered a specific discount if you avail loan against property for a certain tenure. You need to check out for such offers.
  • Staying Away from Marketing Gimmicks: It is seen that marketing agents and direct selling agents quote lower interest rate for loan against property, however the actual rate of interest is higher. You should always consult authorized representatives and get the rate in writing before processing the loan.
Loan against Property Interest Rates Tips

Below mentioned are two important points to consider about loan against property bank interest rates:

  • Applying with Multiple Banks: Applying for a loan against property with multiple banks can lead to lower your CIBIL score as every time you apply with a bank, it is recorded in your credit history and hence may prove bad as far as your score is concerned. A lower CIBIL score may mean higher rate of interest at some times.
  • Applying for an Amount Higher than Your Eligibility: You can use an online loan calculator to determine your eligibility for loan against property and should apply for an amount lesser than your eligibility. Applying for a loan amount more than your eligibility may result in rejection of your loan application and even if you get the loan, it will be on a higher rate of interest. However, if you apply for a suitable loan amount and match the eligibility criteria, you can even get lowest loan against property interest rate in India.
Frequently Asked Questions about Loan against Property Interest Rate

Below given are FAQs for property loan in India:

  • add1. Does the loan against property affect the rate of interest?

    The tenure of the loan can decide the final amount you have to pay on the loan and not necessarily the rate of interest. However, the bank may sometimes lower the rate for a longer tenure and vice-versa depending on the loan scheme, amount, and other conditions.

  • add2. Can I add collateral on property loan to lower the interest rate?

    Loan against property itself is a secured loan, given the bank retains the property documents as collateral. You may not be able to add other collateral to secure lower rate of interest. However, you can negotiate for to get the right rate with increasing your repayment capacity or credit score.

  • add3. Which is the right method to compare rates for property loan?

    The accurate way of comparing rates on loan against property is by understanding which of type of rate and calculation is involved. Sometimes a lower rate may not mean the best offer. You need to consider other charges involved to get a final understanding of the best rates on the loan.

  • add4. How is the interest rate calculated for property loan?

    The rate of interest is generally calculated on daily reducing balance. The equated monthly instalment or monthly outgo is then lower as against the interest rate on annual reducing balance.

  • add5. Does the age of property affect the rate of interest?

    Yes, the property’s age may affect the rate of interest. In case of older property, the rate may be high, and vice-versa. However, if the property is eminent, and has a scope of deriving good income or value on selling, the rates may be lower in such cases.

How to Apply for a Loan against Property?

Applying for loan against property at Loanbaba.com is simple, just follow the below mentioned steps.

Step 1: Apply for property loan at: https://www.loanbaba.com/loan-against-property

The application is sent electronically to Loanbaba team. The customer service representative gets in touch with the applicant directly.

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