What is Loan against Property or Property Loan?
A loan on property, loan against property (LAP) or property loan is provided by financial institutions. It is a secured loan, wherein the bank or NBFC will retain the property papers as security until the loan is repaid. You can apply for home loan against property (this is loan against your residential property) or loan against industrial or commercial property. Also known as mortgage loan, the funds are disbursed on either fixed or floating rate of interest (starting at 9.75%) and you can get up to 60% to 70% of the property value, judged at current market value.
The property on which the funds are taken is mortgaged with the NBFC or bank. You can however continue using the property for relevant purposes. At loanbaba.com, you can apply for loan against property online at best interest rates and receive speedy disbursal of funds to your bank account.
Why Choose a Loan against Property?
Property loan is preferred form of loan in India because it’s easily availability. Banks and NBFC (non-banking financial company) are prepared to provide the funds because it is a secured loan. It is cost effective and provides maximum loan amount. As personal loan against property can be attained by both salaried and self-employed, it is known as a convenient way of securing funds on a flexible tenure. There are choices in repayment as well, making repayments a comfortable affair.
Mortgage loan against property is used for several purposes, and some of its end-used is as follows:
To purchase another property
Funds for travel, vacations, big-ticket purchases
For higher studies
Points to Consider Before Applying for a Loan against Property
Below mentioned are some factors to keep in before you put ahead the loan against property application:
As per the terms and conditions of financial institutions, certain real estate properties could be excluded from providing a loan on.
The property in question on which the loan is applied for, must be owned at least partly by you, if not completely.
A credit score of 700+ is considered favourable to sanction the property loan. Some financial institutions may even lend to those with lower credit score but only if other eligibility factors are fulfilled. Check for the CIBIL score on our website.
Some of the basic documents you will require are PAN Card, residence proof, Aadhar Card, Voter Id, Passport, identity proof, employment proof, income proof, documents related to the property etc.
The property must be located in India and not abroad.
The property should not be in disputed as such properties cannot be accepted for loan and your loan application will be rejected.
Consent of co-owners is necessary for processing of the loan. Co-owners become co-applicant of the loan.
Make sure the property is not disputed. Such properties will not be accepted as collateral and the
Features and Benefits of Loan against Property
Some of the benefits and features of property loan in India are mentioned below:
Property loans are long-term loans. You can repay the loan between 1 year and 15 years.
The loan against property interest rates differs case by case depending on the property type and other factors as laid out by the bank or NBFC.
The loan can be sanctioned on both residential and commercial properties. Private finance loan against property is available at our website. The process is quick and hassle-free.
The amount of loan is between Rs. 1 lakh and Rs. 5 crores starting at interest rate of 9.75%.
You may use the funds for debt consolidation or any other financial purposes.
Know all the charges involved, such as processing fee, administrative charges, late payment fees etc. You can understand all the applicable charges on our website before continuing with the loan application.
Categories and Types of Loan against Property
Type of Loan against Property
Features of Property Loan
1) Loan against residential property
· The property should be in use for residential purpose such as a piece of land or house,
· Agricultural land may not be considered for the loan.
· The property must not have an ongoing loan.
2) Loan against commercial property
· The property should be used for business purpose, industrial or commercial activity.
· The title of the property must be clear. No legal disputes should exist.
· Some commercial properties could be excluded.
3) Loan against industrial property
· The property must be used for business activity or industrial purpose.
· It cannot serve partly for any purposes than those specified.
· The interest rate could be fixed initially and turn to floating. Keep a track of loan against property rates at our website.
Eligibility Criteria for Property Loan
The loan against property eligibility criteria can differ from one financial institute to other, and vary for businessmen, professionals, and salaried individuals. Below mentioned are basic eligibility criteria for loan against property.
To avail mortgage loan, you must be of at least 21 years of age and of Indian national.
You must meet the requirement as stated by the bank or NBFC for monthly income/salary, and show good repayment ability.
A good credit score and history will help you secure the loan fasted at lowest interest rate.
If salaried, you should be employed with the current employer for a certain amount of years.
Documents Required to Apply for Loan against Property
The documents needed for property loan differ as per the applicant’s financial profile: salaried, self-employed, or businessperson.
For salaried individuals:
Form-16 provided by the current employer
Past 3 months salary slips
Identity proof such as Passport, Voter ID Card, Aadhar Card
Proof of residence
Salary slips for past 3 months
Salary account’ bank statement for the last 6 months
A cheque for processing cost/administrative cost applicable by the bank/NBFC.
For Self-employed Businesspersons:
Identity and residence proof
Educational qualification diplomas, certificates, degrees, and academic credentials
Bank statements of last 6 months
Past 3 years Income Tax Returns
For Self-employed Professionals:
Identity proof and address proof
Certificates proving your qualification credentials related to academics
Balance sheet and profit and loss statement of the company of the last 3 years
Existence proof of business and its profile details
Bank statement of last 6 months
Company’s acknowledged Income Tax Returns and statements of past 3 years
Licensing and registration certificate on the profession
Loan against Property Interest Rates in India
The loan against property rates is low as compared to unsecured loans. The banks or NBFCs will retain the documents of the property as security until you repay the loan. As the financial institute perceives secured loan as that of reduced risk the interest rates of property loan is low and almost like the base rate. At loanbaba, the borrowing rate for loan on property starts from 9.75%. However, the interest rate could be either fixed or floating.
Checklist to Apply for Loan against Property
Here is a complete checklist to remember, before you apply online for loan against property on our website:
All the property documents and proof of identity, and other employment and personal documents should be in place. The property should not carry any active legal issues.
You can compare property loan offers on loanbaba.com regarding interest rates, loan amount, fees, and other details.
You should not have too many ongoing loans and liabilities.
- CIBIL score and report for free on our website.
You need a decent credit score to get the loan. Now you can check your
Check your loan against property eligibility and EMI by using our free to use financial tools.
There are chances that you get lower interest rate with the chosen bank or NBFC if you are an existing customer or share a good relationship with the institute.
Top Providers for Loan against Property India
Today most of the private and public sector banks and NBFCs offer property loan to people in India. Some of the major providers are LIC HFL, State Bank of India, Deutsche Bank, HDFC Bank, Axis Bank, PNB Housing Finance, ICICI Bank, etc. You can get mortgage loan online from these providers or others on applying for the loan on our website.
Loan against Property EMI Calculator
You can calculate EMI (equated monthly instalment) on your loan against property in two ways:
- Use the formula for manual calculation: EMI = [P x R (1+R) N]/ [(1+R) N-1]
- Or you can let loanbaba calculate the amount for you within seconds. This is a free-to-use and dynamic EMI calculator that tells the exact equated monthly instalment you have to pay. The calculator takes into consideration details such as interest rate, loan amount, tenure of loan, etc.
Why Choose Loanbaba.com to Help You Find Property Loan?
At loanbaba.com, you will be benefited with unbiased comparison of loan against property over different NBFCs and banks. We offer you loan against property eligibility calculator and property loan EMI calculator free-of-cost. These calculators provide accurate results. Refer below some important features that will help you understand why to choose us to find the best loan against property schemes in India.
Get quick loan quotes from financial institutions about property loan all within a few seconds.
You can understand the rules of loan against property concerning documents, eligibility, fees, charges, interest rate on one window itself.
Do not visit any bank or NBFC or even our office. You can complete the loan application online in less than 2 minutes. We offer your customized quotes based on your needs.
It is possible to compare loan against property offers, and select, apply with financial institutions, and have the loan approved and disbursed in short-time. Get suitable loan against property online offer suited to your requirements.
Frequently Asked Questions about Loan against Property in India
Following are important FAQs for loan against property.
Property loan can be given on real estate properties which are used for residential, industrial, or commercial purpose. Loan on a vacant land is generally not provided, however, some financial institutes may offer funding against empty piece of land. Do remember that loan against property for industrial, commercial and residential purpose does not include agricultural lands. Property loan for agricultural land come under special schemes and offered by specific banks and NBFCs only.
You can get up to 60 percent to 70 percent of the property’s value as loan. However, some banks and NBFCs limit the amount to Rs. 5 crores. But, the amount of loan will vary as per your credit score and income profile, and other factors. The age of the property and your age and employment history will have a say on the loan amount. Your existing liabilities will also come into question.
Salaried individuals, businesspersons, self-employed professionals can apply for loan against property online. The loan is secured in nature and will not ask for any other asset than the property papers. If you find it difficult to attain the loan, you can try and add co-applicants and guarantors.
It is important that you have all the documents in place related to your property, personal profile as well as the finances. In case you do not have documented financial such as IT returns, then you may disqualify for the loan. However, since the loan is secured and you have a good repayment capacity, certain banks and NBFCs (not all), may go easy on the documents needed.
If the property is owned by many owners, and you apply for the loan against property, then all the owners become co-applicant. However, it is not necessary to have a co-applicant for the property loan. You and your spouse can co-apply for the loan. You may want to add a co-applicant to increase your eligibility for the loan, if the co-applicant can help better the financial profile needed to secure the loan.
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