Loan Against Property (LAP) or mortgage loan is a secured loan, wherein the property papers are kept as collateral with the fund-provider. The property papers are returned to the borrower, once the loan is successfully repaid. You can apply for a loan against a residential, commercial, and an industrial property.
Some of the common uses of a Loan Against Property are given below:
On loanbaba.com, you can get more information about why you should choose a property loan and its key features and benefits. You can also learn about the different options available and what is needed in order to apply for the loan. You can avail the loan on this website from the top banks and NBFCs in India.
Below are some of the features of a property loan/loan against property:
Below are factors that you should keep in mind before applying for loan against property:
|Type of Loan against Property||Loan to Value Ratio|
|1) Loan against residential property||60% to 75%|
|2) Loan against commercial property||60% to 70%|
|3) Loan against industrial property||50% to 55%|
|Interest Rate||9.00% onwards|
|Processing Fee||Up to 2% of the loan amount|
|Loan Tenure||Up to 15 years|
|Prepayment Charges||No charges|
As the financial institute perceives secured loan as that of reduced risk the interest rates of property loans are low and almost like the base rates. In India, the borrowing rate for loan on property starts from 9.00%. The interest rate could be either fixed or floating. The loan against property interest rates will differ from one bank/lender/NBFC to the other on grounds of your profile, income, need of loan amount, loan tenure, credit score and history, and other factors.
Some of the eligibility factors are mentioned below:
You can refer the Eligibility calculator below and find out how much amount can you borrow:
The documents needed for property loan differ as per the applicant’s financial profile: salaried, self-employed, or businessperson.
Property Related Documents
Other documents required are as follows:
For Salaried Individuals:
For Self-employed Businesspersons:
For Self-employed Professionals:
Here is a complete checklist to remember, before you apply online for a loan against property on our website:
Today most of the private and public sector banks and NBFCs offer property loan to people in India. Some of the major providers are:
You can use our FREE loan against property EMI calculator before applying for a mortgage loan in India. With EMI calculator property loan, you can get the following details:
On Loanbaba, you will be benefited with unbiased comparison of loan against property schemes over different NBFCs and banks. Refer below some important features that will help you understand why to choose us to find the best loan against property schemes 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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