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Retirement
1st Crore
Trusted by 1L+ Indians
Want to Achieve any of the below Goals upto 80% faster?
Dream Home
Dream Wedding
Dream Car
Retirement
1st Crore
Dream Home
Dream Wedding
Dream Car
Retirement
1st Crore
Trusted by 3 Crore+ Indians
Want to Achieve any of the below
Goals upto 80% faster?
Dream Home
Dream Wedding
Dream Car
Retirement
1st Crore
Trusted by 3 Crore+ Indians
Want to Achieve any of the below
Goals upto 80% faster?
Dream Home
Dream Wedding
Dream Car
Retirement
1st Crore
Trusted by 3 Crore+ Indians
Want to Achieve any of the below Goals upto 80% faster?
Dream Home
Dream Wedding
Dream Car
Retirement
1st Crore
Trusted by 3 Crore+ Indians
Want to Achieve any of the below Goals upto 80% faster?
Dream Home
Dream Wedding
Dream Car
Retirement
1st Crore
Loan Against Property (LAP): Everything You Need to Know
Loan Against Property (LAP): Everything You Need to Know
Loan against Property (LAP), also referred to as a mortgage loan, is a versatile financing option that allows consumers to raise funds by leveraging their residential, commercial, or industrial properties. Unlike unsecured personal loans, a loan against property offers several distinct advantages, making it a popular choice for both personal and business financial needs, excluding speculative purposes. Banks and Housing Finance Companies (HFCs) typically offer LAP for tenures of up to 20 years. The loan amount for LAP can be as high as 75% of the property’s market value, depending on the lender and the borrower's credit profile. Additionally, many lenders provide Lease Rental Discounting (LRD), enabling consumers to avail loans by pledging the rental receipts of their tenants.
Features & Benefits of Loan Against Property
1. Lower Interest Rates
One of the significant benefits of LAP is the lower interest rates. The secured nature of the loan reduces the lending risk for banks and Non-Banking Financial Companies (NBFCs), allowing them to offer competitive interest rates compared to unsecured loans.
2. No End-Use Restrictions
The loan proceeds from a LAP can be utilized for various purposes, including consolidating high-interest debts, funding wedding expenses, business expansion, or any other personal or business-related financial need.
3. Longer Loan Tenure
LAP offers longer loan tenures, up to 20 years, making EMIs more affordable. The extended repayment period helps in reducing the monthly repayment burden, allowing borrowers to manage their finances more efficiently.
4. Higher Loan Amount
Lenders usually finance up to 70% of the property value, resulting in higher loan amounts. This higher loan quantum makes LAP an attractive option for significant financial requirements.
5. Higher Chances of Loan Approval
Since the loan is backed by property as collateral, the lending risk for banks and NBFCs is reduced, increasing the chances of loan approval for borrowers. This is particularly beneficial for individuals who might face difficulties obtaining unsecured loans due to lower credit scores.
6. Overdraft Facility
Borrowers can also avail of an overdraft facility on their LAP, providing them with higher liquidity at a lower interest cost. This facility is beneficial for managing short-term financial requirements.
Loan Against Property Interest Rates Offered by Top Banks & HFCs
Interest rates for LAP vary among different banks and HFCs. Here is a summary of the interest rates and processing fees from some of the top lenders:
Bank of India: 10.10%-12.60% (Processing Fee: Up to 1% of loan amount, Rs 5,000 - Rs 50,000)
Bank of Baroda: 10.85% - 18.60% (Processing Fee: Up to 1%, Rs 8,500 upfront - Rs 75,000)
Bank of Maharashtra: 10.45% - 11.95% (Processing Fee: 1% of loan amount)
Federal Bank: 12.60% onwards (Processing Fee: 1% of the limit sanctioned, minimum Rs 3,000)
HDFC Bank Limited: 9.50% - 11.00% (Processing Fee: Up to 1% of loan amount, minimum Rs 75,000)
ICICI Bank: 10.85% - 12.50% (Processing Fee: Up to 1% of loan amount)
IDFC First Bank: 9.00% - 16.50% (Processing Fee: Up to 3% of loan amount)
Indian Bank: 10.00% - 12.75% (Processing Fee: 1% of loan amount)
Indiabulls Housing Finance: 9.75% onwards (Processing Fee: 1% onwards)
Kotak Mahindra Bank: 9.50% onwards (Processing Fee: Up to 1% of loan amount)
L&T Housing Finance: 9.50% onwards (Processing Fee: Up to 2% of loan amount)
LIC Housing Finance: 9.50% - 11.55% (Processing Fee: Up to 1% of loan amount)
PNB Housing Finance: 10.40% - 12.75% (Processing Fee: 0.75% of loan amount, max. Rs 1 lakh)
State Bank of India: 10.00% - 11.30% (Processing Fee: Flat Rs 10,000)
Tata Capital: 9.00% onwards (Processing Fee: Up to 1.25% of loan amount)
Union Bank of India: 10.45% - 13.10% (Processing Fee: Up to 1% of loan amount, min. Rs 5,000 & max. Rs 1 lakh)
UCO Bank: 10.85% - 12.00% (Processing Fee: 0.50% of loan amount, up to Rs 2 lakh)
*Note: Interest rates are as of 24 June 2024 and may vary.
Eligibility Criteria for Loan Against Property
The eligibility criteria for LAP can differ across lenders. However, some general conditions must be met:
Residential Status: Resident Indian and Non-resident Indian (NRI)
Minimum Age Limit: 18 years
Maximum Age Limit: 70 years
Employment Type: Salaried, Self-employed Professional, and Self-employed Non-Professional
Minimum Salary: At least Rs. 12,000 per month
Net Annual Income: At least Rs. 1.5 lakh per annum
Work Experience: At least 1 year in the current organization
Loan-to-Value (LTV) Ratio: Up to 75% of the property value
Credit Score: Preferably 750 and above
Property Type: Residential, Commercial, and Industrial properties are eligible to be pledged as collateral. The age and condition of the property will also be considered.
Loan Against Property EMI Calculator
Before applying for a mortgage loan, it's crucial to know how much EMI you can afford on a specific loan amount, interest rate, and tenure. Paisabazaar’s Loan Against Property EMI Calculator provides accurate results instantly. It also displays the total interest payable, total principal payable, and amortization schedule, helping you understand your loan repayment better.
Documents Required to Apply for Loan Against Property
To apply for a LAP, you will need to provide the following documents:
Proof of Identity
Passport
Voter ID Card
Driving License
PAN Card
Proof of Residence
Ration card
Telephone Bill
Electricity Bill
Rental Agreement
Passport
Bank Passbook or Statement
Driving License
Proof of Age
PAN Card
Passport
Any other certificate from a statutory authority
Proof of Income for Salaried Individuals
Form 16
Latest Payslips
Income Tax Returns (ITR) of the past 3 years
Investment proofs (if any)
Proof of Income for Self-Employed Individuals
Details of ITR of the last 3 years
Balance Sheet and Profit & Loss Account Statement of the Company/Firm
Business License Details
Proof of Business Address
Property-related Documents
Title Deeds, including the previous chain of the property documents
Nil Encumbrance Certificate on the concerned property
Approved plan (if applicable)
*For a complete list of documents required for a loan against property, please refer to the specific lender's requirements.
Loan Against Property Processing Fees & Other Charges
Here are some of the general fees and charges that may be applicable to your mortgage loan:
Processing Fees: 1% - 2% of the loan amount
Part Prepayment Charges: Floating Rate: Nil; Fixed Rate: Up to 4% on the outstanding principal
Foreclosure Charges: Floating Rate: Nil; Fixed Rate: Up to 2% on the outstanding principal
Penal Interest: Usually at 24% per annum (2% per month on the overdue installment/s)
How to Apply for Loan Against Property at Paisabazaar.com?
Applying for a LAP through Paisabazaar.com is a straightforward process. Here are the steps:
Provide Basic Details: Enter your mobile number, loan amount, property location, employment type, and other relevant information.
Compare and Apply: Review the list of offers and choose the one that best suits your needs.
Wait for Contact: Loan experts from Paisabazaar will get in touch with you to guide you through the next steps.
Conclusion
A Loan Against Property (LAP) is a powerful financial tool that can help you unlock the value of your property to meet significant financial needs. With benefits such as lower interest rates, longer loan tenure, and higher loan amounts, LAPs are ideal for both personal and business purposes. Understanding the eligibility criteria, required documents, and fees involved is crucial for a smooth loan application process.
Using the EMI calculator before applying for the loan can help you plan your finances better and ensure you are well-prepared for the repayment journey. Whether you are consolidating debt, expanding your business, or funding personal expenses, a LAP can provide the financial flexibility you need.
Loan against Property (LAP), also referred to as a mortgage loan, is a versatile financing option that allows consumers to raise funds by leveraging their residential, commercial, or industrial properties. Unlike unsecured personal loans, a loan against property offers several distinct advantages, making it a popular choice for both personal and business financial needs, excluding speculative purposes. Banks and Housing Finance Companies (HFCs) typically offer LAP for tenures of up to 20 years. The loan amount for LAP can be as high as 75% of the property’s market value, depending on the lender and the borrower's credit profile. Additionally, many lenders provide Lease Rental Discounting (LRD), enabling consumers to avail loans by pledging the rental receipts of their tenants.
Features & Benefits of Loan Against Property
1. Lower Interest Rates
One of the significant benefits of LAP is the lower interest rates. The secured nature of the loan reduces the lending risk for banks and Non-Banking Financial Companies (NBFCs), allowing them to offer competitive interest rates compared to unsecured loans.
2. No End-Use Restrictions
The loan proceeds from a LAP can be utilized for various purposes, including consolidating high-interest debts, funding wedding expenses, business expansion, or any other personal or business-related financial need.
3. Longer Loan Tenure
LAP offers longer loan tenures, up to 20 years, making EMIs more affordable. The extended repayment period helps in reducing the monthly repayment burden, allowing borrowers to manage their finances more efficiently.
4. Higher Loan Amount
Lenders usually finance up to 70% of the property value, resulting in higher loan amounts. This higher loan quantum makes LAP an attractive option for significant financial requirements.
5. Higher Chances of Loan Approval
Since the loan is backed by property as collateral, the lending risk for banks and NBFCs is reduced, increasing the chances of loan approval for borrowers. This is particularly beneficial for individuals who might face difficulties obtaining unsecured loans due to lower credit scores.
6. Overdraft Facility
Borrowers can also avail of an overdraft facility on their LAP, providing them with higher liquidity at a lower interest cost. This facility is beneficial for managing short-term financial requirements.
Loan Against Property Interest Rates Offered by Top Banks & HFCs
Interest rates for LAP vary among different banks and HFCs. Here is a summary of the interest rates and processing fees from some of the top lenders:
Bank of India: 10.10%-12.60% (Processing Fee: Up to 1% of loan amount, Rs 5,000 - Rs 50,000)
Bank of Baroda: 10.85% - 18.60% (Processing Fee: Up to 1%, Rs 8,500 upfront - Rs 75,000)
Bank of Maharashtra: 10.45% - 11.95% (Processing Fee: 1% of loan amount)
Federal Bank: 12.60% onwards (Processing Fee: 1% of the limit sanctioned, minimum Rs 3,000)
HDFC Bank Limited: 9.50% - 11.00% (Processing Fee: Up to 1% of loan amount, minimum Rs 75,000)
ICICI Bank: 10.85% - 12.50% (Processing Fee: Up to 1% of loan amount)
IDFC First Bank: 9.00% - 16.50% (Processing Fee: Up to 3% of loan amount)
Indian Bank: 10.00% - 12.75% (Processing Fee: 1% of loan amount)
Indiabulls Housing Finance: 9.75% onwards (Processing Fee: 1% onwards)
Kotak Mahindra Bank: 9.50% onwards (Processing Fee: Up to 1% of loan amount)
L&T Housing Finance: 9.50% onwards (Processing Fee: Up to 2% of loan amount)
LIC Housing Finance: 9.50% - 11.55% (Processing Fee: Up to 1% of loan amount)
PNB Housing Finance: 10.40% - 12.75% (Processing Fee: 0.75% of loan amount, max. Rs 1 lakh)
State Bank of India: 10.00% - 11.30% (Processing Fee: Flat Rs 10,000)
Tata Capital: 9.00% onwards (Processing Fee: Up to 1.25% of loan amount)
Union Bank of India: 10.45% - 13.10% (Processing Fee: Up to 1% of loan amount, min. Rs 5,000 & max. Rs 1 lakh)
UCO Bank: 10.85% - 12.00% (Processing Fee: 0.50% of loan amount, up to Rs 2 lakh)
*Note: Interest rates are as of 24 June 2024 and may vary.
Eligibility Criteria for Loan Against Property
The eligibility criteria for LAP can differ across lenders. However, some general conditions must be met:
Residential Status: Resident Indian and Non-resident Indian (NRI)
Minimum Age Limit: 18 years
Maximum Age Limit: 70 years
Employment Type: Salaried, Self-employed Professional, and Self-employed Non-Professional
Minimum Salary: At least Rs. 12,000 per month
Net Annual Income: At least Rs. 1.5 lakh per annum
Work Experience: At least 1 year in the current organization
Loan-to-Value (LTV) Ratio: Up to 75% of the property value
Credit Score: Preferably 750 and above
Property Type: Residential, Commercial, and Industrial properties are eligible to be pledged as collateral. The age and condition of the property will also be considered.
Loan Against Property EMI Calculator
Before applying for a mortgage loan, it's crucial to know how much EMI you can afford on a specific loan amount, interest rate, and tenure. Paisabazaar’s Loan Against Property EMI Calculator provides accurate results instantly. It also displays the total interest payable, total principal payable, and amortization schedule, helping you understand your loan repayment better.
Documents Required to Apply for Loan Against Property
To apply for a LAP, you will need to provide the following documents:
Proof of Identity
Passport
Voter ID Card
Driving License
PAN Card
Proof of Residence
Ration card
Telephone Bill
Electricity Bill
Rental Agreement
Passport
Bank Passbook or Statement
Driving License
Proof of Age
PAN Card
Passport
Any other certificate from a statutory authority
Proof of Income for Salaried Individuals
Form 16
Latest Payslips
Income Tax Returns (ITR) of the past 3 years
Investment proofs (if any)
Proof of Income for Self-Employed Individuals
Details of ITR of the last 3 years
Balance Sheet and Profit & Loss Account Statement of the Company/Firm
Business License Details
Proof of Business Address
Property-related Documents
Title Deeds, including the previous chain of the property documents
Nil Encumbrance Certificate on the concerned property
Approved plan (if applicable)
*For a complete list of documents required for a loan against property, please refer to the specific lender's requirements.
Loan Against Property Processing Fees & Other Charges
Here are some of the general fees and charges that may be applicable to your mortgage loan:
Processing Fees: 1% - 2% of the loan amount
Part Prepayment Charges: Floating Rate: Nil; Fixed Rate: Up to 4% on the outstanding principal
Foreclosure Charges: Floating Rate: Nil; Fixed Rate: Up to 2% on the outstanding principal
Penal Interest: Usually at 24% per annum (2% per month on the overdue installment/s)
How to Apply for Loan Against Property at Paisabazaar.com?
Applying for a LAP through Paisabazaar.com is a straightforward process. Here are the steps:
Provide Basic Details: Enter your mobile number, loan amount, property location, employment type, and other relevant information.
Compare and Apply: Review the list of offers and choose the one that best suits your needs.
Wait for Contact: Loan experts from Paisabazaar will get in touch with you to guide you through the next steps.
Conclusion
A Loan Against Property (LAP) is a powerful financial tool that can help you unlock the value of your property to meet significant financial needs. With benefits such as lower interest rates, longer loan tenure, and higher loan amounts, LAPs are ideal for both personal and business purposes. Understanding the eligibility criteria, required documents, and fees involved is crucial for a smooth loan application process.
Using the EMI calculator before applying for the loan can help you plan your finances better and ensure you are well-prepared for the repayment journey. Whether you are consolidating debt, expanding your business, or funding personal expenses, a LAP can provide the financial flexibility you need.
Author
Pluto Team
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