Loan Against Property

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A Loan Against Property (LAP) is a secured personal loan that allows you to borrow a substantial sum of money by pledging your property as collateral. This type of loan is also referred to as a mortgage loan.

Loan Against Property interest rates typically range from 8.50% to 18% per year. You can borrow up to ₹25 crore for a term of up to 20 years.

Loan against Property Details

Interest Rate	8.50% p.a. to 18% p.a.
Loan Amount	Up to Rs.25 crore
Loan Tenure	Up to 20 years
Processing Fee	1% – 3% of the loan amount + GST

Loan Against Property Schemes- Interest rates, Loan amount and Tenures by Top Banks

Bank	Interest Rate	Loan Amount
State Bank of India	10.60% p.a. – 11.30% p.a.	Up to 7.5 crore
HDFC Bank	8.95% p.a. – 10.25% p.a.	Up to 60% of the value of the property
IDFC First	9.00% p.a. – 16.50% p.a.	Up to Rs.7 crore
Tata Capital	10.10% p.a. onwards	Rs.5 lakh – Rs.5 crore
Axis Bank	9.90% p.a. -10.35% p.a.	Rs.5 lakh – Rs.5 crore
Kotak Mahindra Bank	9.15% p.a. onwards	Rs.10 lakh – Rs.5 crore
IIFL	10.75% p.a. onwards	Up to Rs.10 crore
Edelweiss Financial Services Ltd	As per the terms and conditions	Up to Rs.25 crore
Bank of India	11.25% p.a. onwards	Up to Rs.7.5 crore
L&T Housing Finance	9.50% p.a. onwards	Rs.2 lakh onwards
Union Bank of India	10.50% p.a. – 13.15% p.a.	Up to Rs.10 crore
Indian Bank	10.00% p.a. – 12.60% p.a.	Up to Rs.5 crore
LIC Housing Finance	9.50% p.a. – 11.55% p.a.	Up to Rs.7.5 crore
Bank of Maharashtra	10.45% p.a. – 11.95% p.a.	Up to Rs.10 crore
PNB Housing Finance	10.40% p.a. – 12.75% p.a.	Up to Rs.5 crore
ICICI Bank	10.85% p.a. – 12.50% p.a.	Up to Rs.5 crore
Bajaj Housing Finance	8.50% p.a. – 18.00% p.a.	Up to Rs.5 crore
UCO Bank	10.95% p.a. – 12.10% p.a.	Up to Rs.5 crore
Indiabulls Housing Finance	9.75% p.a. onwards	Based on customer’s profile, repayment capacity and the LTV ratio.
Bank of Baroda	10.85% p.a. – 16.50% p.a.	Up to Rs.25 crore
Federal Bank	12.60% p.a. onwards	Up to Rs.5 crore

*The interest rate depends on the loan amount availed by the customer as well as the type of loan scheme and several other factors based on the terms and conditions of the lender.

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Loan Against Property Schemes- Processing fees, Pre-closure fees and age criteria

Bank/Lender	Processing Fee	Pre-closure Charges
State Bank of India	Flat Rs.10,000	Nil
HDFC Bank	Up to 1.50% of loan amount or Rs.4,500, whichever is higher	NIL
IDFC First	Up to 3% of the loan amount	As per the terms and conditions
Tata Capital	Up to 1.25% of the loan amount	4% + GST
Axis Bank	1% of the loan amount or Rs.10,000, whichever is higher	At the discretion of the bank
IIFL	Up to 2% of the loan amount	NIL
Kotak Mahindra Bank	Maximum 1% of the loan amount + GST	Contact the bank for more information
Edelweiss Financial Services Ltd.	1% of the loan amount	At the discretion of the bank

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Eligibility criteria for Loan Against Property

Type of property – The property should be in India, be it a residential or commercial property.
Minimum and maximum age – 18 to 70 years
Employment type – Salaried or Self-employed
Work Experience – Minimum 1 year in the current organisation
Credit Score – 750 and above
Net Annual Income – Minimum Rs.1.5 lakh p.a.
Net monthly income – Rs.12,000 minimum monthly income
LTV Ratio – Up to 75% of the value of the property
Legal property documents authorized by the Government of India – Registration Certificate, Property Tax Receipts, Sales Deed, etc.

Documents required to apply for the Loan Against Property

Proof of Identity – PAN card, Passport, Driving License, Voter ID etc.
Proof of Address – Passport, Electricity Bill, Aadhaar card, etc.
Property Documents – Copy of original sale deed, allotment-possession letter, NOC from society.
Proof of Age – Passport, PAN card, etc.
Income Proof – Latest Income Tax Return Certificate, Form 16, salary slips, audited financial sheet, certificate of practice, qualification certificate, Shop Act License, Sales Tax Certificate, etc.

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How to apply for Loan Against Property?

You can apply for Loan against property from a financial lender by following the steps described below:

Step 1: Visit the website of the financial lender to start the process of applying for the loan online.

Step 2: The customer support team of the lender will reach out to you after you submit your application and request you to provide the necessary documents.

Step 3: Once you have submitted the required documents, the lender will carefully verify them to ensure everything is in order.

Step 4: In addition to document verification, the lender will also inspect the property associated with your loan application.

Step 5: If your application meets all the criteria and is approved, the loan amount will be credited directly to your bank account.

FAQs on Loan Against Property

How will I know if my Loan Against Property application is approved?Using your application reference number, you can check the status of your loan application on the website of the lender. If the loan is approved, you will receive a message on your registered mobile number that your loan has been approved and that the money will be credited to your account shortly.
How can I avail the best loan against property scheme?When considering availing a loan against a property scheme you need to compare details in the loan schemes such as tenures, interest rates, and processing fees offered by different lenders to find the one that best aligns with your financial goals and offers favourable terms and conditions.
Is it possible to apply for a Loan Against Property if it is a joint property?Yes, it is possible provided that the co-applicant of the loan is the joint owner of the property. In fact, a higher loan amount can be availed for joint properties.
Is there an application fee for Loan Against Property?Financial lenders have a set application fee which includes the charges to evaluate the property and the legal verification process.
Do lenders offer Loan Against Property schemes for Non-resident Indians?Yes, some lenders offer the Loan Against Property for Non-resident Indians as well, but it depends on the terms and conditions set by the lender you wish to avail the loan from.
Is there a specific purpose that I should mention to avail such a loan?Customers can opt for the Loan Against Property for business purposes, personal reasons or debt consolidation.
Is the interest rate for the Loan Against Property standard between lenders?No, the interest rates offered by lenders vary.
Is there moratorium offered by banks on Loan against Property?Yes, as per the directive by the Reserve Bank of India (RBI), banks in India are offering moratorium on EMIs due between 1 June 2020 to 31 August 2020. The bank will not charge any late payment charges during the moratorium period. However, it must be noted that the interest on your loan will continue to get accrued and you will end up paying more towards interest, thereby further increasing the total cost of your loan. Hence, it is recommended that you opt for loan moratorium only if you are facing a severe financial crunch.

Courtsey To : Bankbazaar