Loan Against Property
Features and Benefits of Loan Against Property
A loan against property (LAP) is a secured loan in which an individual or business pledges a property as collateral to borrow funds from a lender. The property can be residential, commercial, or industrial and remains with the borrower, but it acts as security for the loan. Unlike a home loan, a home loan against property can be used for various purposes, not just for buying, renovating, or extending a home.
A loan against property provides the benefit of borrowing larger loan amounts by using property as collateral. Besides, several other advantages make a LAP a cost-effective borrowing option for borrowers.
Loan Against Property
Higher Chances of Loan Approval
Since the loan is secured by property, lenders are more likely to approve the application
Lower Interest Rates
Being a secured loan, the interest rates are generally lower compared to unsecured loans
Higher Loan Amount
Borrowers can avail larger loan amounts, typically up to 60-75% of the property's market value
Longer Repayment Tenure
Loans can be repaid over a longer period, usually ranging from 10 to 20 years
No End-Use Restrictions
The loan can be used flexibly for various purposes, including business, personal expenses, or education
Loan Against Property EMI Calculator
Your Monthly EMI
₹ 77,530
Total Principal
₹ 1,00,00,000
Total Interest
₹ 86,07,174
Total Payable
₹ 1,86,07,174
Loan Against Property Interest Rates of All Banks and NBFCs
Interest rates for LAP vary across banks and housing finance companies, typically ranging from 9% to 15% per annum. It is essential for borrowers to compare these rates to find the most favorable terms that suit their financial needs.
Have a look at the loan against property lowest interest rates of leading banks and NBFCs in India for an informed decision regarding the same:
| Bank/ NBFC | LAP Interest Rate (Fixed & Floating) |
|---|---|
| IDFC Bank | 9.00% - 20% p.a. |
| Tata Capital | 9.00% - 14.25% p.a. |
| PNB Housing Finance | 9.25% - 15% p.a. |
| HDFC Bank | 9.50% - 11.00% p.a. |
| LIC HFL | 9.50% - 11.55% p.a. |
| IDBI Bank | 9.50% - 11.70% p.a. |
| Kotak Mahindra Bank | 9.50% p.a. onwards |
| Bajaj Housing Finance | 9.75% - 18.00% p.a. |
| SBI | 10.00% - 11.30% p.a. |
| Cholamandalam Housing Finance | 10.00% - 24.00% p.a. |
| Indian Bank | 10.00% - 12.75% p.a. |
| Bajaj Finserv Housing Finance | 10.10% - 18.00% p.a. |
| Axis Bank | 10.40% - 12.75% p.a. |
| Bank of Baroda | 10.85% - 18.60% p.a. |
| ICICI Bank | 10.85% - 12.50% p.a. |
| Bank of Maharashtra | 10.95% – 11.45% p.a. |
| Bank of India | 11.35% - 12.85% p.a. |
| Piramal Housing Finance | 11.50% p.a. onwards |
| IIFL Housing Finance | 11.50% p.a. onwards |
| Shriram Housing Finance | 12.50% - 14.00% p.a. |
| Bandhan Bank | 12.64%-17.22% p.a. |
Eligibility for Loan Against Property
A loan against property meaning will be incomplete without knowing about its eligibility. Different banks and NBFCs have their own criteria to evaluate and approve a LAP scheme, but you can get an idea by understanding the common loan against property eligibility criteria they usually follow that are listed below:
Common Eligibility Criteria
Age
18 to 70 years
Nationality
An Indian citizen with collateral property in India
CIBIL Score
750 or more
Employment Status
Salaried, self-employed professional, or self-employed non-professional
Work Experience
Minimum 1 year in the current organization (If salaried)
Income
Must have a stable income
Property Type
Residential, commercial, or industrial property that can be pledged as collateral
Loan Against Property Fees and Other Charges
When taking a loan against property, borrowers should be aware of various fees and charges. These typically include a processing fee, which is a percentage of the loan amount, along with legal and valuation fees for property assessment and documentation. Additionally, some lenders may impose foreclosure or prepayment charges if the loan is repaid early, though these vary depending on the loan terms.
The table below will acquaint you with a general range of a loan against property processing fees and other charges:
| Processing Fee | Generally, up to 2% of the loan amount + GST |
| Legal/ Valuation Charges | Generally a small fee for legal verification and property valuation |
| Penal Interest | General 2% per month on the overdue installments |
| Foreclosure/ Prepayment Charges | Generally, nil for floater plans; up to 2% of the outstanding loan amount for fixed plans |
Documents Required for Loan Against Property
Lenders, be it banks or NBFCs, require KYC documents like identity, income, and address proof to verify the borrower’s authenticity, ability to repay the loan, and residential details. KYC compliance also helps lenders follow legal regulations and reduce the risk of loan defaults. Have a look at the loan against property documents required list given below:
Aadhaar Card, PAN Card, Voter ID Card, etc.
Voter ID Card, Electricity Bill, Telephone Bill, Passport, etc.
Passport, PAN Card, 10th Class CBSE Certificate, etc.
Recent ITR, Form 16, Salary Slips, Bank Account Statements, etc.
Recent ITR, Profit and Loss Account Statements and Balance Sheet of the Firm, Bank Account Statements, Business License Details, etc.
Title Deeds, No Objection Certificate, Property Tax Receipts, Deel of Sale, Approved Plan, Encumbrance Certificate, etc.
Loan Against Property Process - Step-by-step Guide
The loan against property processis simple and can be done online from anywhere by following these steps:
Apply Now on the BASIC Website
Visit the BASIC Home Loan official website and click on ‘Apply Now’
Choose ‘Loan Against Property’
Choose ‘Loan Against Property’ under ‘Tell us about your requirements’
Enter Your Details
Fill out the online form and submit
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The BASIC Home Loan team will reach out to you for further assistance.
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