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Loan Against Property

Loan Against Property scheme is a secured personal loan which you can avail by pledging your property as a security or a collateral. These personal loan schemes are also known as mortgage loans. Loan Against Property interest rates range between 8.45% p.a. to 16.75% p.a. You can avail loans of up to Rs.25 crore for a tenure of up to 20 years with LAP.

Interest Rate

8.45% p.a. onwards

Loan Amount

Up to Rs.25 crore

Loan Tenure

Up to 20 years

Processing Fee

1% – 3% of the loan amount + GST

Factors Affecting Mortgage Interest rates

  • Repayment Tenure: Shorter loan tenure might mean higher interest rate charged by the lender, and subsequent higher EMIs
  • Credit Score: A borrower credit score of 700 or above might lea to lower interest rates charged by the lender, and vice versa
  • Borrower Profile:
    • Age
    • Nature of Employment (self-employed or salaried)
    • Income level
  • Property Type:
    • Age of Property
    • Market Value
    • Condition

Best Loan Against Property Schemes

Banks
Interest Rate
Loan Amount
Tenure

State Bank of India 

9.50% p.a.- 10.50% p.a. 
Up to 100 Cr

5-15 years 
HDFC Bank Limited
9.00% to 10.00%

Up to 100 Cr 
5-15 yr
AXIS Bank Limited

9.00% to 10.00% 

Up to 100 Cr 

5-15 yr 

ICICI Bank Limited 

9.35% to 10.35% 

Up to 100 Cr 
5-15 yr

Kotak Mahindra Bank Limited 
9.00% to 10.00%
Up to 100 Cr
5-15 yr
Federal Bank Limited
10.85% to 11.85%
Up to 10 Cr
5-15 yr
HSBC Bank Limited
9.35% to 10.35%
Up to 100 Cr
5-15 yr
Deutsche Bank
9.35% to 10.35%
Up to 100 Cr
5-15 yr
IDFC FIRST Bank
9.00% to 10.00%
Up to 25 Cr
5-15 yr
Induslnd Bank Limited
9.00% to 10.00%
Up to 100 Cr
5-15 yr
DCB Bank Limited
9.35% to 10.35%
Up to 100 Cr
5-15 yr
Yes Bank
9.50% to 10.50%
Up to 10 Cr
5-15 yr
IDBI Bank Limited
10.45% to 11.45%
Up to 100 Cr
5-15 yr
Canara Bank
9.25% to 10.25%
Up to 100 Cr
5-15 yr
Bank of Baroda
10.85% to 11.85%
Up to 100 Cr
5-15 yr
Union Bank of India
9.35% to 10.35%
Up to 100 Cr
5-15 yr
Indian Bank
10.00% to 11.00%
Up to 100 Cr
5-15 yr
Punjab National Bank
9.65% to 10.65%
Up to 100 Cr
5-15 yr
Karnataka Bank Ltd
9.25% to 10.25%
Up to 25 Cr
5-15 yr
Bank of India
10.25% to 11.25%
Up to 100 Cr
5-15 yr
Bajaj Finserv Limited
9.00% to 10.00%
Up to 10 Cr
5-15 yr
IIFL Finance Limited
11.25% to 12.25%

Up to 5 Cr 
5-15 yr
Punjab National Bank Housing Finance LAP
9.00% to 10.00%
Up to 10 Cr
5-15 yr
Godrej Capital Limited
9.75% to 10.75%
Up to 10 Cr
5-15 yr
L&T Finance Limited
9.60% to 10.60%
Up to 10 Cr
5-15 yr
Piramal Housing Finance Limited
11.00% to 12.00%
Up to 10 Cr
5-15 yr
Aditya Birla Finance Limited
11.50% to 12.50%
Up to 10 Cr
5-15 yr
Tata Capital Limited
10.25% to 11.25%
Up to 10 Cr
5-15 yr
Indiabulls Housing Finance Limited
10.45% to 11.45%
Up to 10 Cr
5-15 yr
Fullerton India Credit Co. Ltd
9.00% to 10.00%
Up to 10 Cr
5-15 yr
Capri Global Capital Limited
10.25% to 11.25%
Up to 2 Cr
5-15 yr
Edelwise
9.25% to 10.25%
Up to 5 Cr
5-15 yr
Cholamandalam Investment & Finance Co. Ltd
11.50% to 12.50%
Up to 5 Cr
5-15 yr
Aadhar Housing Finance Limited
11.75% to 12.75%
Up to 5 Cr
5-15 yr
Vastu Housing Finance co.Ltd
17.50% to 18.50%
Up to 5 Cr
5-15 yr
Anand Rathi Global Finance Ltd
10.30% to 11.30%
Up to 10 Cr
5-15 yr
Hero Fincorp
12.70% to 13.70%
Up to 10 Cr
5-15 yr

Eligibility Criteria

Age: At least 21 years

Salaried Individuals

Must have been employed by the current employer for at least a year

Self-Employed Individuals

Must have been in the same business for a specific number of years

Documents Required

Salaried

  • Proof of total work experience
  • Title Documents for property
  • Completely filled loan transfer application form
  • For salaried employees: Salary slip of previous 3 months with a break up of gross salary, basic pay, home rent.
  • 6 months bank statement with salary credits before 15 days of loan application

For Self Employed

  • Documents Of Business Existence Proof
  • Bank statement of the loan EMI deduction account for the previous 12 months
  • P and L account and Balance Sheet
  • Property title documents
  • All relevant documents relating to the property under the possession of the current lender

Identity proof (any of the following)

  • Aadhaar
  • Passport
  • Driving license
  • Voters ID card
  • PAN card

Address proof (any of the following)

  • Voter ID
  • AADHAAR
  • Passport
  • Driving license
  • Ration card
  • Utility bills
  • LIC Policy

Age proof (any of the following)

  • 12th Marks Sheet
  • 10th Marks Sheet
  • Voter ID
  • PAN

Different Charges Payable

  • Processing Fee: A mandatory charge deducted by the lender at the time of application, which is non-refundable even in case of rejection
  • Foreclosure and Prepayment charges: The lender might levy charges in case of foreclosure (i.e. paying off the debt I full before the tenure is up) or prepayment (i.e. making a part of the payment before time)
  • Other Charges: legal fee, documentation charges, stamp duty, technical evaluation fee, title search report fee, etc.
 

Features And Benefits

  • Can be availed against self –occupied home, flat, apartment, etc.
  • Can be availed even against rented residential property.
  • Can be availed against commercial properties like office, mall, shops, etc.
  • Can be availed against a piece of land owned by the borrower.
  • Can be availed by salaried or self-employed individuals fitting the eligibility criteria.
  • Higher loan amount, flexible repayment tenure and lower interest rates compared to personal loans.
  • The EMIs paid can be used to avail tax benefits under Section 37 (1) of the Income Tax Act, 1961.
  • If the loan is used to fund a house, the interest can get tax benefits under Section 24 of the Income Tax Act, 1961, up to a maximum of Rs. 2 lakh.

Prepayment Benefits:

  • Prepaying reduces the total outstanding amount, cutting the repayment tenure, which means one can pay off the loan faster and be released from the liability of it.
  • With a reduction in the outstanding amount, the EMIs payable also decreases, which could mean more savings.
  • While prepayment, one pays off the principal amount first. This leads to reduction in interest and the interest cost.
  • The repayment becomes less stressful, within the tenure.

Frequently Ask Questions

If you have a question that deals with clients, customers or the public in general, there is bound to be a need for the FAQ page.

For sole ownership properties, there need not be a Co-Applicant. However, in case of properties with multiple owners, all need to be Co-Applicants while availing a loan against that property.However, having a Co-Applicant, like a spouse raises the total income and repayment credibility for borrowers.

In case of selling off a property in its prevailing conditions, the money it could raise is considered its market value.

Usually lenders accept any kind of residential, commercial or industrial property. However, the age and condition of the property might play a part in eligibility.

The repayment tenure is largely dependent on the lender. However, a maximum of 15 years can be availed for LAP, provided it does not exceed the borrower’s retirement age.

Yes, a number of lenders grant LAP to NRIS.

No, usually an uninsured property cannot be used to avail a LAP from lenders.

Yes, a LAP can be used for any purpose so long as it is not of speculative or non-prohibitive in nature.

A lender takes the following factors into consideration that might affect the repayment capacity, while determining the maximum LAP amount that can be provided to a borrower:

  • Age
  • Income
  • Qualification
  • Employment Type
  • Number of dependents
  • Assets
  • Liabilities
  • Spouse’s income
  • Stability
  • Occupational continuance
  • Savings history
  • Credit Score

In any case, the total loan amount does not exceed 60% of the market value of the property.

The processing fees vary from lender to lender, starting from 1% of the total loan amount, for most lenders.

Yes, repaying the loan ahead of tenure, also known as foreclosure, is an option for borrowers. It does not usually have extra charges, given it is done after at least 6 months of availing the same, if done from borrower’s own funds, without transferring the loan.

If the Resident status of the borrower changes mid-tenure, their repayment capacity is reassessed by lender and a revised repayment schedule is established. The interest rate charged on the outstanding amount is as per the prevailing rates at the time in the India. The revised status and rates are communicated to the borrower via a letter.

As the name suggests, a Loan against Property is a secured loan, where the property serves as the collateral. It is also called a mortgage loan.

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