A loan against property is when you use your house or land as security to borrow money from a bank; this is often called a mortgage loan also. People often need this loan when they require a large amount of money for things like starting a business, paying off debts, or funding education.
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| Criteria | Details |
|---|---|
| Eligibility | Salaried or self-employed individuals |
| Interest rate | 8.50% to 18% p.a |
| Processing Time | Within 72 hours |
| Co-applicant | Allowed to increase loan amount and decrease mortgage interest rates |
| Documentation | Minimum required |
| Maximum amount provided | Up to 70% of residential and commercial property |
| CIBIL Score | Close to 750 or higher for instant sanctioning and lower interest rates |
| Loan Tenure | Salaried: 2 to 20 years Self-employed: 2 to 18 years |
| Bank | Interest Rate |
|---|---|
|
10.00%-11.30% p.a. |
|
9.50% – 11.00% p.a. (floating) 11.80%-13.30% p.a. (fixed) |
|
10.85%-12.50% p.a. |
|
10.15% – 12.50%p.a. |
|
9.10%-12.25% p.a. |
|
10.50%-10.95% p.a. |
|
14%-16.25% p.a. |
|
10.30% to 12.80% p.a. |
|
10.70%-11.85% p.a. |
|
9.15%-18.00% p.a. |
|
9.50% p.a. onwards |
|
9.00%-20% p.a. |
The loan against property interest rate calculator will help you to know the approximate interest rates on the loan amount you are eligible for and the loan against your commercial or residential property. The factors that are considered for the loan against property interest rate are the user’s profile, company name, monthly salary, credit history, CIBIL score, etc. Also, you can calculate the Loan Against Property EMI with the help of the smart EMI calculator that will help you to determine the EMIs associated with your total loan amount, so you can plan your finances better. Now calculate your mortgage loan interest rates, tenure, and EMIs within a few seconds.
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| Year | Principal(A) | Interest(B) | TOTAL PAYMENT(A + B) | BALANCE |
|---|
Tipycally between 18 to 70 years
Minimum Salary Rs. 12,000 Per month and 1.5 lakhs per annum
Salaried or Self Individual
Ownership of residential or commercial property
The value of the property pledged as collateral should meet the lender's requirement
Borrower's ability to repay the loan based on their indcome and financial stability
750 or above preferred
Resident Indian or Non resident Indian
Up to 75%
Such as minimum income level
Borrowers pledge their residential property (such as a house or apartment) as collateral to secure the loan.
Borrowers pledge their commercial property (such as an office space or retail outlet) as collateral to secure the loan.
Borrowers pledge future rental income from leased commercial properties as collateral to secure funds.
Borrowers pledge a vacant plot of land they own as collateral to secure the loan.
Borrowers who already have an existing LAP can avail additional funds over and above their current loan amount.
Borrowers can transfer their existing LAP from one lender to another to avail better terms and conditions, such as lower interest rates or longer repayment tenure.
| Aspect | Home Loan | Loan Against Property (LAP) |
|---|---|---|
| Purpose | Used for purchasing or constructing a new home | Can be used for various purposes like business expansion, education, debt consolidation, etc. |
| Collateral | The property being purchased serves as collateral. | Existing residential or commercial property is pledged as collateral. |
| Loan Amount | Based on the cost/value of the property being purchased. | Based on the market value of the property being pledged as collateral. |
| Usage of Funds | Restricted to purchasing or constructing a new property. | Flexible; can be used for various personal or business needs. |
| Interest Rates | Generally lower as it's considered less risky for lenders. | Slightly higher compared to home loans due to perceived higher risk for lenders. |
| Tenure | Typically longer tenure, up to 20-30 years. | Generally shorter tenure, up to 15-20 years. |
| Purpose of Property | Property being financed must be residential. | Property being pledged can be residential or commercial. |
| Purpose of Property | Property being financed must be residential. | Property being pledged can be residential or commercial. |
| Eligibility Criteria | Focuses on borrower's income, creditworthiness, and property value. | Focuses on borrower's income, creditworthiness, and property value. |
| Usage of Funds | Restricted to purchasing or constructing a new property. | Flexible; can be used for various personal or business needs. |
| Tax Benefits | Eligible for tax benefits under sections like 80C, 24(b), and 80EE. | Limited tax benefits available compared to home loans. |
| Document Type | Examples |
|---|---|
| Identity Proof | Aadhar Card, Passport, Voter ID, Driving License |
| Address Proof | Aadhar Card, Utility Bills (Electricity/Water/Gas Bill), Passport, Voter ID |
| Property Documents | Sale Deed, Property Title Deed, Property Tax Receipts, Approved Building Plan |
| Income Proof | Salary Slips (for Salaried Individuals), Income Tax Returns (ITR) for the last few years, Bank Statements for the last 6 months, Profit and Loss Statement (for Self-employed Individuals) |
| KYC Documents | PAN Card, Aadhar Card, Passport-size Photographs |
| Bank Statements | Savings Account Statements, Current Account Statements (if applicable) |
| Employment/Business Proof | Employment Certificate (for Salaried Individuals), Business Registration Certificate (for Self-employed Individuals), Business Ownership Proof |
| Additional Documents | Co-applicant's documents, Property valuation report, Any other documents requested by the lender |
Fill out the loan application form online or at the bank branch
Check your eligibility and explore loan options. If you're not eligible, the lender might suggest alternatives like additional documents or adding a co-applicant.
Arrange a meeting with the loan provider and submit photocopies of your income, property, and KYC documents.
A bank representative will collect documents from your given address. Pay the technical charges and processing fees.
Verification process begins, including checking your phone number, address, and property's authenticity and value.
After assessing your property, the bank will approve your loan eligibility.
The bank approves your loan, issues a sanction letter, and moves towards loan disbursement.
Submit original documents and mortgage registry documents signed and registered to the bank.
Registration process typically takes 4 to 5 working days. Eazy bank loan representatives will assist you through the process with minimal hassle.
The moratorium period is a specified period during which borrowers are not required to make any principal repayments on their loan, although interest payments may still be due and also in this period the bank will not charge any late payment charges. As per RBI, the banks offer moratorium between 1 June to 31st August 2020 during covid period.
Borrowers have the option to defer their loan payments for a certain duration.
While the principal repayment is deferred, interest continues to accrue on the outstanding loan amount.
The deferred principal amount is usually added to the loan balance, resulting in an increase in the outstanding loan amount
After the moratorium period ends, the EMI may increase since the loan amount has now increased due to the accrued interest during the moratorium period.
However, the increase in EMI depends on factors such as the loan tenure, interest rate, and the specific terms agreed upon with the lender.
Overall, while a moratorium period offers temporary relief from loan repayments, it may result in higher EMIs once the repayment resumes due to the accrued interest. Borrowers should carefully consider the implications of opting for a moratorium and assess their financial situation accordingly.
The Loan-to-Value (LTV) ratio is a financial term used by lenders to assess the risk of lending money to borrowers. In simple terms, the LTV ratio indicates how much of the property's value is being financed through the loan. For example, if a property is appraised at Rs. 1 crore and the lender offers a loan of Rs. 70 lakhs against it, the LTV ratio would be 70%.
The LTV ratio is calculated by dividing the loan amount sanctioned by the appraised value of the property used as collateral, expressed as a percentage.
“”LTV Ratio= Loan Amount / Appraised Property Loan * 100””
If a property is appraised at Rs. 1 crore and the lender offers a loan of Rs. 70 lakhs against it, the LTV ratio would be:
“” LTV Ratio= 70 lakhs/ 1 crore *100 “”
So, in this case, the LTV ratio would be 70%, indicating that the loan amount is 70% of the property's appraised value.
LTV ratio determines the risk exposure for the lender; higher LTV ratios indicate higher risk for the lender, while lower LTV ratios indicate lower risk. Lenders often have specific LTV limits based on factors such as the type of property, borrower's creditworthiness, and prevailing market conditions.
| Charge | Description |
|---|---|
| Processing Fees | 1%-2% of the loan amount |
| Prepayment Charges | 1%- 3% on fixed rate loans |
| Part Payment Charges | Fixed rate: Up to 4% on outstanding interest principal |
| Foreclosure Charges | Fixed rate: Up to 2% on outstanding interest principal |
| Penal Interest | 2% per month on overdue installments |
| Miscellaneous Charges | Any other fees or charges specified by the lender, such as administrative charges or CERSAI charges. |
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If you intend to sell the property used as collateral before repaying the loan, you must first repay the outstanding loan amount to the lender. Once the loan is fully repaid, you can proceed with the sale of the property.
Yes, it is possible to transfer your existing loan against property to another lender through a process called loan balance transfer. By transferring your loan to another lender offering better terms, you may be able to avail lower interest rates, reduced EMIs, or other benefits.
A loan against property (LAP) is a type of secured loan where borrowers pledge their existing residential or commercial property as collateral to avail funds for various purposes like business expansion, education, debt consolidation, etc.
Both residential and commercial properties can be used as collateral for a loan against property. This includes self-occupied or rented residential properties, as well as commercial properties like shops, offices, warehouses, etc.
The maximum loan amount you can avail against your property depends on factors such as the property's market value, your income, repayment capacity, and the lender's policies. Typically, lenders offer loans ranging from 50% to 75% of the property's market value
The interest rate for a loan against property can be either fixed or variable, depending on the lender's policies and the type of loan product chosen. It is advisable to check with the lender for the prevailing interest rates and choose the option that suits your requirements.
In a loan against property, borrowers pledge their property as collateral to avail funds from a lender. The loan amount is determined based on the property's market value, borrower's income, repayment capacity, and other factors. Borrowers repay the loan through EMIs over the agreed-upon tenure.
Yes, you can add a co-applicant such as a spouse or family member to increase your eligibility or loan amount for a loan against property. The co-applicant's income and creditworthiness are also considered in determining the loan eligibility and amount.
Yes, you can apply for a Loan Against Property if the property is jointly owned. In such cases, all co-owners of the property must be co-applicants for the loan, and their income and creditworthiness will be considered in determining the loan eligibility and amount.
