About Loan Against Property

'Loan Against Property', is also known as mortgage loan. This is a type of a secured loan as collateral is involved. This means if you want this loan, you will have to put your property as mortgage with the bank. Any property whether it is commercial or residential, can be used in order to induce a loan against property. The main highlight of the loan against property is that you just can get 40-65%* of the property's value because the loan amount. Hence if you happen to own over one property under your name, you'll be able to keep the dearer property as collateral. This will help you get a better loan amount. The lender will do valuation of your property and finalize the market value for it. On the basis of that value, you will get the loan amount

For what purposes you can use Loan Against Property funds?

  • Customers need a loan for various reasons. You can get a loan against property for any of the below mentioned reasons:
  • For funding and expanding your business potential.
  • To purchase new property/land by mortgaging existing property
  • For marriage
  • To fund emergency medical treatments
  • To fund higher studies
  • To fund a vacation
  • For home renovation or expansion

What are the Eligibility Criteria to avail a Loan Against Property?

The borrower needs to present the loan against property documents required in order to get a loan. Banks will offer loans to borrowers who fulfill the loan against property eligibility. The eligibility criteria changes from bank to bank and the profile of the borrower. But there are some commonalities which you have to follow to get a loan against property from any bank. The common and generic factors in a loan against property process are listed below.

  • Banks give loan against property by dividing their customer's profession and their income history. The common and generic factors are listed below :
  • The borrower has to be an Indian citizen.
  • Professional stability and savings history of the borrower also play a major role in approval of a loan against property.
  • The borrower should have a good credit history at his/her disposal with proven track record of timely loan EMI and credit card bill repayment without any default.
  • Steady and healthy relationship with the bank will also help you to get the mortgage loan against property quickly and you might get exempted from paying the hidden charges and processing fees.
  • The loan against property eligibility is also decided on the basis of your market value of the mortgaged property.
  • The property should currently exist and should be under the applicant's name. The loan against property can be taken as co-applicants if the property is registered under multiple names.

What are the Eligibility Criteria to avail a Loan Against Property?

The borrower needs to present the loan against property documents required in order to get a loan. Banks will offer loans to borrowers who fulfill the loan against property eligibility. The eligibility criteria changes from bank to bank and the profile of the borrower. But there are some commonalities which you have to follow to get a loan against property from any bank. The common and generic factors in a loan against property process are listed below.

  • The eligibly criteria for loan against property also changes based on applicant's profession. The details of the same are given below :
    • Salaried Applicant :
    • You must be a permanent employee with either a company or the government.
    • You should also be an employee with government or existing company for a minimum period of 3 months.
    • A salaried applicant must be over 24 years at least in order to avail a loan against property.
    • You should currently be employed with your existing organization.
    • You should currently be employed with your existing organization.
    • The property should currently exist and should be under the applicant's name. The loan against property can be taken as co-applicants if the property is registered under multiple names.
    • Professional Applicant/ Self-Employed Applicant :
      • Self-Employed Professional : ¬†These can be Architects, Doctors, Chartered accountants and many more.
      • Self-Employed Non-Professional : ¬†They can be Commission agents, Traders, Contractors and many more.
    • In order to get a Loan against property transfer without a top up for professional applicants, they must be at least 25 years old and this can be extended to a maximum of 65 years.
    • You must be involved in the existing business for few years (this number is defined by bank and will not necessarily be the same).
    • You must also be a regular in filing income tax returns regularly.
  • The property has to be eligible in order to be kept as collateral in the bank or NBFCs. The loan against property eligibility criteria are given below :
  • The property which will be kept as collateral should not be involved in any legal tangles.
  • The property should have clear titles registered in the name of the applicant.
  • Generally, the market value of the given property should be higher as the loan amount you'll get will totally depend on the current value of property.
  • The property should not be kept as a mortgage with any other financial institution while applying for loan against property.

What are the Interest Rates for Loan Against Property?

The borrower has an option to choose for two types of loan against property interest rate while applying i.e. Fixed Interest Rate and Adjustable Interest Rate. If you opt for fixed interest rate, the mortgage loan interest rates stays fixed throughout the loan tenure. The fixed interest rate changes from bank to bank but it's always between 8.50% - 12%* per annum. If you opt for adjustable loan against property interest rates, the interest rate does not stay fixed or static. The loan against property interest rates changes from time to time as per prevailing market conditions. This type of loan against property interest rates is beneficial for those who want to keep the loan for a short duration.