Loan Against Property

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What is Loan Against Property?

Do you know that your home holds the key to your future? Whether you want to expand your business, or you need funds for your personal use, our Loan Against Property will cover all your financial needs. We offer an array of attractive options based on their specific needs along with flexible loan tenure and attractive interest rates.

Purpose

Loan against Property is normally can be taken for funding various personal or business needs of an individual e.g.

Improvement or Extension of Existing Property

Marriage in Family

Any Other Personal Need

Purchase of Home or Office

Business Expansion

Education Expenses of Children

Eligibility

The applicant for the loan should be:-

  • Minimum 21 years of age
  • Salaried Individual
  • Self Employed professionals / non-professionals
  • Applicant should be the owner of the property and all co-owner has to compulsorily be co-applicant in the loan, however the co-borrowers need not be the co-owner to the loan.

Loan Amount

Typically you can get up to 55% 70% of the value of the property or twice your annual income (whichever is lower) as a Loan Against Property and nowadays lenders have many other different products like Banking Surrogates. On the basis of your running loan tracks, the maximum loan amount is normally between Rs. 5 10 crores, but can be extended in some cases depending on the borrowers profile.

The final loan amount is dependent on host of other factors like income and regular outgoings, existing loans, repayment track record, valuation of the property by the lender etc.

Loan Against Property is given on the below mentioned properties and the percentage that you can get loan is listed below.

Residential Property:

Self-Occupied 75%

Vacant – 60%

Rented – 60%

Commercial Property:

Self-Occupied 60%

Vacant – 55%

Rented – 55%

This varies from Bank to Bank in 5- 10% of the above.

To calculate as to how much you can pay, it is looked at, by most banks in the below mentioned ways

For Salaried:

{(Net Take Home – Obligation) * 70%} / EMI per Lakh

For Self-Employed:

{(Income – Obligation) * 65%} / EMI per Lakh

Whichever is lower from the value of the property or your income- that loan amount will be given to you.

The other criteria is maximum age:

For Salaried 60 Years and For Self-Employed 70 Years

Rate of Interest

Loan Against Property is normally available on both – Floating and Fixed rate of interest. Many banks and NBFC offer fixed rate of interest with a reset clause of 2-5 years which means that your fixed interest rate will be reviewed every 2-5 years and can be increased or decreased as per the terms and conditions mentioned in the agreement and floating rate based on the market conditions and effective repo Rate.

Repayment
Most lenders offers maximum tenure of 15 years, however, it is also dependent on the borrowers age at the end of the tenure so as to ensure that the loan repayment ends on or before the retirement age of the borrower which is usually 60 years for salaried and 70 years for self-employed borrowers.

Fees and Charges

  • The processing fee for Loan Against Property may vary from lender to lender but generally is from 0.45% to 1% (excluding service tax) of loan amount.
  • The loan can be foreclosed any time on the payment of applicable penalty, however, if the loan is taken on floating rate from the bank, then the borrower need not have to pay any foreclosure charges.

Document Checklist

To start the loan process, the lender will require proof of –

  • Identity
  • Age
  • Residence
  • Income
  • Property Documents including Title Deeds, Chain of Documents etc.

Our consultant will guide you for the exact list of documents (LOD) needed as per your profile.

FAQ

A Loan Against Property is essentially a loan given against any property. The loan can be taken against fully constructed, residential, and commercial properties for business needs, marriage, medical expenses or any other personal needs.

Any Resident Indian Individual (salaried/ self-employed) can apply. The co-applicants can be close relatives, partnership firms, or even a Private Limited Company.

Repayment can be made by way of EMIs and must be made through Automated Clearing House (ACH) or Electronic Clearing System (ECS).

Normally a guarantor is not required; however, this would also depend upon the loan facility and financial strength of the customer. However, every loan to have either co-borrower or guarantor.

You will receive expert legal and technical counseling that will help you make the right financial decision.

You can include your spouse as a co-applicant for the loan and we shall include his / her income to enhance your home loan amount. Further, in case there are any other co-owners they also need to be co-applicants. Other than the spouse, please check with your home loan counsellor on the approved co-applicants for the loan.

Yes, you can make your prepayment in either part or full. Please refer Schedule of Charges for charges on prepayment.

In the case of a bounced or delayed payment, charges and outstanding dues will be charged as per the prevailing company policy.