Loan against Property (LAP) is one of the variants of the personal loan, Laps square measure secured loans offered by banks and money establishments exploitation to one or a lot of properties in hand by you as collateral. One will avail these mortgage loans against industrial property and residential property collaterals. During a LAP the property is encumbered and a set share of the prevailing market price of the property (normally between 60-70% of the worth of the property) is given to the recipient as a loan. Although such a property is encumbered to the investor, you're still allowed to continue utilization of it for residential or industrial functions.
These loans square measure a higher choice as compared to non-public loans because of their relatively lower rate of interest. To boot, in contrast to gold loans, wherever the gold ornaments square measure deposited with the bank and you are doing not get them back till the loan is paid fully, you'll continue exploitation the collateral property during a LAP whereas you're repaying the loan.
Loans against property square measure an extremely most popular sort of loans in Asian nation, and square measure far more simply offered with the surge in banks and NBFCs providing such loans, alongside being cost-efficient, these loans square measure moderately convenient to avail and repay because of the comparatively low Loans against Property rate.
You can submit real estate loan application for following purposes:
Expanding your business
For your child’s wedding
Funding medical treatments
For your child’s higher studies
Funding your dream vacation
Now you can compare interest, processing fee, tenure and max. Loan offers, of all the banks before choosing your desired loan.
All loans are not created equal, Loan Against Porperty has become a great option for people to use.
compare Loan Against Property interest rates by banks
|#||Providers||Interest Rate||Processing Fee|
|1||SBI Loan Against Property||12.55%-17.65%||1%-3% of the loan amount + applicable Service Tax|
|2||Axis Bank Loan Against Property||11.25%-24%||1.50%-2.00% of the loan amount + Service Tax, as applicable|
|3||ICICI Loan Against Property||11.29%-22.00%||Upto 2.50% of the loan amount + Service Tax, as applicable|
Different banks and NBFCs have different minimum documentation requirement for Loan Against Property. The common documents required by most banks and NBFCs for individuals requesting a Loan Against Property include :
Proof of identity and residence proof such as Aadhaar Card, Voter ID Card
Salary slips of past 3 months
Form-16 issued by current employer
Bank statements of salary account for the previous six months
A cheque covering the administrative costs/processing fees incurred by the bank in processing the application
Proof of identity and residence proof
Educational qualification certificates, degrees, diplomas, and other academic credentials
IT Returns of the three years preceding the one in which loan is applied for
Bank statements of six months preceding the one in which loan is applied for
For Self-employed Professionals:
Identity and Address proof documentation
Certificates that prove your academic qualifications/credentials
All registration/licensing certificate pertaining to your profession
Business existence proof/business profile details
Previous 3 years’ balance sheets as well as Profit & Loss Statement of the company.
Acknowledged Income Tax statements of the company and self for previous 3 years
Last 6 months’ bank statement.
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.
Any loan against a residential or commercial property can be used for both personal and business purposes. In fact, you can use it for anything other than speculative or non-prohibitive activities.
Basically, the bank looks at your repayment capacity. For calculating the loan amount, your income, age, qualifications, number of dependants, spouse’s income, assets, liabilities, stability and continuity of occupation and savings history are taken into consideration. However the eligibility of loan does not, generally, exceed 60 percent of the market value of the property.
You can include your spuse as a co-applicant and that results in a higher amount being lent. However, if the property is co-owned, all co-owners mandatorily need to be co-applicants.
Processing fee for loan against any property varies from bank to bank and is generally around 1 percent.
Interest is calculated on daily reducing balance. Your monthly out-go (equated monthly installment – EMI) is much lower as compared to the interest on annual reducing balance.
Loans against property has a maximum tenure of 15 years, subject to the condition it does not exceed your retirement age. This condition however can be flexible in certain cases
You repay the loan in Equated Monthly Installments (EMIs) comprising principal and interest. Repayment by way of EMI commences from the month following the month in which you take full disbursement.
As the name implies you need to mortgage your property for availing this loan. This mortgage is Equitable mortgage by Memorandum of Entry by way of deposit of title deeds and/or such other collateral security, as may be necessary. Collateral security for by way of assignment of insurance policy or any such other assignable financial instruments are also required, as security to loan if deem necessary by the Bank.
Please do ensure that the title to the property is clear, marketable and free from encumbrance. To elaborate, there should not be any existing mortgage, loan or litigation which is likely to affect the title to the property adversely.
Yes. Prepayment is possible and there is no prepayment fee if you repay the loan after six months of availing the loan if you pay from your own source of funds without transferring the loan.
The repayment capacity of the applicant(s) based on Resident status is reassessed and a revised repayment schedule worked out. The new rate of interest will be as per the currently applicable rate of Resident Indian loans (for that specific loan product). This revised rate of interest would be applicable on the outstanding balance being converted. A letter is given to the customer confirming the change of status.