Loans against property

Loans against property

  • What is Loan against property ?

Loan against Property is a type of personal loan that is offered by the bank by keeping one of your properties as collateral.

Some of the key points related to Loan against property are mentioned below:

  • It is another name for mortgage loan against property and can be availed by both salaried as well as self employed people.
  • The property can be either commercial or residential. The borrower is given 60 to 70 per cent of the market value of the mortgaged properties.
  • You can use the property for your commercial or residential purposes even though it is mortgaged to the lender.
  • You have the option of either loan against property apply online or offline.
  • It is considered to be better than personal loan because it has lower rate of interest as compared to personal loan. The EMI that is to be paid for Loan against Property is also lower as compared to the personal loans.
  • You can also use the property while repaying back the loan amount which is an add on benefit.
  • These types of loans are very popular since they are easily available. They are also preferred by most people.
  • They are cost effective and come with very low rates of interest.
  • You can get a mortgage loan for business as well as personal needs.Loans against property

When can you submit the application of Mortgage Loan?

You can get a Loans against property in India for the following purposes:

  • When you want the marriage of your child.
  • If you want to expand your business.
  • If you want to fund your dream vacation.
  • If you want any type of medical treatments.
  • For funding your child’s higher education.

Features of Loan against Property:

Loan against property is one o the most preferred forms of loans in India. The features of this loan are as follows:

  • It can be availed in a quick manner since they are secured loans. The banks provide these loans willingly.
  • The tenure of these loans are really long and can be extended for up to 15 years.
  • The rate of interest of these types of loans is very low as the property is kept as collateral. The rate of interest range between 12 to 15 %.
  • The EMI is very low in the case of Loan against Property as the tenure period is long. This loan is ideal for those people who cannot afford to pay higher EMIs.
  • You can prepay the loan against property and the lender will not charge any fees for prepaying it.
  • The loan is processed within 72 hours of applying for it.
  • The loan amount can be between 1 crore to 3.5 crore in case you are a salaried or self employed person.
  • You can apply for this loan along with your spouse.

Which property can you mortgage?

  • You can get a mortgage loan for house.
  • A residential property that is rented.
  • You can also get a mortgage loan for land.

Make sure that the property does not have any mortgage of litigation.

The Loans against property eligibility requirements are as follows:

For salaried people:

  • The person should be an Indian.
  • The person has to be between 33 to 58 years of age.
  • The source of income of the person should be stable.
  • The credit history of the person should be good with a track record of timely payment of EMI.
  • The person should be working in the current organization for a considerable amount of time.

For self-employed:

  • The person should be an Indian.
  • The person should be between 25 to 70 years of age.
  • The source of income should be stable.
  • The credit history of the person should be good with a track record of timely payment of EMI.
  • The person should be running his business for a considerable amount of time.

 

The loan against property documents required are as follows:

  • Your KYC
  • Documents of the property that need to be mortgaged.
  • Proof of address
  • Bank account statements
  • Income tax return
  • Salary slips

 

The banks offer two types of rates for Loan against Property:

  • Floating Rate: The rates vary according to the market conditions. It is not fixed.
  • Fixed Rate: In this the interest rate is same for the entire tenure period.

The loan against property interest rate of various banks is as follows:

  • HDFC bank: 65%
  • SBI: 30%
  • United Bank of India: 75%
  • Federal Bank: 90%
  • Yes Bank:50%
  • South Indian Bank:70%
  • Bank of India:65%
  • IDBI Bank:20%
  • ICICI Bank: 15%
  • Andhra Bank: 75%
  • Kotak Bank:60%
  • Punjab and Sind Bank: 30%
  • Dhan Laxmi Bank: 68%
  • Karnataka Bank: 90%
  • Indian Overseas Bank: 90%
  • Canara Bank: 70%

 

  • Personal Loan is unsecured loan whereas mortgage loan is unsecured loan.
  • The tenure for Loan against property is higher as compared to the personal Loan.
  • The EMI for personal loan is higher as compared to the mortgage loan. This is beneficial for people who cannot pay higher EMIs.
  • The personal loan does not require any property as a collateral since it is an unsecured type of loan whereas the mortgage loan requires collateral.

The rate of interest for Loan against Property is lower as compared to the personal loan. Therefore, Loan against Property is one of the most preferred forms of loan.

 

The following are the mortgage loan types:

  • Loan against Property Top up: In this type of loan you can get an additional amount of loan on your loan against property.
  • Loan against Property Overdraft: In this type of loan the interest rate is charged only on the principal outstanding and the borrower can deposit the leftover money in the bank account at any other time.

 

After you have done your research on mortgage loan and have selected the bank from which you want the loan the mortgage loan process will soon follow:

  • Fill the application form online or offline by visiting the bank. Give the necessary details to the branch manager and fill the application form carefully.
  • Once you have filled all the essential details in the form the lender will ask calculate the eligibility of the loan and will give the loan options to you.
  • The loan options will include interest rate, required documents, charges of processing and lock in period.
  • If your eligibility requirement is not met according to the bank then the lender will ask you to submit additional documents or add a co applicant for your loan.
  • After this there will be a meeting arranged between you and the lender where you will have to submit the photocopy of certain documents.
  • These documents will include KYC, income documents and property documents.
  • After this process the legal and technical verification will start.
  • For telephonic verification he will give you a call.
  • For residential verification he may visit your office or any other residence provided by you.

Once the verification is successfully conducted and the results are positive, your loan will be sanctioned.

 

    • Can NRIs take the Loan against Property?

    Yes, NRIs can take the Loan against Property. However, they need to verify some other documents for availing the loan.

    • What is meant by market value of a property?

    The market value of a property means the amount of money that a person can get by selling the property in the current situations.

    • Can the money obtained for Loan against Property be used for business purposes?

    Yes, you can use the money for any of your business as well as personal activities.

    Just make sure that you do not use the money for any illegal activities.

    • Can only residential properties be used for Loan against property?

    No, you can get the loan by mortgaging either your residential or your commercial property.

    • Can the Loan against Property be prepaid?

    Yes, the interest as well as the principal amount can be prepaid before the tenure period.

    • Which bank is best for Loan against Property?

    Citibank is considered to be the best bank for Loan against Property as it offers very low rates of interest.

    • What are the different charges for Loan against Property?

    Apart from mortgage interest rates, the bank charges the following charges:

    1. Foreclosure fee: You need to pay this fee if you decide to close the loan before the tenure period ends.
    2. Processing fee: You need to pay this fee when you apply for the loan. You can bring down the processing fee with negotiation.
    • How should you select a bank for Loan against Property?
    1. Check the rates of interest of various banks.
    2. The best offers on processing charges.
    3. Service quality
    • Is the CIBIL score important for Loan against Property?
    1. It is one of the most important thing in Loan against Property.
    2. It indicates a very good track of repayment.
    3. A bad CIBIL score will increase the chances of rejection.
    4. Therefore, it is very important make the payments timely and hence maintain a good CIBIL score.
    • Can I be eligible for the Loan against property even with a bad CIBIL score?

    Yes, you are eligible for Loan against property even with a bad CIBIL score although you need to pay a higher rate of interest with it.

    • Can I apply for Loan against property with my spouse?

    Yes, you can apply for loan against property with your spouse.

 

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Loan against property

  • What is Loan against property ?

Loan against Property is a type of personal loan that is offered by the bank by keeping one of your properties as collateral.

Some of the key points related to Loan against property are mentioned below:

  • It is another name for mortgage loan against property and can be availed by both salaried as well as self-employed people.
  • The property can be either commercial or residential. The borrower is given 60 to 70 per cent of the market value of the mortgaged properties.
  • You can use the property for your commercial or residential purposes even though it is mortgaged to the lender.
  • You have the option of either loan against property apply online or offline.
  • It is considered to be better than personal loan because it has lower rate of interest as compared to personal loan. The EMI that is to be paid for Loan against Property is also lower as compared to the personal loans.
  • You can also use the property while repaying back the loan amount which is an add on benefit.
  • These types of loans are very popular since they are easily available. They are also preferred by most people.
  • They are cost effective and come with very low rates of interest.
  • You can get a mortgage loan for business as well as personal needs.

When can you submit the application of Mortgage Loan?

You can get a loan against property in India for the following purposes:

  • When you want the marriage of your child.
  • If you want to expand your business.
  • If you want to fund your dream vacation.
  • If you want any type of medical treatments.
  • For funding your child’s higher education.

Features of Loan against Property:

Loans against property is one o the most preferred forms of loans in India. The features of this loan are as follows:

  • It can be availed in a quick manner since they are secured loans. The banks provide these loans willingly.
  • The tenure of these loans are really long and can be extended for up to 15 years.
  • The rate of interest of these types of loans is very low as the property is kept as collateral. The rate of interest range between 12 to 15 %.
  • The EMI is very low in the case of Loans against property as the tenure period is long. This loan is ideal for those people who cannot afford to pay higher EMIs.
  • You can prepay the loan against property and the lender will not charge any fees for prepaying it.
  • The loan is processed within 72 hours of applying for it.
  • The loan amount can be between 1 crore to 3.5 crore in case you are a salaried or self-employed person.
  • You can apply for this loan along with your spouse.

Which property can you mortgage?

  • You can get a mortgage loan for house.
  • A residential property that is rented.
  • You can also get a mortgage loan for land.

Make sure that the property does not have any mortgage of litigation.

The loan against property eligibility requirements are as follows:

For salaried people:

  • The person should be an Indian.
  • The person has to be between 33 to 58 years of age.
  • The source of income of the person should be stable.
  • The credit history of the person should be good with a track record of timely payment of EMI.
  • The person should be working in the current organization for a considerable amount of time.

For self-employed:

  • The person should be an Indian.
  • The person should be between 25 to 70 years of age.
  • The source of income should be stable.
  • The credit history of the person should be good with a track record of timely payment of EMI.

The person should be running his business for a considerable amount of time.

The loan against property documents required are as follows:

  • Your KYC
  • Documents of the property that need to be mortgaged.
  • Proof of address
  • Bank account statements
  • Income tax return
  • Salary slips

The banks offer two types of rates for Loan against Property:

  • Floating Rate: The rates vary according to the market conditions. It is not fixed.
  • Fixed Rate: In this the interest rate is same for the entire tenure period.

The loan against property interest rate of various banks is as follows:

  • HDFC bank: 65%
  • SBI: 30%
  • United Bank of India: 75%
  • Federal Bank: 90%
  • Yes Bank:50%
  • South Indian Bank:70%
  • Bank of India:65%
  • IDBI Bank:20%
  • ICICI Bank: 15%
  • Andhra Bank: 75%
  • Kotak Bank:60%
  • Punjab and Sind Bank: 30%
  • Dhan Laxmi Bank: 68%
  • Karnataka Bank: 90%
  • Indian Overseas Bank: 90%
  • Canara Bank: 70%
  • Personal Loan is unsecured loan whereas mortgage loan is unsecured loan.
  • The tenure for Loans against property is higher as compared to the personal Loan.
  • The EMI for personal loan is higher as compared to the mortgage loan. This is beneficial for people who cannot pay higher EMIs.
  • The personal loan does not require any property as a collateral since it is an unsecured type of loan whereas the mortgage loan requires collateral.

The rate of interest for Loan against Property is lower as compared to the personal loan. Therefore, Loan against Property is one of the most preferred forms of loan

The following are the mortgage loan types:

  • Loan against Property Top up: In this type of loan you can get an additional amount of loan on your Loans against property.
  • Loan against Property Overdraft: In this type of loan the interest rate is charged only on the principal outstanding and the borrower can deposit the leftover money in the bank account at any other time.

After you have done your research on mortgage loan and have selected the bank from which you want the loan the mortgage loan process will soon follow:

  • Fill the application form online or offline by visiting the bank. Give the necessary details to the branch manager and fill the application form carefully.
  • Once you have filled all the essential details in the form the lender will ask calculate the eligibility of the loan and will give the loan options to you.
  • The loan options will include interest rate, required documents, charges of processing and lock in period.
  • If your eligibility requirement is not met according to the bank then the lender will ask you to submit additional documents or add a co applicant for your loan.
  • After this there will be a meeting arranged between you and the lender where you will have to submit the photocopy of certain documents.
  • These documents will include KYC, income documents and property documents.
  • After this process the legal and technical verification will start.
  • For telephonic verification he will give you a call.
  • For residential verification he may visit your office or any other residence provided by you.
  • Once the verification is successfully conducted and the results are positive, your loan will be sanctioned.
  • Can NRIs take the Loan against Property?

Yes, NRIs can take the Loan against Property. However, they need to verify some other documents for availing the loan.

  • What is meant by market value of a property?

The market value of a property means the amount of money that a person can get by selling the property in the current situations.

  • Can the money obtained for Loan against Property be used for business purposes?

Yes, you can use the money for any of your business as well as personal activities.

Just make sure that you do not use the money for any illegal activities.

  • Can only residential properties be used for Loan against property?

No, you can get the loan by mortgaging either your residential or your commercial property.

  • Can the Loan against Property be prepaid?

Yes, the interest as well as the principal amount can be prepaid before the tenure period.

  • Which bank is best for Loan against Property?

Citibank is considered to be the best bank for Loan against Property as it offers very low rates of interest.

  • What are the different charges for Loan against Property?

Apart from mortgage interest rates, the bank charges the following charges:

  1. Foreclosure fee: You need to pay this fee if you decide to close the loan before the tenure period ends.
  2. Processing fee: You need to pay this fee when you apply for the loan. You can bring down the processing fee with negotiation.
  • How should you select a bank for Loan against Property?
  1. Check the rates of interest of various banks.
  2. The best offers on processing charges.
  3. Service quality
  • Is the CIBIL score important for Loan against Property?
  1. It is one of the most important thing in Loan against Property.
  2. It indicates a very good track of repayment.
  3. A bad CIBIL score will increase the chances of rejection.
  4. Therefore, it is very important make the payments timely and hence maintain a good CIBIL score.
  • Can I be eligible for the Loan against property even with a bad CIBIL score?

Yes, you are eligible for Loan against property even with a bad CIBIL score although you need to pay a higher rate of interest with it.

  • Can I apply for Loan against property with my spouse?

Yes, you can apply for loan against property with your spouse.

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