|Bank||Loan Against Property Rate||Processing Fee|
|SBI Loan Against Property||9.20%||1.00%
Max Rs. 50,000
|HDFC Loan Against Property||8.75%||0.25%|
|ICICI Bank Loan Against Property||10.15%||1.00%
Min Rs. 5,000 - Max Rs. 10,000
Min Rs. 10,000 - Max Rs. 10,000
Min Rs. 5,000
|PNB Housing Finance||9.80%||1.00%|
|Standard Chartered Bank||10.10%||1.00%
Min Rs. 10,000
Max Rs. 10,000
|Bank of India||10.65%||1.00%
Min Rs. 5,000 - Max Rs. 50,000
|Indian Overseas Bank||10.85%||0.62%
Min Rs. 890 - Max Rs. 8,900
|United Bank of India||10.75%||1.00%|
Min Rs. 500
|Punjab and Sind Bank||11.30%||1.00%
Min Rs. 2,000 - Max Rs. 50,000
|Jammu And Kashmir Bank||12.20%||0.20%|
|Central Bank of India||11.10%||0.50%
Max Rs. 20,000
|Piramal Housing Finance||10.10%||0.50%|
Max Rs. 45,000
|Union Bank of India||11.50%||0.50%|
|Karur Vysya Bank||12.15%||0.50%|
Min Rs. 10,000
Min Rs. 15,000
|LIC Housing Finance||11.30%||0.25%
Max Rs. 25,000
Min Rs. 5,000 - Max Rs. 50,000
|IDFC First Bank||11.80%||1.00%
Min Rs. 5,000
Min Rs. 2,670 - Max Rs. 80,100
Max Rs. 10,000
Min Rs. 7,500
|South Indian Bank||10.70%||0.50%|
|Lakshmi Vilas Bank||11.65%||1.20%|
Min Rs. 3,000 - Max Rs. 7,500
|Dhan Laxmi Bank||11.55%||1.50%
Min Rs. 10,000
From 1st October 2019, loan against property has been linked to external benchmarking which is based on repo rate. Most of the banks have already linked their mortgage loans to Repo Linked Lending Rate i.e. RLLR.
RBI has also brought NBFC’s under the purview of the RBI’s Banking Ombudsman scheme. This will help speedy resolution of disputes between customers and NBFC’s and give a window to the customers to submit their grievances.
Loan against property is another name of mortgage loan and is available for both salaried and self-employed borrowers to help them fulfil their business and personal needs by mortgaging their property.
Some of the basic purposes for which this loan is usually taken are expanding business, acquiring assets, education needs, marriage, etc. The loan is granted against the mortgage of the residential/commercial/industrial property. The end use of the loan should be from the uses allowed by the bank. The borrower is required to declare the end use of the loan in its application form.
|Purposes for which loan against property is a good option||Purposes for which loan against property is not a good option|
|Business expansion||Home purchase|
|Child Education||Home construction|
|Personal expenses such as wedding or vacation||Home renovation|
|Medical emergency||Plot purchase|
Points to remember are:
You may be eligible for property loan in India from one or more banks if you meet the following eligibility conditions:
|Minimum and Maximum Age||Individuals with minimum age of 21 years and maximum upto 65 years
Note: However, there are few banks which also give loans to individuals of 18 years and /or individuals up to 70 years of age.
|Loan Tenure||Banks give loan upto a period of 15 years depending upon your age
Note: However, some banks may not offer a loan against property for more than 7 years or 9 years. Only selected banks offer mortgage loan up to 20 years.
|Net Monthly Income||
|Employment Type and History||
Note: Eligibility conditions for self employed may be different from that of salaried customers Also, note that mortgage loan rates may be higher for a salaried customer as compared to a self employed or a business men. The reason is that salaried customer tend to take a loan for personal purposes while self employed borrower are more likely to take a this type of loan for business purposes.
Banks typically give mortgage loan for a LTV of 60-70%.
|CIBIL Score for Loan against property||
Banks gives loan based on market value or registered value of the property, whichever is lower.
Note: In case of low CIBIL score, you can be eligible for few banks or NBFCs with some additional conditions like higher interest rate and higher margin
It is easy to avail mortgage loan online by comparing loan against property interest rates, processing fees and other loan terms and conditions of all banks. It is advisable to follow the following steps to get a hassle free, lowest cost and most transparent property loan.
Step 1 : Check loan eligibility and EMI
Once you decide to take a property loan, estimate your loan amount eligibility to know the loan amount you will be eligible for and can apply for. Also, calculate the monthly EMI that you can easily repay based on your current net income and other existing fixed obligations including rent and EMIs on other existing loans, if any. Your loan eligibility is calculated based on your age, net income, existing obligations, property type, LTV ratio and other factors. EMI is dependent on the loan amount, interest rate and tenure.
Step 2 : Check property approval status and legal documents
The property against which loan is to be taken is required to have a clean title, all statutory and government approvals as well as complete set of property documents. Some of the property related documents that a lender will require are: Registered Sale Deed/ Conveyance/ Lease Deed, Past Sale Deeds Chain (each transaction in respect of this property since first allotment), Latest House Tax Return/ Receipt, Approved Building Plan from Municipal Corporation etc. Hence, choose the property with all records and clean title for taking a loan against. Also loans against residential properties are easy to get with a low rate of interest and should be first choice of property for this loan option.
Step 3 : Decide on type of mortgage loan interest rate offers
Once you have a sense of your eligibility and the property you can borrow against, you can proceed to check the various mortgage loan offers of different banks for different products. Key aspects of interest rate offers that need to be checked are:
Do mortgage loan interest rate comparison of the banks on various types of mortgage loan products and take an informed decision.
Step 4 : Compare other charges and loan parameters of the shortlisted banks
Banks also charge other additional fees on property loan in addition to LAP interest rates, so you should know all the additional fees and charges with a Loan against property which include prepayment charges, processing fee, insurance premium and other charges applied by the shortlisted banks.
You can take the help of loan advisors of online marketplaces like myloancare.in to be able to get complete details on loan against property rates, fees and charges of all banks and take an informed decision.
Step 5 : Select the bank based on other service related parameters
When you decide to take a loan you should also look after other services and transparency related parameters of the chosen banks. Some of these factors are turnaround time offered by the banks, quick loan delivery, doorstep services, transparency in the loan process. You also need to understand the trends and changes in repo rate over a period of time. Last but not the least, read reviews of existing customers on websites, about interest rates and transparency to make a firm decision of borrowing loan from a bank.
Mortgage Loan Process
Once you have done complete research on the loan offers available in the market and have shortlisted the bank from where you want to take loan, you go through the following steps to complete your loan process and get a loan sanction
Mortgage loan process can be cumbersome. However, with continuous assistance and doorstep services of the bank as well our representatives, we have managed to make the process of getting mortgage loan easy and customer friendly for our valued customers.
Types of Loan against property
Regular Loan against property: This is the most common loan taken by a borrower to fulfill any kind of business and personal needs which may include loans for:
Lowest interest charged on Loan against property is 8.15%. All banks and NBFCs provide property loan for these purposes: like for loan against residential property, while only selected banks offer loans against commercial property. Financing companies are typically more open to extend loans against residential property. Very few NBFCs and bank offer loans against industrial property.
Loan against property Overdraft: Overdraft facility is availed by the borrowers who expect to have surplus income or fluctuating income during the year. This facility allows you to deposit the available surplus amount for any period which can be as short as few days in your Loan against property account and reduce your interest liability. This option is highly suitable for self employed businessmen or professionals who have fluctuating funds requirements throughout the year.
Loan against property Top Up: Top up loan is an additional loan amount that you can avail on your existing Loan against property. Top up can be taken either from the existing bank or can be availed at the time of transferring your outstanding property loan amount from one bank to other bank to avail low interest rates. The LTV cap on Loan against property is applied to calculate your eligibility on a loan amount. This means that the amount of top up loan plus your existing mortgage loan outstanding should be less than or equal to 70% of the market value of the property. Top up amount eligibility may vary from bank to bank based on your income and value of the property and needs a thorough comparison.
Interest rates, LTV and processing fee can differ by type of property. The following table compares the key terms of various types of property loan offers by type of property.
|Type of properties and conditions||Industrial Property||Commercial Property||Residential Property|
|Interest rate||10.85% - 13.35%||9.20% - 15.15%||8.15% - 15.15%|
|Loan to value (LTV)||40% - 65%||40% - 75%||40% - 75%|
|Processing fee||0.20% - 1.00%||0.20% - 2.00%||0.20% - 2.00%|
|Income Proof for Salaried||6 months payslip, ITR of last 2 years, 2 years Form 16, 6 months bank statement showing salary credit||6 months payslip, ITR of last 2 years, 2 years Form 16, 6 months bank statement showing salary credit||6 months payslip, ITR of last 2 years, 2 years Form 16, 6 months bank statement showing salary credit|
|Income proof for Self employed||ITR of last 3 years, VAT/ service tax registration, business address proof, financial statements certified by CA, copy of partnership deed and proof of business existence and business profile||ITR of last 3 years, VAT/ service tax registration, business address proof, financial statements certified by CA, copy of partnership deed and proof of business existence and business profile||ITR of last 3 years, VAT/ service tax registration, business address proof, financial statements certified by CA, copy of partnership deed and proof of business existence and business profile|
|FOIR||0.65||0.65||0.55 - 0.65|
|CIBIL||650 and more||650 and more||650 and more|
Mortgage loan EMI is the monthly amount or instalment that you pay every month to the bank or financial institution in order to repay your loan. EMI is composed of principal amount and interest. Interest component in your EMI is higher in early months and gets reduced with each EMI. Similarly, principal repaid is a significantly small component in total EMI in early months and gets higher with each EMI. EMI Calculator helps you to calculate your monthly EMI at desired interest rate for a particular tenure.
EMI depends upon loan amount, interest rate and loan tenure