A Loan Against Property is a secured loan against a person's property. It is a loan provided by banks or non-banking financial institutions (NBFCs) in which the borrower puts their property as collateral for the loan amount. This loan is generally used for significant expenses like house renovations, business expansions, or investments. It is a popular type of mortgage loan in India.
A borrower may get a loan of up to 70% of the property's worth. Before an individual applies for a loan against property, they should be fully aware of the loan against property interest rates, eligibility and process.
The loan against property interest rates provided by different banks and NBFCs are mentioned below:
|
Bank and NBFCs |
Interest Rates (p.a.) |
|
Bank of Baroda |
10.85% – 16.50% |
|
ICICI Bank |
10.85% – 12.50% |
|
Bank of India |
11.35% onwards |
|
Bajaj Housing Finance |
8.50% – 18.00% |
|
Federal Bank |
12.60% onwards |
|
Central Bank of India |
12.15% – 14.25% |
|
HDFC Ltd. |
9.35% – 12.25% |
|
Indian Bank |
10.00% – 12.60% |
|
L&T Housing Finance |
9.60% onwards |
|
IDFC First Bank |
8.75% – 16.25% |
|
India Shelter Finance Corporation Ltd. |
15.00% – 24.50% |
|
PNB Housing Finance |
8.99% – 13.00% |
|
Kotak Mahindra Bank |
9.15% onwards |
|
Axis Bank |
9.90% – 10.35% |
|
Punjab National Bank |
10.40% – 12.75% |
|
Karur Vysya Bank |
11.13% – 14.03% |
|
State Bank of India |
10.90% – 11.30% |
|
UCO Bank |
10.95% – 12.10% |
|
LIC Housing Finance |
9.70% – 12.85% |
|
Union Bank of India |
10.50% – 13.15% |
|
Tata Capital Housing Finance |
9.85% onwards |
To be eligible for a Loan Against Property, one must meet the following requirements:
Apart from these, the lender will also consider the property's market value before proceeding with the loan application.
The applicant has to provide the following documents while applying for a Loan Against Property (LAP):
Any individual who meets the eligibility criteria can apply for the loan application process. One can apply for the Loan Against Property application online or by visiting the bank branch.
The online application process for Loan Against Property (LAP) is mentioned below:
Lenders will use the applicant’s credit score to determine the repayment behaviour of the applicant. A poor credit score indicates that a person is a high-risk borrower who may struggle to repay the loan. As a result, to balance the risk of default, lenders may charge a higher interest rate on a LAP or can even reject the application.
The interest rates applied on your loan also depend on the borrowed amount and tenure. The larger the loan amount - the higher the monthly installments, which the borrower may find difficult to pay. In such instances, the lender will demand a higher interest rate to compensate for the loan's risk.
Loan Against Property interest rates will also be determined by the property's appraised value. The higher the property's appraised value, the better the chances of receiving a lower interest rate.