Loan Against Property

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Features of Loan Against Property

loan against propertyLoan against property is a loan provided by the banks against the property owned by the borrower. The loan amount depends upon the value of the property. It is a secured loan and the customer needs to pledge its property as collateral. The property can be commercial as well as residential. By availing a loan against property, you can fulfil the requirement of finance easily.

If a person is not eligible for a personal loan due to low salary, he or she can easily take a loan against property.

Loan against property can be taken for the following reasons:

  1. To expand business
  2. For medical treatments
  3. For marriage
  4. For education expenses
  5. To fund a dream vacation.

Features and Benefits of a Loan Against Property

The availability of higher loan amount along with the flexibility to use the loan amount for multiple purposes makes LAP a better option compared to any other loan. Following are some of the features and benefits of a Loan Against Property:

  • The loan is a secured loan, available against a self-owned residential property.
  • It can also be availed against rented residential properties.
  • Anyone can avail a LAP by mortgaging his commercial properties like an office building, shops, etc.
  • It can be taken against a plot of land owned by the borrower.
  • Interest paid for the Loan Against Property provides tax benefits under Section 37 (1) of the Income Tax Act, 1961.
  • The LAP is available for both salaried and self-employed individuals.
  • The rate of interest is comparatively lower to personal loans.

Loan Against Property Eligibility Criteria : 

The eligibility criteria for a Loan Against Property are as follows:

  1. The applicant must be an Indian citizen.
  2. Monthly Income should be Rs.25,000. One can also add a co-applicant to increase his loan eligibility.
  3. He/she should not be more than 70 years of age.
  4. He/She should be at least 21 years at the time of submission of the LAP application
  5. The applicant must have been employed by the current organisation or should have been involved in the current business for at least 3 years.
  6. Applicant must have an excellent credit score.

Check the eligibility and documents required to avail a LAP.

Loan Against Property Documents Required

The documents required to avail a Loan Against Property are:

  • Form 16 and salary slips for salaried applicants.
  • ITR filings of past 3 years and financial statements of business for self-employed applicants.
  • Complete, duly-filled application form.
  • 2 coloured passport sized photographs.
  • Identity and Address proofs.

Interest Rates on Loan Against Property

The Loan Against Property Interest Rates varies from one lender to another. It also depends upon the location of the property. Various Banks and NBFCs offer LAP at affordable rate of interests. Some of the major lender’s rates are given in the table below:

Name Of The Bank Loan against property Interest Rates

State Bank Of India (SBI)

14.95%-15.20%

HDFC

12.65%- 12.90%

AXIS Bank

10.15%

ICICI Bank

13.25%

DHFL

10.50%- 11.50%

Bank of Baroda

13.25% – 14.0%

Reliance Consumer Finance

10.50% – 11.50%

HSBC

10.75% – 12.00%

ICICI

10.75% – 11.75%

Loan Against Property EMI Calculator

Equated Monthly Instalments or EMIs are the monthly fixed amounts that are required to be paid by the borrower by a fixed date to the financial institution/lender as a means of loan repayment. Calculating the EMI in advance is beneficial as it helps the borrower to calculate his payment options and plan the finances accordingly. This calculation can be done easily by using the Loan Against Property EMI Calculator, an online tool which is free of any cost.            

The LAP EMI Calculator, available on DialaBank.com can be used to calculate your monthly EMI while availing a mortgage loan. By providing various details of the loan regarding its amount, applicable interest rate and loan tenure, you can calculate the monthly instalment to be paid.

Charges Applicable on a Loan Against Property

While availing a LAP, certain charges are charged by the lenders to process the loan amount. These amounts are not fixed for all the lending institutions and may vary according to various aspects: 

  • Processing Charge: It is a necessary fee charge payable at the time of LAP application. A processing fee charge is essential to be paid irrespective of the status of the application in the future.
  • Foreclosure and Prepayment Charges: If the borrower is eligible and wants to pay off the complete loan amount before the end of the tenure period, it is called foreclosure. On the other hand, if the borrower decides to pay a part of the loan amount before end tenure, it is termed as prepayment. For both prepayment and foreclosure, banks levy a certain amount of charge on certain categories.
  • Other Charges: include documentation charges, stamp duty, technical evaluation fee, etc.

How to Apply for a Loan Against Property

Applying for a loan against property is easy with DialaBank. Just follow the steps mentioned below to avail the lowest rate of interests on LAP:

  • The applicant has to visit the website dialabank.com.
  • Fill in a simple form on the website regarding your name, contact number, location, etc. and click on Request a Quote.
  • Wait as our relationship manager will soon get in touch with you over your LAP application over your provided number.
  • The relationship manager will provide you with all the options available in the market after evaluating your requirements and eligibility.
  • Your loan will be disbursed within hours of applying with us.

FAQ’s About Loan Against Property

✅ Can I apply for a Loan Against Property if it is a joint property?

Yes, you can apply for a LAP provided that the co-applicant of the loan is the joint owner of the property as well.

✅ Is there a fee for Loan Against Property?

Yes, there are various charges levied by the banks/NBFCs. It includes basic processing fee, charges to evaluate the property and charges for the legal verification process.

✅ How will I know if my Loan Against Property application is approved?

Using your application reference number, you can track the status of your application on our website or can also get in touch with our relationship manager to know the status of your application process. Rest assured, you will receive a confirmation message on your provided contact number once your loan is approved,

✅ What is the interest rate for the Loan Against Property?

The interest rate for LAP varies significantly from one lender to another.

✅ How is the value of the property estimated?

The market value of the property is calculated using legal procedures, after which you will be eligible to avail a LAP according to the price of the property.

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