Loan Against Property

Loan Against Property

Overview

Property is the most important asset of an individual. In urgent time it can be more than an asset to you. Loan against property is given against Commercial, Residential, Industrial property. It is a secured loan offered against mortgage of property with less interest and longer who can proofread my paper essaywritingservicehelp co uk please proofread my paper edit my research paper repayment option.  For business expansion or set up, dream wedding, or any needs one can take loan against property. This loan is for purchasing any commercial property also. This type of loan fulfill any one’s business requirements or at any important need of life.

All Residential, Commercial and Industrial property are accepted for this loan. The loan amount depends upon the value of the property. This loan is EMI based. Some lenders offer overdraft facility also. As this is EMI based the borrower must have a heady judgment from which lenders the loan will be taken and also the interest rates.

The self employed people can opt for this loan against property. If they want to set up a new business or need large amount of money for any reason they can opt for a loan without giving it on rent or selling it. The property will be in mortgage. The loan amount varies from around 40-70% of the property’s market value. There are no restrictions on expenditure like some other loans.

The borrower must have property in his or her name to apply for this loan. Joint application is also approved by some lenders. Our associate banking partners, HDFC, ICICI, Standard Chartered Bank, Axis, PNB Housing Finance Limited have this type of loan packages. This type of loan can save you at difficult time. You can take for such reasons:

  • To expand your business
  • For your child’s higher education
  • For urgent medial treatments
Advantages
Loan against property has some advantages which draw attention of the borrowers. These are
  • It is cheaper than personal loan.
  • It is both EMI based & overdraft Loan
  • It is offered both for salaried and self-employed

Loan Tenure :- 3 to 15 years.

Processing Fee :- A processing fee is usually 0.05% to 3% of the loan amount and is payable upfront. This fee however will be deducted from the disbursal amount payable to you.

Loan Against Property Interest Rates :-   10.30% to 16% p.a.

Easy Repayments: 
    1. Through ECS (Electronic Clearing Service) based on standing instructions to your bank
    2. PDCs (Post Dated Cheques) drawn on your Savings/Salary account
Features:
  1. Avail of these loans against the security of your property – residential or commercial
  2. Get maximum finance against your property
  3. Whether you are salaried or self employed, we cater to all your needs
  4. The loan amount can be who can proofread my paper essaywritingservicehelp co uk please proofread my paper edit my research paper repaid in simple EMIs as per the tenure you choose
  5. Lease Rental Discounting (LRD) schemes
  6. BALANCE TRANSFER OF LOAN AGAINST PROPERTY & TOP-UP
Key Features of Balance Transfer & Top-Up
  • Transfer your loan to a lower interest rate
  • Top up amount which you can utilize for your needs.
  • Simple documentation and speedy processing
You should go for Loan Transfer if:
  • You are just trying to reduce your interest rate and lower your payments.
  • You are just trying to reduce your Loan term to pay off your loan faster.
  • You want to use the equity in your house to get money for any of your needs. You can take a top-up over the existing loan to get the much needed cash to fulfill your needs.

Eligibility Criteria

Loan Against Property eligibility is dependent upon various factors. A few of them are listed below –
  • Income
  • Age (min. 21 years)
  • Property Valuation
  • Existing Liabilities (if any)
  • Current Work Experience
  • Financial Documents
  • Number of dependents

Eligible for LAP is calculated on the basis of either the percentage of property value that you own and the amount of income you have to enable you to return the EMI on the Loan. So you can get Loan against property up to annex % of property value and the net amount that you earn after other EMI has been deducted from your net income.


  
Loan against Property is given on below mentioned properties and the % that you can get loan is listed below.
Residential Property:-Self Occupied – 85%Vacant – 65%Rented – 65% Commercial Property:-Self Occupied – 60%Vacant – 50%Rented – 50%
This varies from Bank to Bank in 5- 10% of above.To calculate how much you can pay its looked by most banks in the below mentioned ways
For Salaried:-{(NTH-Obligation)*60%}/EMI per Lac For Self-Employed:-{(NTH – Obligation) * 65%} / EMI per Lac
Whichever is lower from the  value of the property or your income- that loan amount will be given to you.The other criteria are-Max. Age:-For Salaried – 60 Years  & For Self-Employed – 70 Years

Documents

  • Documentation for Loan Against Property 

    General documents

    1. Photo of all Applicants / Co-Applicants / all Directors / Partners and Property owner.
    2. Pan Card of all Individuals, firm & company.
    3. Address Proof of all Individuals, Firm and Company.
    4. Company Profile, Networth Certificate
    5. Professional Degrees

    Papers Property:

    Salaried

    1. Last three month Salary Slip
    2. Latest 3 year ITR with Form 16.
    3. Bank account statement with salary credit.
    4. Appointment Latter
    5. All Rent Agreement
    6. Bank A/c Statement of Last six months (Individual saving A/c)
    7. Bank account statement with Rental credit

    Private Limited Company

    1. List of Director & Shareholding on company’s letter head or CA`s letter head as on date.
    2. MOA of Pvt Ltd Company.
    3. 3 year Financials with all Annexure, Schedule, Audit report and Form 3CD, 3CB
    4. All Rent Agreement.
    5. 5 Bank account statement with Rental credit
    6. Individual ITR with Computation of income of Last 3 Years of all directors.
    7. Bank A/c statement of Last 12 Months (Current A/c)
    8. Bank A/c Statement of Last three months (Individual saving A/c)
    9. Latest copy of Vat / Sales Return

    Partnership Firm

    1. List of Partners & Share on firm’s letter head or CA`s letter head as on date.
    2. Partnership Deed of firm.
    3. 3 year Financials with all Annexure, Schedule, Audit report and Form 3CD, 3CB
    4. Individual ITR with Computation of income of Last 3 Years of all Partners.
    5. All Rent Agreement.
    6. 6.Bank account statement with Rental credit
    7. Bank A/c statement of Last 12 Months (Current A/c)
    8. Bank A/c Statement of Last three months (Individual saving A/c)
    9. Latest copy of Vat / Sales Return

    Proprietorship Firm

    1. Individual ITR with Computation of income of Last 3 Years.
    2. 3 Year Financials with all Annexure, Schedule, Audit report and   Form 3CD, 3CB
    3. Bank A/c statement of Last 12 Months (Current A/c)
    4. All Rent Agreement.
    5. Bank account statement with Rental credit
    6. Latest copy of Vat / Sales Return.
    7. Bank A/c Statement of 12 Months ( Individual saving A/c)

    Take over Documents

    1. Sanction Letter of Previous Loan.
    2. Six Month Track Record.
    3. Latest loan amount outstanding Letter.
    4. List of Property documents issued by previous Bank.
    5. list of document mortgage in the bank(LOD)
    6. Closer latter

    All Documents should be Self Attested by Applicant or Co-Applicant


Process

Step 1 – Choose the  lenders.

Step 2 – Determine your Loan Eligibility .

Step 3 – Get ready all your required documents.

Step 4 – Apply for Loan by filling the application form with all requisite documents.

Step 5 – Verification -The lender will verify the information and documentation provided by you along with checking your credit history. The lender can also ask for additional documents.

Step 6 – After verification and credit check lender calculate  your eligibility and get  the loan Sanction.

Step 7 – Once loan get sentioned lender issue a sention letter with all  terms and conditions.

Step 8 – Applicant sign the loan agreement and give post-dated cheque or ecs for repayment.

Step 9 –Disbursal of loan.

Interest Rates

Banks/Rates Loan against property Interest Rates
Residential Commercial/ Industrial Processing FeesNegotiable
ICICI Bank 12.00% to 13.50% 13.25% to 14.50% 0.5% to1%
HDFC Bank 12.50% to 13.50% 13.50% to 14.50% 0.5% to1%
IDBI Bank 12.00% to 13.50% 13.50% to 14.25% 0.5% to1%
Kotak Bank 12.50% to 14.50% 13.50% to 14.75% 0.5% to1%
India Bulls 12.00% to 14.50% 13.25% to 14.75% 0.5% to1%
Bajaj Capital 12.00% to 13.50% 13.00% to 14.25% 0.5% to1%
Cholamandalam 13.00% to 14.50% 13.50% to 14.50% 0.5% to1%
Citi Bank 11.50% to 13.50% 13.25% to 14.50% 0.5% to1%
Standard Chartered Bank 11.50% to 13.75% 13.15% to 14.50% 0.5% to1%

FAQs

What is a mortgage loan?

A mortgage loan is a secured one offered against mortgage of property with less interest and longer repayment option.

 Can I avail this loan for my residential property?

 Yes, you can avail this loan against your residential property. This loan is also given against Commercial and Industrial property also.

 Who can apply for a mortgage loan?

 Banks offer mortgage loan to both salaried and self-employed people.

What factors of the applicant does the bank study for a mortgage loan?

To determine the eligibility criteria the bank studies the factors such as income, age, property value, existing liabilities, current work experience, financial documents and how many dependents does the applicant have.

 How much amount can I take in LAP?

The bank provides around 60-85% value of your registered property. The bank takes into consideration other factors such as property type and value.

Will the bank determine the value of property?

Yes, the loan provider would determine the value of the property through a property valuation method.

Is there any difference between a home loan and Loan against property?

Yes, Home loan is only given for purpose of buying a home or construction of home while the loan provider offers Loan against property for any purpose.

How many stages are till final disbursement of the loan?

Loan approval takes time, though it depends on the type of a loan. The stages are application, processing, documentation, verification, sanctioning of the loan and disbursement.

 Does the bank charge any processing fee and other charges?

Yes, the bank charges a processing fee and other charges. It may vary bank to bank.

Which documents do I need to keep ready at the time of application?

If you are a salaried one, the bank will ask for application form with photograph, identity and address proof, latest salary slips, form 16, last 6 months bank statement, processing fee cheque, etc. The self-employed needs to submit application form with photograph,  Identity and Address Proof, Proof of business existence & Education Qualifications, Last 3 years ITR,  Last 3 years P&L and Balance Sheet, Processing fee cheque, etc.

How many days would it take for final disbursement?

It takes one week to 10 working days. If your profile and documentation is clear, it may take less days.

Do I need to reinsure the property?

Yes, you need to reinsure the property against any natural and man-made damages.

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