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Home Articles Compare and Apply for a Loan Against Property Online

Compare and Apply for a Loan Against Property Online

IndianMoney.com Research Team | Updated On Wednesday, May 15,2019, 04:29 PM

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Compare and Apply for a Loan Against Property Online

 

 

What is Loan Against Property?

You can avail a loan against property from a bank by pledging property. This is basically a secured loan. Loan against property or LAP can be availed by pledging residential as well as commercial property or a plot of land. The loan is sanctioned by evaluating the market value of the property and a percentage of it (60%-70% of property value), may be sanctioned as a loan.

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Compare and Apply for a Loan Against Property Online

When Should I Consider Taking a Loan against Property?

  • To meet business expenses
  • To meet family obligations like marriage
  • To meet emergency medical expenses
  • To fund a child’s education

Features of a Loan Against Property (LAP):

  • Easy to Avail: It is easy to avail a loan against property as it is a secured loan. The banks provide the loan based on the market value of the property. If your property is located at a prime location, then you are likely to get a loan of 60-90% of the value of the property.
  • Longer Tenure: These loans are sanctioned for a longer tenure and the repayment period ranges from 10 to 15 years. A loan against property is availed by offering your property as collateral with the bank. So, if there is a loan default, then the bank takes possession of the property.
  • Lower Interest Rate: Loan against property has a lower rate of interest vis-a-vis unsecured loans like personal loan. Banks charge a moderate rate of interest on loan against property. However, the rate of interest varies depending on factors like the type of property, location, market value and so on.
  • Flexibility: Various lenders offer flexible loans in this category. The loan against property gives you the freedom to spend the loan amount for any purpose you wish, much like a personal loan.
  • Tax Benefits: Tax benefits can be availed on loans availed for home renovation purposes. 

SEE ALSO: Loan Against Property Interest Rates

Documents Required for Loan Against Property:

Submitting authentic documents is very important while getting the LAP sanctioned. There are different sets of documents that must be submitted by salaried individuals and self-employed people, while applying for a loan against property. Listed below are some of the documents the applicant must furnish, along with loan application form.

For Salaried Individuals:

  • Identity proof and address proof
  • Salary slip of the previous 3 months
  • Bank statement of the past 6 months
  • Form 16 issued by the current employer
  • A cheque covering the administrative costs incurred by the bank while processing the loan application.

Self-Employed Persons:

  • Identity proof and address proof
  • Bank statement of the past 6 months
  • Income tax statement of the past 3 years
  • Business proof: Qualification certificate, partnership deed, last 2 years ITR.

The Process to Apply for Loan Against Property Online or Offline:

Loan against property is taken for various purposes like financing business activities, fulfilling family obligations and emergency expenses. The eligibility criteria for loan against property vary across lenders. If you fulfill eligibility criteria, then you can proceed with the loan application and document submission. To apply for a loan against property, you can either apply online or visit the bank directly.

For the online application process, you can visit the website of the bank. You can apply for a new loan by filling the application form and attaching the relevant personal and property documents. The bank verifies your documents and your loan application and lets you know if the loan is sanctioned or rejected. A customer can also contact the bank’s helpline number for services and queries.

SEE ALSO: What is Meant by a Loan Against Property?

Fees and Other Charges Associated with Mortgage Loan

Loan against property is availed by mortgaging property with the bank. The verification process of this type of loan involves various charges and fees due to factors like valuation of the property, legal scrutiny, processing fees and so on. Listed below are the charges associated with mortgage loans:

  • Processing fees charged are in the range of 0.5 to 1%.
  • Property valuation charges: Generally included in the processing fee.
  • Legal charges: These charges are included in the processing fee and are paid to the lawyer doing due diligence on the property. 
  • Mortgage registration charge: This includes charges incurred on stamp duty and registration charges.
  • Insurance: The mortgaged property must have insurance cover.

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IndianMoney.com Research Team

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