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5 Things You Should Know Before Apply for a Loan Against Property

  • 28-Feb-2022

A loan against property is a well–known financing product & it comes under the secured loan category. These loans are borrowed against pledging own collateral/security, the applicant can use these funds for multiple purposes whether it is a personal requirement, business needs & any other purposes.

Loans against property are offered by several banks & financial institutions at competitive rates. Based on property value, lenders determine loan amounts. Generally, lenders provide 70-90% of property value as a maximum loan amount. However, there are various factors measured to evaluate applicant eligibility on the loan amount. 

Here are 5 things you need to know before you apply for a loan against property:

Rate of Interest- As compared to a personal loan where the rate of interest is generally high, the interest rate for loans against property is much lesser.  rate of interest ranges from 8% p.a. to 25% p.a.

Additional Charges- there may be a service charge that the bank charges from an applicant at the time of application of loan. Verify these before the loan application. Check-in case charges are one-time or to be paid monthly. If charges are monthly then they have to pay in consideration of your EMIs.

Documents to be read carefully-you have to look through the documentation of the agreement carefully. You have to read essential documents before signing the documents of the loan for mutual trust and satisfaction.

Valuation of Property- loan against property pledges against security. Before deciding the loan amount and eligibility criteria, the lender will evaluate your property. The amount will depend on the market value.

Repayment Ability- loan against property is particularly evaluated when there is a need and requirement for a high amount of money. The approval of the loan will depend on your salary income and ability to repay. EMI and tenure will be decided according to your income. That is a maximum of up to 15 years.


Loan Against Property Eligibility

A Loan against property helps an applicant to maintain their business and personal requirements. 

Eligibility criteria for a loan against property depend on factors such as monthly salary, age of an applicant, Credit Score and work experience, etc.

For Salaried Individuals

  • Age Limit for Salaried Individuals - 28 to 60 years of age
  • Work experience for salaried Applicants – Minimum 3 Years
  • Should be at public, private companies or MNC
  • CIBIL Score will be above 750
  • Nationality - Indian

For Self-Employed Individuals

  • Age Limit for Self–Employed Individuals - 25 to 70
  • CIBIL Score will be above - 750
  • Minimum Years of existing Business - 3-5 Years
  • Nationality -Indian

Note: - Maximum Loan Amount for Salaried Individual can avail up to 1 Cr & for Self- Employed Individual it can avail up to 3.5 Cr. Also, the eligibility criteria for loan against property differ from bank to bank.


Loan Against Property Interest Rate

A loan against property is a secured loan that can help an applicant for their needs & requirements to be fulfilled.  such as the form of property which an applicant likes to pledge for loans to meet their several needs. The amount of loan you can avail up to Rs.25 crore for a tenure of a minimum of 20 years with loans against property. Given the below Rate of interest depends on various factors.

  • Type of property
  • Documentation
  • Income
  • Credit history
  • Nature of work
  • Current market value for a property
Interest rate7.00%
Processing fee1%
Loan amountUp to 25 Crore
Loan tenure15 years

Also Read:- Business Loan for Startup

Interest loan of loan against property by top banks/ NBFCs

State bank of India8.45%
UCO Bank9.40%
Union Bank of India9.80%
United Bank of India10.75%
URGO Capital11.00%
Kotak Mahindra Bank7.25%
IndusInd Bank9.00%
Punjab National Bank8.70%
Aditya Birla finance ltd 10.00%
YesBank Ltd8.00%
South Indian bank ltd10.70%
Standard chartered bank7.50%
PNB Housing9.00%
Indian bank8.80%

Note- Above interest rates are based on current market research.


Why apply for Loan Against Property via Financeseva?

Financeseva allows you to compare & choose the best deal offered by top banks & financial institutions for loan against property. Some of the benefits you can avail applying through financeseva.

  • Comparison among top banks & NBFCs rates & benefits
  • For online applications get up to Rs.5,000 on the disbursement
  • Get maximum loan up to 5 crores
  • Avail tax benefits on loan

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