Loan against property- Know in detail!

Loan against property interest rates

What is Loan Against Property (LAP)?

A loan against property (LAP) is exactly what the name implies -a loan granted or disbursed against the mortgage of property. The loan is given as a certain percentage of the property’s market value, usually at around 40 per cent to 60 per cent.

Loan against property was essentially a domain of foreign and private banks. They offered the product to fund their self-employed customers’ business-related needs. Lately, all banks are offering this product including the public sector banks.

Now, with Loan Against Property, you can leverage your property’s equity to expand your business, meet your working loans against property

capital requirements or fulfill any other personal or professional needs. Usually, loans are granted up to 60%-70% of the 

property value.

Before taking the loan, the borrower needs to sign a declaration stating the end-use of fund.

Loan Against Property Eligibility Check – Who can opt  for Loans Against Property?

Individuals (Salaried or self-employed) who have a property and who can fulfill the following requirements  

  •  Income
  •  Age (Min. 21 Years and Max. 50 to 70 years- depends on the lender)
  •  Property Valuation
  •  Existing Liabilities (if any)
  •  Current Work Experience
  •  Financial Documents
  •  Number of Dependents

What is the process for Loan Against Property?

The process for loan against property is pretty much similar to the home loan process.

  • Application
  • Processing
  • Documentation
  • Verification/Valuation
  • Sanctioning of the Loan
  • Disbursement

What are the documents required for loans against property?

For Salaried:

  1. Application form with photograph
    2. Photo Identity and Address Proof
    3. Latest Salary Slips
    4. Form 16
    5. Bank Statements (Last 6 months)
    6. Processing fee cheque

For Self-Employed:

  1. Application form with photograph
    2. Photo Identity and Address Proof
    3. Proof of business existence & Education Qualifications.
    4. Last 3 years ITR
    5. Last 3 years P&L and Balance Sheet
    6. Bank Statements (Last 6 months)
    7. Processing fee cheque

Loan against property interest rate calculator

Loan against property interest rate calculator helps you get the approximation of the loan amount you are eligible for and the interest rate at which you can borrow the loan against your commercial or personal property. The rate of interest for the loan is based on the customer’s profile, which covers company name, salary, credit history, etc. Loanyantra helps you calculate the exact tenure and loan amount, emi amount. Just sign in and fill, and get the right product information from

When can you go for loan against property option ?

  • To meet the credit needs of trade, commercial activity, other general business/profession, as also for their bona fide requirements.
  • To meet educational expenses of family members including near relatives
  • To undertake repairs/renovation/extension to the residential/commercial property.
  • To purchase / construct residential house/flat, purchase of plot of land for construction of house/ premises for business/commercial use.
  • For Repayment of existing loans availed from other Banks / FI’s conforming to the extant guidelines regarding  “takeover” of account.
Loan against property interest rates
Loan against property interest rates

What you should know about tax benefits for Loan against property, LAP?

  •  There are no tax incentives while paying the EMIs, unlike in the case of home loans. However, this is only in the case of a salaried person.
  • A businessman can claim tax deduction on the entire interest amount paid on the loan if he can prove that the loan was genuinely used to improve his business. This tax advantage is also available if the businessman takes a loan against gold or shares/securities that he owns. The interest rate for a loan against shares or securities, such as the PPF and NSC, varies from 12-15%, while that for gold ranges between 14% and 25%. In the case of the former, a lender will be willing to offer a loan that is 40-60% of the value of the securities, while for a gold loan, you will be able to get 50-70% of the value of the gold you pledge.
  • If you are already under a home loan and need money for children’s education or marriage, top-up loan is the best option though the interest rate is a little high. But if you are not under a home loan and have an own house, then Lap is the best when compared to personal loan. Because, the interest is lesser (similar to home loan), longer tenure, less or no processing fees.
  • If you default, the bank will sell the pledged shares or gold to recover its dues, which is a smaller loss than losing your home. However, if you need a large amount of money that runs into lakhs, the only viable valuable asset that you may be able to pledge is your house.

Different Banks Interest Rates for Loan Against Property: (As on 4th September 2015)

Loan Against Property is a secured loan which means it is offered only when you keep freehold residential property with the bank as security. Personal loan interest rate is allocated according to the customer’s salary, the amount being borrowed, and other criteria

Banks up to 30 lacs 30-75 lacs 75 & above Processing fees
HDFC 12.75% 12.75% 12.75% 1%+ service Tax
Ing vysya 12% to 13% 12% to 13% 12% to 13% 1%
ICICI Bank 12.05% 12.05% 12.05% 1% + service tax
Axis Bank 13.15% 13.15% 13.15% 1%
SBI 12.60% 12.60% 12.60% (Upto 1 Cr) else 12.85% 1%
PNB HFL 12.25% – 13.00% 12.25% – 13.00% 12.25% – 13.00% 1%
FedBank 13% 13% 13% 1% + service tax
India Bulls 12.50% 12.50% 12.50% 1%+service Tax
DCB 13.50% 13.50% 13.50% 1% + service Tax or Min 5000/-
Standard Chartered 11.75% 11.75% 11.75% 1%+ service tax
Citibank 11.5% (Fixed for 2yrs) 11.5% (Fixed for 2yrs) 11.5% (Fixed for 2yrs) 0.50%
IDBI Bank 11.50% 11.50% 11.50% 10000 + service tax
Deutsche Bank 11.75% to 13% 11.75% to 13% 11.75% to 13% 1% + service tax
Cent Bank 14.25 N.A N.A 1% of the loan amount
HSBC 11.20% – 11.70% 11.20% – 11.70% 11.20% – 11.70% 0.50%
DHFL 13.75% 13.75% 13.75% 1.5% + Taxes.
LIC HFL 12.50% 12.50% 12.50% 0.50% + service tax
Fullerton 15.5% 15.5% 15.5% 1% of the loan amount
Reliance 13.50% 13.50% 13.50% 1%
Edelweiss 13.25% 13.25% 13.25% 1% of the loan amount
Bank of India 11.70% 11.70% 11.70% 1% of the loan amount Max. Rs.50000
Tata capital 12.50% – 13% 12.50% – 13% 12.50% – 13% (Upto 1Cr)

then 13% – 13.50%

1% + service tax
Magma housing finance 14% – 14.50% 14.50 % 14.50 % 1.25% + service tax
Kotak 12.5% to 13% 12.5% to 13% 12.5% to 13% 1%
Chola Mandalam 13.75% 13.75% 13.75% 1.5%
HDBFS 13.75% 13.75% 13.75% 1%
Bajaj Finserv 13.50% 13.50% 13.50% 1.50%

Disclaimer : This site does not take any responsibility for any sudden / uninformed changes in interest rates.

3 thoughts on “Loan against property- Know in detail!”

  1. Whenever you are ready to get a loan against property just go to a bank and gather information about the loan. Some them will provide you much more information about the loan. And they will give you the best budget according to your need. You can also collect information from bank websites. Nice to see all the information available on one website.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.