✅ Which bank is best for loan against property?
is the best bank for taking a loan against property based on its current mortgage loan rates as the bank offers low interest rate of 8.75%.
Best Banks for taking mortgage loans based on processing fees are:
Jammu And Kashmir Bank charges the lowest processing fees of 0.20% as a % of loan amount. Federal Bank caps the processing fees to a maximum of ₹ 7,500 irrespective of the loan amount
✅ How can I apply for Mortgage loan?
You can apply for loan in several ways. You can directly visit the bank branch and meet the sales person, contact a loan agent or apply online at any bank or NBFC’s website. You can also check and compare best mortgage loan interest rates in all banks online at rupeebazaars and apply for loan.
✅ What is the difference between home loan and Loan Against Property?
A home loan is availed to buy or construct a new residential property. While, loan against property can be availed for any reason. Under home loan, the property you want to buy is transferred to the bank as collateral as and when they provide you with the loan. However, in case of loan against property, you submit your already owned property as collateral, and it can be either a residential property, commercial, land or industrial property. The lowest interest rate on home loan is 8.10%. However, in case of loan against property, you submit your already owned property as collateral, and it can be either a residential property, commercial, or industrial property. The lowest rate on mortgage loan 7.90%.
✅ What is Mortgage loan?
A mortgage loan is a type of loan in which borrower is required to mortgage any type of property to the lending institution like it basically act as security against loan if in case someone fails to pay back the loan then the remaining amount can be raised by selling that property.
✅ What is the minimum and maximum tenure of loan against property?
These are generally taken for a longer period of time. The loan tenure for loan against property ranges from 1 years to 20 years.
✅ What is the downside to a reverse mortgage?
There are losses associated with home loans like the higher interest rate and a burden on heirs due to reverse mortgage loans.
✅ What is a reverse mortgage in simple terms?
A reverse mortgage is a mortgage loan, generally secured by a residential property that helps the individual to access the unencumbered value of the property. The loans are typically provided to older homeowners and do not require monthly mortgage payments.
✅ What are the charges for Loan against property?
In addition to mortgage interest rates, banks charge the following fees on loan
- Processing fee: This fees is charged when you apply for a loan. The processing fee can range between 0.50 -1% of the loan amount and can be negotiated down, if you bargain. If you approach the bank through an online market place like www.rupeebazaars.in, we will assist you in negotiating with the bank and also, get attractive cash backs on sanctioned loan amounts. Sometimes, we also get to offer exclusive loan schemes on behalf of the banks such as nil processing fees for our valued customers.
- Foreclosure fee: This fees is charged when you decide to close your loan before the completion of loan tenure. Banks charge nil prepayment penalty on individuals having floating rate loans. You also need to read the terms and conditions of your loan agreement carefully to check on the prepayment clause and ensure that it is not too strict compared to market benchmarks.
- Other Charges: Banks charge legal and technical fee from the borrower which are explained at the time of loan processing.
✅ Is CIBIL Score for LAP important?
CIBIL score is also one of the important factor to get the loan. Good CIBIL score indicates a strong repayment record and hence, banks can offer you higher loan amount at lowest mortgage loan interest rates. Bad CIBIL Score could mean higher chances of rejection of your loan or getting a loan with high interest rates. So, it is important to make all your payments on time and maintain a good CIBIL score to get best Loan against property rates.
- Service quality, especially post sales service quality
- Current best offer on processing charges as these tend to vary from time to time
- Add-on features – like DBS maxgain facility and Citibank Home Credit facility – these help borrowers to save interest by parking surplus funds temporarily in the account and paying interest on net difference between loan amount and surplus parked temporarily
✅ How to get loan against property without income proof?
To get a loan against property without income proof, you can consider using any of the following ways:
- You can add a co-applicant who has a good credit history and proper income documents.
- You can explain your income to the bank representative in detail if you do not have an ITR form. The bank statement can prove to be a useful tool in this regard.
- Justify your reason of not filing ITR with a genuine reason, and also consult a tax consultant.
- If you are continuously practicing good banking habits, then it can prove to be in your advantage.
- You can also choose to accept a lower loan to value and avail the loan instead of getting your loan application rejected.
✅ How do I calculate the interest rate on my Loan against property taken some time back? Has it gone up or down in case of floating rate loans?
In case of floating rate loans
- Most fixed rate loans would offer fixed interest rate for a period ranging from 1 year to 10 years. Fixed rate loan tenure is lesser than the maximum tenure of the loan. From your sanction letter and loan agreement, check the period for which the interest on your loan is to remain fixed. If your loan is still in the fixed rate period, your current rate of interest is same as what it was originally taken at
- In case your loan has converted to floating rate, the loan agreement would specify the formula for the same. The formula may be either MCLR/RLLR rate plus a given spread (in case of banks) or PLR minus spread (in case of NBFC). For MCLR or RLLR rate plus spread loan, just read the spread mentioned in the loan agreement and add it to the current MCLR or RLLR/EBR rate of the respective bank. For PLR minus spread loan, check the negative spread mentioned in the loan agreement and subtract it from the PLR of the respective bank or NBFC. You can find the current MCLR rate or PLR of your bank or NBFC at Current MCLR Base Rate and PLR.
✅ What are the property documents required by Banks?
You will need to submit copies of the following property documents
- Past title chain – Conveyance deed, sales deed, allotment letter, possession letter
- Copy of approved plan for construction/ extension
- Latest property tax receipt
- Receipt of advance payment towards purchase of property in case of resale or booking with builder
✅ Can I apply for loan against property jointly with my spouse?
Yes, you can apply jointly with an earning co-applicant (either be your spouse or your parents). Adding a co-applicant can increase your eligibility and you can also avail for a higher amount of loan as your co-applicant’s income also gets added to your income and that total is taken into consideration for calculating the loan amount you will be eligible for.
✅ Does it affect my co-applicant if I default in mortgage loan?
Yes, if you fail to pay the loan on time then it will also affect your co-applicant as default in loan will affect his/her CIBIL rating as well.
✅ Can I take top up on my existing Loan against property?
Yes, you can avail top up on an existing LAP only if you have made timely repayment of EMIs accrued on existing Loan against land. The interest rate charges on top up loans are 0.25 – 1% higher than a property loan and can be availed with minimal documentation
✅ Why is a Top up loan a better alternative compared to other loans?
Taking a top up loan on existing Loan against property has the following benefits
Lower interest: Interest charged on top up loan is comparatively lesser than the interest charged on a personal loan.
Lower EMI: As tenure is higher and interest rate is lower on LAP loan compared to personal loan, the EMI for top up Loan against property is lower than that on a personal loan.
Higher loan tenure: In case of a top up loan you will get the loan tenure equal to tenure outstanding on your existing loan.
Pre payment penalty: No pre payment penalty is applicable on top up loans.
Tax exemption: There are no tax benefits for repayment of this loan.
✅ Am I eligible for a Loan against property despite a poor credit score?
Yes, you may be eligible for this loan even with a bad credit score. But, the lenders may charge a higher rate of interest on your loan and may ask you to apply for loan along with a co-applicant who will be equally responsible for making timely loan repayments.
✅ What is the difference between Personal loan and Loan Against Property?
A personal loan is an unsecured loan, while loan against property is a secured loan. To avail of a personal loan, you are not required to submit any collateral, which is why it’s interest rate is comparatively high. Whereas you need to submit any property of yours as collateral to avail loan against property, and its interest rate is comparatively lower than an unsecured loan.
✅ Can I get a loan against property with any existing loans?
Usually, lenders ask about the status of your existing loans when you apply for a Loan against property. This is done to assess the eligibility of paying out EMIs on your loan in the future. If your payment history is good, then the lenders may give you the option of taking top up loan on your existing Loan against property . The bank may also offer you a new LAP if it feels that your current income levels can support additional EMI repayments and hence, you can be eligible for a new LAP loan.