Loan Against Property Eligibility Check

You may be eligible for property loan in India from one or more banks if you meet the following eligibility conditions:

Parameters	Eligibility Criteria
Minimum and Maximum Age	Individuals with minimum age of 21 years and maximum upto 65 years Note: However, there are few banks which also give loans to individuals of 18 years and /or individuals up to 70 years of age.
Loan Tenure	Banks give loan upto a period of 15 years depending upon your age Note: However, some banks may not offer a loan against property for more than 7 years or 9 years. Only selected banks offer mortgage loan up to 20 years.
Net Monthly Income	Banks prefer minimum income of ₹ 40,000 for salaried persons and ₹ 3 Lakh p.a for self employed Minimum FOIR is 60%. FOIR is fixed obligations to income ratio. Fixed obligations include existing EMI on other loans, proposed EMI and rent. In cases, where income is more than ₹ 40,000, banks offer loans up to a maximum FOIR of 65%
Employment Type and History	Loan against property rate of interest are typically in the range of 7.90% to 15.15% per annum For salaried applicants, minimum work experience required is 3 years For self employed, business existence of minimum 5 years and ITR of 3 years is required Note: Eligibility conditions for self employed may be different from that of salaried customers Also, note that mortgage loan rates may be higher for a salaried customer as compared to a self employed or a business men. The reason is that salaried customer tend to take a loan for personal purposes while self employed borrower are more likely to take a this type of loan for business purposes.
LTV	Banks typically give mortgage loan for a LTV of 60-70%. The LTV ratio differs by type of property. LTV ratio is highest for loans taken against residential property, while LTV ratio is lowest for loan against commercial property. For industrial property – 50 - 55% For residential property – 60 - 75% For commercial property – 60 - 70%
CIBIL Score for Loan against property	Banks gives loan based on market value or registered value of the property, whichever is lower. Bank consider 650 and above credit score to be eligible for mortgage loan

Once you have done complete research on the loan offers available in the market and have shortlisted the bank from where you want to take loan, you go through the following steps to complete your loan process and get a loan sanction

• Firstly, fill the online loan application form or visit the branch where you will have to fill a loan application. The bank representative will ask for your basic loan requirements (loan amount, tenure, income level etc) and ask you to fill personal, occupation and income details in the application form.
• On the basis of information provided by you, lender will calculate your loan eligibility and give you loan options as per your requirements like interest rates, processing charges, required documents, lock in period etc. In case your eligibility does not match as per the bank, the lender advise you either to submit some additional documents or to add co-applicant to increase your eligibility.
• Post filling application and the above discussion (which can be tele-discussion), lender will arrange a meeting with you to collect photocopy of your documents which include KYC, income documents and property documents and will also discuss about property approval process. A bank representative will come and collect the documents from the address specified by you. At this stage the bank may also collect the processing fees and other legal and technical charges from you.
• Bankers will initiate the legal and technical verification. He can also give a call on your residence number for tele - verification and visit your residential address or office to check the information provided by you is authentic. Bankers will visit the site for property verification and come out with property evaluation report which gives an estimated market value of the property as well as feedback that the property has a clear title, complete set of documents and has no technical deviations. The bank will confirm your loan amount eligibility based on the above assessment.
• Once the bank gets satisfactory results from the above checks, it will approve your loan, issue a sanction letter and proceed towards initiating the disbursement process. At the time of disbursement, you have to submit original property documents as well mortgage registry document duly signed and registered to the bank. Mortgage registry process can take 4 to 5 working days. Bank officials or rupeebazaars representatives will assist you at each step of the process.

Mortgage loan process can be cumbersome. However, with continuous assistance and doorstep services of the bank as well our representatives, we have managed to make the process of getting mortgage loan easy and customer friendly for our valued customers.

• Purpose: Some of the basic purposes for which this loan is granted include vacation or travel, higher education, wedding, medical treatment, credit card payment and many more. Banks specify the purpose for which they are willing to grant this loan.
• Key Features:
  • Age of the borrower: Loan available for both salaried and self-employed profesionals within the age group of 21 and 60 years
  • Loan Amount: In the range of ₹ 9,000 to ₹ 75 Lakh.
  • Loan Tenure: Can range from 1 to 72 months.
  • Interest rates: Loan Against Property Interest Rates starting from 10.45%.
  • Loan Against Property EMI: Lowest EMI of ₹ 2,147 per lakh.
  • Work Experience: Up to 3 years of total experience.
  • Processing Fees: Up to 2% of loan amount.
  • Documents Required: Address Proof, Identity Proof, Income Documents.
  • Special Schemes: Banks offer customized Loan Against Property interest rates and schemes for salaried borrowers working in government, defense, private or MNC companies. Banks offer Loan Against Property to self employed professionalslike Doctors, CA, CS, Architects. Top banks has also launched special loan schemes to pensioners up to an age of 76 years.

✅ 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.

• Signed Application Form
• Identity Proof (PAN)
• Residential Address Proof
• Form 16
• Latest 6 months salary slip for salaried
• Last 6 months bank statement
• Last 2 years ITR

Documents Required	Individuals	Firms, Partnerships
Identity Proof	PAN card, Passport, Driving License, Aadhar Card, Voter id, Govt issued i-card	PAN card, Passport, Driving License, Aadhar Card, Voter id, Govt issued i-card
Certificate and Proof of Business Existence		PAN , sales tax/ excise/ VAT/ service tax registration, Copy of partnership deed, Trade license, certificate of practice, registration certificate issued by RBI, SEBI
Address Proof	Passport, Driving License, Election ID card, Electricity/ Telephone/ Mobile bill/ bank statement (not more than 3 months old)	Bank statement, utility bill, Registry copy, lease or rent agreement, TAN allotment letter
Age Proof	PAN card, Passport, Driving License, Voter id card, Birth certificate, Employee ID card (only for PSU/ Government employees), School/ college leaving certificate	PAN card, Passport, Driving License, Voter id card, Birth certificate, Employee ID card (only for PSU/ Government employees), School/ college leaving certificate

It is easy to avail mortgage loan online by comparing loan against property interest rates, processing fees and other loan terms and conditions of all banks. It is advisable to follow the following steps to get a hassle free, lowest cost and most transparent property loan.

Step 1 : Check loan eligibility and EMI

Once you decide to take a property loan, estimate your loan amount eligibility to know the loan amount you will be eligible for and can apply for. Also, calculate the monthly EMI that you can easily repay based on your current net income and other existing fixed obligations including rent and EMIs on other existing loans, if any. Your loan eligibility is calculated based on your age, net income, existing obligations, property type, LTV ratio and other factors. EMI is dependent on the loan amount, interest rate and tenure.

Step 2 : Check property approval status and legal documents

The property against which loan is to be taken is required to have a clean title, all statutory and government approvals as well as complete set of property documents. Some of the property related documents that a lender will require are: Registered Sale Deed/ Conveyance/ Lease Deed, Past Sale Deeds Chain (each transaction in respect of this property since first allotment), Latest House Tax Return/ Receipt, Approved Building Plan from Municipal Corporation etc. Hence, choose the property with all records and clean title for taking a loan against. Also loans against residential properties are easy to get with a low rate of interest and should be first choice of property for this loan option.

Step 3 : Decide on type of mortgage loan interest rate offers

Once you have a sense of your eligibility and the property you can borrow against, you can proceed to check the various mortgage loan offers of different banks for different products. Key aspects of interest rate offers that need to be checked are:

• Choice between fixed and floating rates. Fixed rates come at a slightly higher rate of interest compared to floating rate loans and interest rate remains constant during the tenure of property loan. In floating rate loan, interest rates are reset at periodic intervals in response to changes in repo rate and PLR rates. Majority of loan against property in India today are floating rate loans as it allows the interest rates on LAP to move in accordance with the current interest rates.
• You can also evaluate the option of overdraft facility with property loan. The overdraft facility allows to you to deposit surplus amount in your Loan against property overdraft account when available and hence, reduce your overall interest amount outgo and also shorten your loan tenure. This loan is highly recommended to self employed businessmen who generally have surplus cash lying idle at home. The interest rates on overdraft loan is slightly higher than that of a regular mortgage loan interest rates.

Do mortgage loan interest rate comparison of the banks on various types of mortgage loan products and take an informed decision.

Step 4 : Compare other charges and loan parameters of the shortlisted banks

Banks also charge other additional fees on property loan in addition to LAP interest rates, so you should know all the additional fees and charges with a Loan against property which include prepayment charges, processing fee, insurance premium and other charges applied by the shortlisted banks.
You can take the help of loan advisors of online marketplaces like rupeebazaars.in to be able to get complete details on loan against property rates, fees and charges of all banks and take an informed decision.

Step 5 : Select the bank based on other service related parameters

When you decide to take a loan you should also look after other services and transparency related parameters of the chosen banks. Some of these factors are turnaround time offered by the banks, quick loan delivery, doorstep services, transparency in the loan process. You also need to understand the trends and changes in repo rate over a period of time. Last but not the least, read reviews of existing customers on websites, about interest rates and transparency to make a firm decision of borrowing loan from a bank.