Apply – Loan Against Property
How LoanUncle Works
Search & compare
You research as per your needs and compare all loans in 1 step
You take time to browse and choose, then submit your contact details
Expert calls you to help you with the loan and to verify the details.
Get Offers from Banks
Once verified, get offers from Banks & decide whether to proceed
LOAN AGAINST PROPERTY (LAP)
There are times when we are in an urgent need for money and do not have enough cash handy with us. That is when we start wondering, “From where do I get the money?” Well, there are many ways of arranging the money, and taking a loan against your property is a wise choice if you have enough resources. Now, what is it? Click HERE to know more.
LOAN Against Property INTEREST RATES
To lend a helping hand to our visitors, LoanUncle has consolidated all the necessary information regarding current rate of interest on home loans provided by popular banks at one place.
|HDFC Ltd||9.40% onwards|
|ICICI Bank||9.50% onwards|
Loan Against Property Information
A loan against property (LAP) means exactly what one can make out from its name. One can avail this type of loan by mortgaging their property. For example, it allows you to take a loan against your house. The loan is given as a certain percentage of the property’s market value, ranging usually from 40 to 60 percent of the concerned property. But this depends upon the bank, You can get even get as much as 70 percent of the market value of the property you are taking the loan against, in banks like State Bank Of India. This type of loan falls under the category of ‘secured loans’, which means the borrower has to give a guarantee to the bank by mortgaging his or her property.
Reasons To Take A Loan Against Property
You can take a loan against property for various reasons, some of them being
● Acquiring new property
● Repaying an existing loan
● Using it during medical emergencies
● For educational purposes
● Expanding your business
● Other personal uses
Features and Benefits of Loan Against Property
Loan Against Property allows you to enjoy a number of benefits through its amazing features. You can avail a higher amount of loan for a longer period of time, and that too at attractive rates. Also, this type of loan can be approved easily and quickly.
You can take this loan against any kind of property, commercial or residential. Adding to this, the interest rates in this type of loan is quite low, making the process all the more easy for the borrower as he can take higher amount of loans. The funds from Loan Against Property can be used for various purposes, ranging from business to personal, thus making it one of the most
flexible kinds of loan.
The borrower can choose from overdraft facility and EMI based loan. This type of loan is specially designed for self-employed individuals, so that they can broaden their business.
Amount Limit for Loan Against Property
The maximum percentage that one can get when availing Loan Against Property is as follows
Self Occupied – 65%
Vacant – 55%
Rented – 55%
Self Occupied – 50%
Vacant – 40%
Rented – 40%
These are the average values in the industry and this varies from bank to bank and the variance can be in the range of 5-10% property.
Loan Against Property Documents Required
When it comes to documentation, banks differentiate between people on the basis of the nature of their employment. The three categories are salaried professionals, self-employed professionals, and self-employed non-professionals. Note that requirements vary across banks; the following list constitutes those documents that are most often mandatory.
|DOCUMENTS||SALARIED||SELF EMPLOYED PROFESSIONAL||SELF EMPLOYED NON PROFESSIONAL|
|Application form with photograph duly signed||✓||✓||✓|
|Identity, residence and age proof||✓||✓||✓|
|Last 6 months bank statements||✓||✓||✓|
|Last 3 months Salary-slips||✓||✓||✓|
|Processing fee cheque||✓||✓||✓|
|Form 16 / Income Tax Returns||✓||✓||✓|
|Proof of business existence||✓|
|Education qualification certificate and proof of business existence||✓||✓|
|Last 3 years Income Tax Returns with computation of Income||✓||✓|
|Last 3 years CA Certified / Audited Balance Sheet and Profit & Loss Account||✓||✓|
The eligibility criteria is different in different banks. However, here are the common factors that determine you are eligible for avail a Loan Against Property.
● Cost or value of the property against which the loan is disbursed. By this we mean that how much value the property you are taking loan against, holds. If the bank finds it suitable, you’ll be given a loan.
● The borrower’s income, savings and debt obligations. Your previous debts, income and savings matter too in this case, just to be sure.
● Your repayment track record for other loans, credit cards, etc. The bank makes sure that
your loan clearing history is clean.
● The borrower should be either of these: a. A salaried individual with a permanent government job or is working in a reputed company. The minimum age needs to be 21 years in this case.
b. A professional in any field (doctor, engineer etc.) and
c. A self-employed businessman.
In other words, the bank will check your income as a whole.
● The bank will also check the number of people dependent on you
HOME LOAN BALANCE TRANSFER
Home Loan Balance transfer: Feeling the interest burden of your existing home loan? Relax! Transfer your home loan to a lower interest rate with a Home Loan Balance Transfer. Further, you also have the option of a Top-Up loan over and above the balance you transfer.
Just by switching you existing home loan from higher interest rates to lower interest rate lender can save you thousands or sometimes in lakhs. And it really don’t mean saving the interest. You can anyway use the same at anything. After all, securing a home loan is not the end of journey.
Once the balance amount will be transferred to lower interest rates, the EMI will automatically gets lower. Here you go. A penny is saved is a penny earned.
To know how LoanUncle could help you in it. Email us at hello@LoanUncle.org
FREQUENTLY ASKED QUESTIONS – FAQS ON HOME LOAN
How do I go about acquiring a Home Loan in India?
This is where LoanUncle steps in. For no charge, we are available to guide you through the entire process of availing of the loan most suited to you.
1. The first step, of course, is to choose your property;
2. Make sure all the property’s documentation is in order;
3. Make sure all your documentation as a client is in order using LoanUncle’s documentation guide as an aid;
4. Calculate your eligibility through LoanUncle’s eligibility guidelines;
5. Do your research about the different lenders who might be willing to provide you with a loan. for this, you may seek quick help from LoanUncle by calling quick query center;
6. Compare loan possibilities from different financial institutions, and choose and apply for the one most suited to you;
7. Wait for your bank to check your documents and credit scores, sanction your loan, and send you an offer letter;
8. Revert with an acceptance letter, agreeing to the terms and conditions of the loan;
9. Submit the originals to all your documents to the bank.
10. And that’s all! Then your lender disburses your loan amount and this process ends.
Does the agreement for sale have to be registered for me to obtain a Home Loan?
Yes. The registration takes place at the office of the sub-registrar appointed by the State Government under the Indian Registration Act, 1908.
What security/collateral must I provide to avail of a Home Loan?
Your collateral could be in the form of one or more guarantors or your life insurance policies. You may also offer a surrender value in the form of shares, which should be equal to the loan amount.
Who can be a co-applicant to my Home Loan?
The co-applicant/co-owner of your property is someone who’s financial assistance you seek to pay your loan. The usual co-applicants are one’s spouses, parents, or children.
Can I pay off my Home Loan before time?
Yes, prepayment of home loans is allowed. This is executed when you pay up a lump sum. Generally, no penanlty is levied by banks on prepayment of home loan.
What additional charges will I have to incur to obtain a Home Loan?
Processing Fee – this may either be a percentage of the loan amount or the bank’s predetermined fixed amount;
Commitment Fee – this is levied if you are unable to repay your loan within the determined tenure;
Pre-payment Charge – this amount will not exceed 5% of the loan;
Miscellaneous Charges – some banks may levy charges for documentation screening, consultation, etc.
What is the tax benefit on Home Loans?
The first benefit you obtain is upon repayment of the principal amount. It is considered under Section 80C of the Income Tax Act, with a maximum tax deduction of Rs.1,50,000. Furthermore, upon repayment of the interest, you can avail of tax benefit on the interest amount under Section 24 of Income Tax Act, with a maximum limit of Rs.2,00,000.
Some other property loans include:
Loan Against Property Balance Transfer – for when you find a Loan Against Property with interest rates lower than your existing Property Loan, and use this new loan to pay off the previous one;
Home Loan Balance Transfer – for when you find a Home Loan with interest rates lower than your existing Home Loan, and use this new loan to pay off the previous one;
Home Improvement Loan – for house renovation;
Home Extension Loan – for when you’re planning to expand your house by, for example, adding a new room or wing;
Land Purchase Loan – for when you want to invest in land, whether to build a structure on it in the future or not;
Loan Against Property – for when you need cash to invest in business or elsewhere against the property you have.
FREQUENTLY ASKED QUESTIONS (FAQS) ON LOAN AGAINST PROPERTY
Q. What is LAP?
LAP or Loan Against Property is the disbursal of loan by mortgaging one’s property.
Q. Why do I take LAP and not Personal Loan?
It is up to you, really. But if you have a property and are okay with mortgaging it, then this definitely is the better option as the interest rates are much lower than that of personal loans.
Q. What kind of property can be used to avail LAP?
You can use commercial or residential property, like a house or a piece of land.
Q. What are the interest rates and what is the maximum tenure period for LAP?
The normal interest rates range from 12% to 16%. You can take this loan for up to 15 years.
Q. What is the processing fee charged by the bank?
Most of the banks charge a processing fee of only 1% of the amount sanctioned.
Q. What are its benefits?
You can take higher loan amounts for a longer period of time and can use it for your own needs, personal or commercial.
Q. Which is the best bank for availing an LAP?
Nationalised banks like SBI and UBI are always preferable when you take a loan.
Q. What is the maximum age limit for taking an LAP?
The maximum age limit varies from bank to bank, the average being 60to 70 years.