Loan Against Property (LAP), also known as mortgage loan, is given against the mortgage of a property, which remains with the bank/lending institutions till the loan is repaid. This property can be residential, commercial or industrial. You can get a higher loan amount at a lower interest rate starting from 7% p.a. on the Loan Against Property. Banks/lending institutions usually sanction mortgage loans between 50% and 70% of the market value of the property, which you can easily pay in EMIs for up to 20 years. Like unsecured personal loans, this Loan Against Property can also be availed to meet personal as well as business needs, excluding risky activities. Read these articles to know how to get loan against property, how to take loan against property or loan against property.

Benefits of Loan Against Property

These vary from bank to bank/loan institutions and loan schemes. However, some of the common benefits of mortgage loan are given below:

  • Flexible End Use : Like a personal loan, a loan against property can be          used to meet personal and business needs, barring risky activities.

  • Higher loan amount : This is a secured loan as it is given against the             property and hence you get a higher loan amount easily.

  • Lower interest rate : The interest rate applicable on secured loans is          lower as compared to unsecured loans. This makes a loan against                 property cheaper and a better option than a personal loan.

  • Flexible Tenure : The tenure of the Loan Against Property is usually up     to 20 years, giving you the flexibility of low EMIs and easy repayments.

  • Balance Transfer Facility : Mortgage loans also have a balance transfer        facility, which allows you to transfer your existing mortgage loan to             another bank / lending institution at a lower interest rate or better loan         terms.

  • Required documents

    While applying for a mortgage loan, the bank/lending institution asks you to submit certain documents to assess your repayment capacity and to ensure that all the information provided by you is correct. These documents may differ from bank to bank/lending institution. The documents may also differ depending on the loan scheme you have applied for, the type of resident you are and the type of employment you have. However, the list of documents required to apply for Loan Against Property is given below:

    Benefits of Business Loan
  • Duly filled application form

  • Identity Proof (Passport Copy / Voter ID Card / Driving License / PAN           Card)

  • Residence Proof (Ration Card / Telephone Bill / Electricity Bill / Rental         Agreement / Passport Copy / Bank Passbook or Statement / Driving          License)

  • Age Proof (PAN Card/Passport/Any other certificate from Statutory       Authority)

  • Income tax return of last 3 years

  • Processing fee check

  • Documents related to the property that is deposited as collateral

  • Bank/Loan Institution Minimum interest rate Processing Fee (GST not included)
    Bank of Baroda 10.85% 1% of the loan amount (minimum ₹ 8,500 and maximum ₹ 1.5 lakh)
    ICICI Bank 10.85% Mexico
    Punjab National Bank 10.40% 0.75% of the loan amount (minimum ₹ 2,500 and maximum ₹ 1 lakh)
    HDFC Bank 9.35% Up to 1.50% of the loan amount or ₹4,500, whichever is higher
    State Bank Of India 10.60% 1% of the loan amount (Maximum ₹ 50,000)
    Bank of India 11.35% 1% of the loan amount (minimum ₹ 5,000 and maximum ₹ 50,000)
    Union Bank of India 10.25% Up to 1% of the loan amount (minimum ₹ 5,000 and maximum ₹ 1 lakh)
    Axis Bank 9.90% 1% of the loan amount or ₹10,000, whichever is higher