Loan Against Property

Property as collateral towards Business Loans and for procuring working capital

requirements.

A Loan against Property is easy to procure because it is secured in nature. Banks usually

maintain a margin while sanctioning a Loan against Property. This margin usually ranges from

50-90% of the value of the property (also known as LTV or Loan-to-Value). This facility is also

popular because the borrower can utilize the property in spite of mortgaging it in favour of the

bank. Generally, no end use is verified by the lenders.

Key lenders are ICICI, HDFC, PIRAMAL Finance, TATA and PSU banks

Interest rate statarting from 8.50% pa

Tenure up to 15 years

Loan Against Property Eligibility Criteria

Some of the Elgibility Criteria when applying for a Loan Against Property are as follows

 Income of borrower/ co borrower/ family

• Age (min. 21 years)

• Property current market value

• Existing Liabilities (if any)

• Current Work Experience

• Financial Documents

The eligibility for LAP is calculated on basis of either the percentage of property current market

value that you want to mortgage with lender and the amount of income you have to enable you to

return the EMI on the Loan. So you can get Loan against property upto annex % of property

value and the net amount that you earn after other EMI has been deducted from your net income

Loan against Property is given on the below mentioned property types and the percentage of loan

you can get is given below:

Loan Against Property – For a Residential Property( property should be with in Municipal

Limits non agriculture) Resi. Property includes flats also. Flats of housing bords, DDA ,

other Govt Authorities and reputed builders can be considered for LAP

Self Occupied – 75% of Property Value

Vacant – 55% of Property Value

Rented – 55% of Property Value

Loan Against Property – For a Commercial / Property( property should be with in

Municipal Limits non agriculture) In case if CLU is there property may be considered.

Self Occupied – 50% of Property Value

Vacant – 40% of Property Value

Rented – 40% of Property Value

This varies from Bank to Bank by 5 – 10% of the above mentioned percentages.

In order to calculate how much you would be estimated to pay, most banks use a formula which

is given below.

Loan Against Property for Salaried Individuals:-

{(NTH – Obligation) * 60%} / EMI per Lac

Loan Against Property for Self Employed Individuals:-

{(NTH – Obligation) * 65%} / EMI per Lac

Whichever is lower from the value of the property or your income- that loan amount will be

given to you.

Other Eligibility Criteria Revolves Around the Maximum Age of The Person Applying For

The Loan

For Salaried employees – 60 Years

For Self-Employed – 70 Years

Documents Required for Loan Against Property