Finior Financial-Planning for Life and Business

Leverage Your Assets for Financial Empowerment with Loan Against Property!

Loan Against Property (LAP) doesn’t have to be complicated. Discover your residential or commercial property’s hidden potential to fulfil your financial needs with Finior. Get quick approvals, attractive LAP interest rates with minimal paperwork.

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    At Finior, we understand your urgent need for finances. Tailoring the best loan against property options from premium banking and non-banking institutions, we ensure fast LAP approval with minimal documentation. Offering a robust response to your immediate needs of consolidating debts or paying extensive medical bills, we even help you avail a loan against property without income proof and ensure competitive LAP interest rates between 8%-25% p.a. Guiding you to the right financial path, we at Finior furnish flexible repayment options via a comprehensive and comparative EMI analysis.

    Features and Benefits

    Loan Against Property: Features and Benefits

    Following are the key features and benefits of a loan against property:

    • A loan of up to 70% of the property’s market value is offered.
    • Flexible repayment terms make the loan against property rates competitive.
    • Facilitates easy repayments through small monthly instalments.
    • Quick processing, usually 3 to 4 days with minimal documentation.
    • The applicant’s age must be between 21 years to 65 years old.
    • Flexible repayment tenure up to 20 years.
    • Is available on plots, residential property and commercial property.
    • Lower interest rates, starting from 11 percent.
    • A loan amount of INR 5 lacs to INR 7.5 crores can be offered based on the property’s market value.
    • No additional collateral is required.
    • Availability of balance transfer on the existing loan.
    • Minimal prepayment penalties may vary from one bank to another.

    Loan Against Property Overview

    A Loan Against Property (LAP) empowers you to use the funds tied with the property to satisfy any expenses you may have. While the LAP amount offered on the property is determined by its valuation, you have complete discretion over how you spend the funds. Your property serves as collateral for the loan, but you can use it as usual. 

    In short, LAP is a secured loan provided by banks and financial institutions in exchange for a property pledged as security. The pledged asset can be the applicant’s land, house or commercial property. The property stays as collateral with the credit provider unless the borrower repays the debt amount. 

    However, the sanctioned funds are relatively higher, as the borrower can acquire a loan against property for up to 70 percent of the property costs. The loan against property interest rates are also lower than other loans, and its repayment terms are flexible.

    Loan Against Property Eligibility Criteria

    To secure a LAP with utmost ease, you must cope with the lender’s loan against property eligibility criteria. You can also rely on a loan against property eligibility calculator to determine your eligibility for securing a loan. However, the property must be registered in the name of the loan applicant or other family member. 

    Here’s what you need to be prepared with:

    Age Limit of the Applicant 21 to 65 years
    Employment Status
    Salaried Professional, Self-employed Individual
    Annual Income
    At least INR 3 lakh per annum
    Work Experience
    1 year to 5 years
    LAP Interest Rate
    9.8 percent to 16.50 percent per annum
    Maximum Loan Amount
    70 percent of the property’s market cost or to up to INR 7 crore
    Credit Score
    Applicant must have a credit score above 750
    Repayment Time Frame
    15 years to 20 years at maximum

    Factors Affecting Loan Against Property Eligibility Criteria

    Below are depicted the factors that affect the loan against property eligibility:

    Credit History

    Credit history is one of the most vital factors to evaluate a Loan Against Property application. The credit score of the borrower represents the repayment capabilities and credibility. A credit score reflects whether or not a borrower will be able to repay their loan on time. As a result, maintaining a strong credit history is essential.

    Loan Tenure

    A longer loan term allows you to get a loan faster and pay lesser EMIs. If you have a low income, you can always choose lengthier terms because these loans have a shorter term than a traditional home loan. You can count on a loan against property calculator to determine the repayment tenure that best suits you.

    Regular Income Flow

    One of the most important considerations is that the application must have a continuous and constant source of income, ensuring that the borrower has the financial means to repay the loan EMIs.

    Incomplete Property Documents

    Credit history is one of the most vital factors to evaluate a Loan Against Property application. The credit score of the borrower represents the repayment capabilities and credibility. A credit score reflects whether or not a borrower will be able to repay their loan on time. As a result, maintaining a strong credit history is essential.

    Borrower's Age

    The age of the borrower is crucial in establishing the debtor’s ability to repay the debt. The loan must be repaid before the borrower reaches the age of 65. If the debtor has already reached the mid-60s, there are chances of loan application denial. In this case, you may choose to look for loans with a shorter term, which will result in higher EMIs.

    Property Insurance

    Mortgage insurance takes care of the loan repayment, alleviating the financial strain on your family. It also reduces the borrower’s risk in the event of unforeseen occurrences. As a result, it’s always a good idea to get mortgage insurance to protect your financial interests.

    Interest Rates and Other Charges

    The loan amount and the repayment tenure determine the loan against property interest rate. Because a loan against property is a secured finance product, it is feasible to negotiate a lower interest rate based on a variety of circumstances. 

    If you take out a loan for a longer period of time, the interest rate will drop even more. The majority of banks have interest rates that range from 9 percent to 12 percent. To compute approximate values in advance, one can count on loan against property EMI calculator. 

    In addition to interest rates, you have to pay some nominal charges. The below-depicted table provides a better understanding of the applicable charges: 

    Processing Charges Around 1 percent of the loan amount
    Prepayment Charges
    Prepayment charges may vary from one bank to another. Usually, banks charge 2.5 percent of the outstanding amount as prepayment charges.
    Late Payment Charges
    1 to 2 percent of the due monthly instalment
    Bounce cheque Charges
    May vary from INR 250 to INR 550

    Documents Required for Loan Against Property

    Following are the documents required for a loan against property:
    • Bank account statement (last three months)
    • PAN card and Aadhaar card
    • Residence and identity proof
    • Salary Proof (for salaried applicants)
    • Scanned copy of property documents
    • Income tax returns (last two years)
    • Form 16

    FAQs

    Q: Will I get a loan against my property?
    Yes, you can get a loan against property if the property is registered in your name and you have the required set of documents. Additionally, you must be eligible to secure a loan against property.
    Q: Is it possible to apply for a loan against property if it is a joint property?
    Yes, it is possible to apply for a loan against property in the case of joint property. The co-owner of the property will become the co-applicant in the loan application. Additionally, the chances of securing a higher loan amount also increase.
    Q: What is eligibility for a loan against property?
    The loan against property eligibility criteria is quite simple. You must be between the ages of 21 and 65, have a yearly income of INR35,000, a good credit history, and the property must be registered in your name.
    Q: What is the maximum term for which I can avail of a loan against property (LAP)?
    You can avail of a loan against property (LAP) for a maximum of 20 years.
    Q: Is there an application fee for a loan against property?
    Yes, to avail of a loan against property, you need to pay an application fee of 1 percent of the loan amount plus applicable service tax.
    Q: How will I know if my Loan Against Property application is approved?
    On the approval of your loan application, the designated bank executive will get in touch with you for further processing. Additionally, you can check your loan status by visiting the bank’s official website.
    Q: Is the interest rate for the loan against property standards between lenders?
    No, interest rates vary from one lender to another based upon certain factors, such as credit history, loan tenure, income stability, location of the property, and much more.
    Q: What is the maximum loan amount that I can avail of against the property?
    You can borrow up to INR 7 crores against a property. However, the loan amount depends upon the market value of the property.
    Q: Can I get a loan against a plot?
    Yes, you can get a loan against a plot, residential property and commercial property.
    Q: Can a loan against property be availed without income proof?
    Yes, you can get a loan against property without income proof, but you will have to submit other required documents.
    Q: Can a loan against property be availed without CIBIL?
    Banks take the CIBIL score into consideration for evaluating a loan application. If you have bad credit, either your loan application will be rejected, or you will have to pay higher loan interest rates for it.
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