1. Who can avail a loan against property?
    Salaried or self-employed individuals and pensioners can avail a loan against property provided they satisfy the other eligibility requirements. NRIs also would be able to avail loans against property.
  2. I am a Non Resident Indian (NRI). Can I avail a loan against property?
    Yes, there are banks that provide loan against property for NRIs. Please refer to the NRI loan against property page for more information on the same.
  3. What can I use a (Loan Against Property) LAP for?
    You can use a LAP for anything suitable, as it is not tied to a specific end use. But it is necessary to mention the end use of the loan to the bank. Some of the more common end uses include consolidation of existing loans, purchase of land, purchase/ construction of commercial property, marriage expenses, medical expenses, education expenses, business expansion, etc.
  4. What are the types of properties which can be provided as collateral?
    Residential properties like individual houses and apartments and commercial properties like office space and retail space can be provided as collateral. Industrial properties and urban plots in government layouts may also be considered on a case to case basis.
  5. I am one of the holders of my family property. Would I be able to avail a loan against the same?
    Yes, you would be able to do the same.
  6. Can I get a loan against cousin's property?
    Yes, you would be able to do the same by getting your cousin to be a co-applicant for the loan.
  7. Can third party collaterals/ security be used to avail a loan against property?
    No, it is not possible to do the same.
  8. The property is in my mother's/ sibling's name. Would it be possible to avail a LAP using the same?
    Yes, there are some banks which would consider the same for providing a loan against property.
  9. Can a plot be used to avail LAP?
    Yes, if the property is situated in prime residential areas, it would be possible to avail LAP using that.
  10. Is it possible to get a loan against my rental income?
    Yes, there are several banks which provide loans against rental receivables.
  11. Are there any age limits for availing a LAP?
    Normally, the minimum age for availing a LAP is 23 years, while the maximum age for availing the same is 65 years. The maximum age pertains to the age at the time of maturity of the loan. Individuals may be able to apply for the loan along with co-borrowers, in case they don't satisfy the age limits.
  12. I haven't filed income tax returns for the last year. Would I be able to get a LAP?
    Yes, in case of self-employed persons, based on your bank transaction history, you might be able to get a LAP.
  13. If I am currently repaying an existing loan, would it in anyway affect me while getting a new loan against property?
    All your existing obligations would be deducted to calculate your loan eligibility. So your existing loans would affect the maximum loan amount which you would be able to get.

    There is also a possibility of consolidating all your existing loans and your current funding requirement into one new loan. Talk to a Rupeezone expert to know more.
  14. Would it help if I have a co-applicant for the loan?
    A co-applicant would help you in increasing the maximum loan amount which you would be able to avail as both your incomes would be taken into account.
  15. Do I need a guarantor to avail a loan against property?
    In some cases, a guarantor may be required. This also depends on the bank being dealt with.
  16. Do I have to obtain the legal and valuation clearances myself to avail a LAP?
    No, in most cases the legal and valuation clearances would be done by the bank as a part of their process. You need not worry about the same.
  1. What are the prevailing interest rates on loan against property?
    Interest rate on LAP varies depending on the bank.
    For the rates prevailing in the markets now, please refer to the comparison table. Please talk to a RupeeZone LAP expert to know the exact rate that would be applicable to you.
  2. What is the type of interest rate applicable on LAP? Floating/ fixed?
    Usually, the rates offered on LAP would be floating rates only, wherein the rate changes based on the market conditions.
  3. Would the interest rate offered for LAP be a flat rate or a diminishing rate?
    Normally the rates quoted on LAP are monthly diminishing in nature, wherein the interest to be paid is calculated based on the outstanding bank for the month.
  4. What are the charges applicable on a LAP?
    The primary charges on LAP are the processing fee, documentation fee and equitable mortgage fee in addition to the interest charges.

    In case the loan gets closed earlier than the schedule or a part-payment is made, pre-closure charges and part-payment charges might also be applicable, depending on the lender.
  5. What is an equitable mortgage fee?
    Equitable mortgage fee is collected to meet the expenses incurred on hypothecation of the property towards the loan. This varies from bank to bank and is normally in the range of Rs. 5,000 to Rs. 50,000.
  6. Would the processing fee be refunded in case the loan gets rejected by the bank?
    No, as these charges are related to the bank's efforts towards valuation and legal checks on the property, this would normally not be refunded.
  7. What are the minimum and maximum loan amounts possible?
    It varies from bank to bank, but normally the minimum loan amount stands around Rs. 2 lakhs and there is no upper limit on loan amount for loans against property.
  8. What would be the maximum loan amount which I would be able to get as a loan against property?
    The maximum funding provided against the value of the property varies from bank to bank but hovers around the range of 70%, subject to the repayment capacity of the borrower.
  9. What are the tenure options?
    There are no minimum tenure constraints, while the maximum tenure can go up to 15 years depending on the bank you are applying for.

    For NRIs, the maximum tenure possible is around 10 years, though it varies from bank to bank.
  10. Does my EMI/ eligibility change with the tenure of the loan?
    Yes, as the loan gets repaid over a different period of time, both the EMI and the eligibility would change depending on the tenure which you choose.

    EMI would also change in case a part-payment is made against the loan.
  11. How much time will it take for me to get my loan delivered?
    Once all the documents including the property documents are ready, it normally takes around 7 to 10 working days to get a loan against property, though this varies depending on the bank being dealt with.
  12. Are there any tax benefits available for a loan against property?
    No, there are no direct tax benefits available for loans against property.
  13. What are the documents required to avail a LAP?
    The documents needed to avail a LAP are as below.
    For all
    • Documents for KYC norms
      • Identity proof
      • Address proof
      • Date of birth proof
      • Signature proof
    • Property documents

    For salaried persons
    • Latest 3 months pay slip
    • Latest 6 months bank statement
    • Photographs of all applicants
    • Last 3 years employment proof
    • Last 2 years form 16
    • Welcome letters or schedules for all existing loans

    For self-employed persons
    • Last 3 years income tax returns with attachments
    • (Computation of income, P & L, Balance sheet, Schedules)
    • Latest partnership deed in case of partnership firms
    • Memorandum Of Association and Articles Of Association in case of private limited companies
    • Last 1 year bank statement
  14. What are the property documents required for getting a LAP?
    The below list mentions all the property documents which are needed for getting a LAP.
    • 15 years parent document (Agreement of sale/ Sale deed with 15 years link documents)
    • Patta/ Khata
    • Approved plan
    • Latest tax receipt
    • Encumbrance certificate (EC)
  15. Is it possible to make part-payments against a LAP? What are the charges applicable?
    Yes, most banks allow part-payments though there could be some restrictions on the same at some banks.
    Part-payment charges vary depending on the bank. To get the rates, please refer to the comparison table.
  16. Is it possible to foreclose my LAP? What are the charges applicable?
    Depending on the bank, there could be restrictions related to this. Some banks do not allow the loan to be foreclosed before a specific period from the start of the loan. The foreclosure charges vary from bank to bank. For exact details about the same, please refer to our comparison table.
  17. Is it possible to get a LAP with an overdraft facility?
    Yes, there are some banks which provide loans against property with overdraft facilities attached to the same.
  1. What would be the mode of disbursal of the loan?
    In most cases, LAP would be disbursed through a banker's cheque delivered to you physically.
  2. When should I hand over the original title documents of the property to the bank?
    You would have to hand over the original title documents while collecting the manager's cheque.
  3. Will the bank give any acknowledgement on receipt of the property documents?
    Yes, the bank will issue a custody letter mentioning the same.
  4. What is the mode of repayment?
    Repayments can be made using Standing instruction in case the lending bank and the customer's primary account bank are the same. If that is not the case, the payment can be made through ECS or PDCs.
  5. How can I keep track of my loan?
    Most banks allow online access to keep track of the loan, while some banks which do not have online accounts allow the customers to track the loan by calling up the customer care or by visiting the nearest branch periodically.
  6. What should I do if I need more funding at a later point in time?
    Most banks allow you to enhance the same loan after a minimum of six months of repayment of the current loan.
  7. Is it possible to transfer my loan against property to another bank? Are there any charges applicable for doing the same?
    Yes, it is possible. But, most banks charge a penalty for doing the same.
  8. Would it be possible to sell the property while the loan is still being repaid?
    Yes. There are three options to do the same, which are listed as below.
    • You close the loan and then sell the property
    • Buyer takes a loan from the same bank, in which case the bank aids in the transfer of ownership
    • Buyer takes a loan from a different bank, in which case the payment would be made against the existing loan on the date of registration of the property by the lending bank.
  9. When would I get the original title documents from the bank?
    You would get the original documents within 10 to 15 days after the closure of the loan.
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About Loan Against Property

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