What kind of processing fee do you need to pay for Loan Against Property?
A nominal fees and charges are to be paid to the Bank depending upon their term and conditions.
How much time does the bank take to disburse the loan?
The processing of the loans usually takes 7 to 10 working days once all the documents are submitted. It also depends upon your profile and documentation.
How is interest charged on Loan Against Property?

oan against property is a secured loan i.e. the bank keeps the property documents as collateral during the term of the loan. Due to the reduced risk perceived by the bank, the Loan against Property interest rates on offer are quite low and close to the base rate. Currently, the interest rates on loan against property start at as low as 11%.

Different banks offer Loans against property with options of fixed interest rate and floating interest rate to applicants to choose from.

Fixed Interest Rate:

Fixed interest rate on loan against property remains stable throughout the loan tenure. However different financial institutions levy different interest rates for the Loans against property.

Floating Rate:

Floating or adjustable interest rate is not fixed and remains static. This type of interest rate varies according to prevailing market conditions.

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Does the property have to be insured?
Yes the property has to be insured against fire, flood, earthquakes and other appropriate hazards during the tenor of the loan.
How can I repay my loan?
The repayment of loan is done through Equated Monthly Instalments. It can be paid through Post Dated Cheques (PDC) or Electronic Clearance System (ECS).
Can I pre-pay my loan?
The loan against property can be pre-paid along with the pre-payment charges. Usually the bank charges 2% of the principal pre-paid.

Q. Can I use the money obtained from Loan against property for business activities?

Ans. Yes. You can use the loan obtained by mortgaging your property for business activities as well as for any personal financial distress you might be facing. However, you are not allowed to use the money for any illegal or speculative activities.

Q: Who is eligible for Loan against Property?

Ans: The Loan against property criteria vary from one bank to another. However, the common factors that all banks consider are:

●        Your income, savings, debt obligations

●        Cost/value of the property mortgaged

●        Your repayment track record for other loans, credit cards

Q. Do I need a co-applicant for this loan?
Ans. A co-applicant for loan against property is mandatory only when the property being mortgaged is owned by more than one person. In such as case, all co-owners of the property mandatorily become co-applicants.

Q: What do you mean by the market value of a property?
Ans: The market value of a property is the estimated value in terms of money that a property can raise if it is sold at prevailing conditions.

Q: What types of properties are accepted by lenders providing Loan against property?
Ans: Lenders accept various types of property whether they are residential (rented out and self occupied) or commercial use properties. A plot of land without any construction can also be considered as appropriate collateral by the prospective lender.

Q. Are only residential properties eligible for loan against property?
Ans. No, you can avail a Loan against mortgage of residential/ commercial property owned by you.

Q: For how long can I can take a loan against property and what interest rate will I be charged?
Ans: The tenure of a loan against property can be as long as 15 years, with interest rates ranging from 12% to 15.75%. The exact tenure and interest rate on your loan may vary to a certain extent from one lender to another.

Q: Can NRIs avail loans against property?
Ans: Yes, several financial institutes offer loans against property to NRIs, subject to verification of all documents.

Q: Do banks accept uninsured property to sanction loan against property?
Ans: No, in most cases, banks require the property to be insured before approving a loan.

Q: Can I prepay my loan against property?
Ans: Yes, you can prepay the loan taken against property; however, you would have to abide by certain terms & conditions levied on prepayment of loan by the particular bank.