Loan Against Property
Understanding loan against property
A loan against property (LAP) is a secured loan that allows you to use your residential or commercial property as collateral to secure funds. It offers numerous advantages over unsecured loans like personal loans or credit cards, primarily due to its lower interest rate. The loan against property eligibility criteria may vary depending on the lender and specific requirements. Generally, lenders, including NBFCs, consider factors such as your income stability, credit history, age, and property valuation during the evaluation process.
In our financial journey, there often comes a time when we need substantial capital to fulfil our dreams and goals. During these moments, a “Loan Against Property” (LAP) can be a valuable tool. This versatile financing option allows property owners to leverage the value of their real estate assets for various purposes.
Benefits of choosing a loan against property
While there are various borrowing options available, one avenue that stands out for its numerous benefits is the loan against property (LAP). Let’s dive into the advantages of choosing a loan against property:
- One key benefit is the relatively lower interest rates compared to unsecured loans, owing to the reduced risk for lenders due to the property collateral.
- Often, lenders allow borrowers to choose from various repayment options, including monthly, quarterly, or half-yearly instalments tailored to their financial capabilities.
- Also, loans against property typically offer higher loan amounts than other forms of credit, like personal loans or credit cards. This is because the loan amount is determined based on the value of the property offered as collateral.
This type of loan can be particularly beneficial for those in need of substantial funds for various purposes, including business expansion, education expenses, debt consolidation, or other significant financial needs.
Things to Keep in Mind while Selecting the Best Banks for your Gold Loan Requirements
1. SBI Loan Against Property
| State Bank of India Loan Against Property Highlights | |
| Interest Rate | 10.00%-11.30% p.a. |
| Tenure | Up to 15 years |
| Processing Charges | 1% of loan amount (Max. Rs 50,000) |
2. Bank of Baroda Loan Against Property
| Bank of Baroda Loan Against Property Highlights | |
| Interest Rate | 10.85%-18.60% p.a. |
| Loan Amount | Rs 2 lakh to Rs 25 crore |
| Tenure | Up to 15 years |
| Processing Fees | Up to 1% (Rs 8,500 upfront-Rs 75,000) |
3. HDFC Bank Loan Against Property
| HDFC Bank Loan Against Property Highlights | |
| Interest Rate | 9.50% – 11.00% p.a. (floating)11.80%-13.30% p.a. (fixed) |
| Loan Amount | Up to 65% of property value |
| Tenure | Up to 15 years |
| Processing Fee | Up to 1% of loan amount (minimum Rs 7,500) |
4. Axis Bank Loan Against Property
| Axis Bank Loan Against Property Highlights | |
| Interest Rates | 10.50%-10.95% p.a. |
| Loan Amount | Rs 5 lakh – Rs 5 crore |
| Tenure | Up to 20 years |
| Processing Fee | 1% or Rs 10,000 (whichever is higher) |
5. Bajaj Finserve Loan Against Property
| Loan Type | Effective ROI (p.a.) |
|---|---|
| Fresh LAP | 10.10%* to 18.00%* |
| LAP (Balance Transfer) | 10.20%* to 18.00%* |
Self-Employed Floating Reference Rate: 16.20%*
Interest Rate (Floating) for Self-Employed Applicants
| Loan Type | Effective ROI (p.a.) |
|---|---|
| Fresh LAP | 9.75%* to 18.00%* |
| LAP (Balance Transfer) | 9.85%* to 18.00%* |