A loan against property may be one of your top picks if you are searching for a lending opportunity that could fix massive considerations such as a marriage, high educational costs, business expenditure or a major illness. Just like a personal loan, a loan against property is assumed to provide a much stronger loan amount, long payback period and cheaper interest rates than unsecured loans. Before undertaking a loan against property, though, remember the possibility that several banks provide these loans up to 65 per cent of the market worth of the promised assets. For your property, the terms and conditions of the loan can vary which you must take into consideration while applying for such types of loans. Even, you will not be eligible for a home loan if the property is too outdated or ramshackle, or it has contentious ownership.
Finally, because a loan against property is a securitized loan while approving your application, the creditor can evaluate your credit score and only give you the possible repayment rates if your score is over 750. Hence, for instance, if you are searching for a loan for your property, here are the lowest marketed interest rates currently provided for loans up to Rs 10 lakh and for a tenure of 5 years by all the major banks. Remember that based on your preferred lender, the cost of your land, loan amount, period, or any other terms & conditions of your bank, the relevant interest rate and EMI amount may vary.
Interest Rates On Loan Against Property
|Sr No.||Banks||ROI in % p.a.|
|1||Bank of Baroda||8.05|
|4||Bank of Maharashtra||8.55|
|5||Punjab National Bank||8.70|
|8||Bank of India||8.85|
|9||Jammu & Kashmir Bank||9.20|
|10||Karur Vysya Bank||9.25|
|11||Punjab & Sind Bank||9.35|
|13||Kotak Mahindra Bank||9.50|
|15||Indian Overseas Bank||9.75|
|16||Union Bank of India||9.80|
|19||South Indian Bank||10.30|
Documents required to apply for a loan against property
In order to apply for a loan against property you must keep the below-listed documents handy:
- Duly signed loan application form
- Identity proof: PAN card, Passport, Driving License, Aadhaar Card, Voter id
- Address proof: Passport, Driving License, Voter ID Card, Utility bills of the last 3 months
- Income proof: Bank account statement of the last 6 months, a salary of the last 3 months
- Form 16
- ITR of the last 2 years
Eligibility required to apply for a loan against property
An individual over the age of 60 is eligible for a loan against his or her property. One or both of the individuals must be over the age of 60 years in case of joint holders to opt for such type of loan. In the case of joint holders, the age of the spouse may vary from bank to bank. Some of the basic eligibility criteria are as follows:
- An individual must have a property that is fully owned by him or her.
- In the case of joint holders, the property must be on behalf of any of the individuals. Banks take over the home loan in some circumstances and pay off the debt to the landlord in monthly instalments.
- The property must not be more than 20 years old.
- The land must be the individual's primary residence
- Reverse mortgage loans are not eligible for property used for commercial purposes.
Loan against property rates and charges
A majority of banks charge 0.50 -1 percent as a processing fee. You must apply for the loan online on the official site of the respective bank to compare the lowest fee, offers and so on.
When you have additional money left to reimburse it, nobody prefers to make paying interest on a loan. If you wish to partially reimburse your debt before the specified period is considered as part prepayment. It is called foreclosure in the event that you plan to settle the whole debt balance before the tenure. In such cases, banks do not impose any prepayment or foreclosure fees. Banks regularly release lucrative schemes with cheap interest rates on loans. Thus, to get the smartest property loan interest, always look for deals from different banks.
Facts to consider while applying for a loan against property
Once you meet the following eligibility requirements, you may be eligible for a loan against your property by a bank. Note, the following considerations may differ from bank to bank.
Age limit: Individuals that are at least 21 years old and up to a limit of 65 years old. Nonetheless, some banks also offer loans to people aged 18 and up to a limit of 70 years of age.
Tenure: Depending on your age, banks offer loans up to a tenure of 15 years. Most of the banks, though, do not provide property loans for more than 7 years or 9 years. Only limited banks give loans up to tenure of 20 years respectively.
Income criteria: For salaried employees, most banks propose a minimum income of Rs 40,000 and Rs 3 Lakh p.a. for self-employed individuals. This limit may vary across banks.
Employment status: The minimum work experience available for salaried applicants is 3 years. For self-employed individuals, a minimum work existence of 5 years with an income tax return of 3 consecutive years is applied. Eligibility requirements may vary from those of salaried employees in case of self-employed professionals. Also, remember that home loan rates may be better for a salaried person relative to a self-employed individual.
Credit score: Banks offer a loan contingent on the market worth of the property or its declared cost, whichever is lower. Banks allow a credit score of 650 and above to be qualified for a mortgage loan.
In order to consider the best deal, it is strongly recommended to search the interest rates on loans against property provided by all banks. Please search to find the bid that ideally meets the criteria for the minimum and maximum loan size and repayment tenure available to you and the documentation guidelines. The relevant charges, such as processing fees, part prepayment fees and late payment charges, are also must be considered. For individual borrowers who have obtained a loan for non-business needs, several banks do not ask for part-prepayments of loans against property. And this is why, before finalizing your opinion, it's smart to get clear confirmation on the terms and conditions relevant to your loan.