Investing in property is a first priority amongst different asset classes. However, they are illiquid when compared to other assets like stocks or gold, which means they cannot be easily encashed, perhaps one of the biggest drawbacks of real estate.

Loan against property can also be called as all purpose loan as the amount can be used for any purpose the borrower wishes for. Loan amount range from Rs 25,000 to Rs 1 crore. However, if you avail more then Rs 25 lakhs you need to have an undertaking that the loan will not be used for any speculative purpose, including speculation on real estate and equity shares. Click to know importance of loan against property.

Loan amount varies depending on the bank, your income and value of your property. However, banks do not lend the complete value of the property. Based on other eligibility it can vary from 40 per cent to 6 per cent. Check to know benefits of availing loan against property.

Documents Required for Loan Against Property

1. Last 6 months bank statements.
2. Processing fee cheque
3. Residence Proof,
4. Qualifications Certificate (For Salaried)
5. Income Proof Salary Slips ,Form 16(For Salaried)
6. 3 years Income Tax returns (self and business)
7. Property Documents & NOC from Society
8. Proof of business existence
9. Proof of Identity
10. Proof of age

Banks do ask for income proof due to illiquid nature of property.

Eligibility criteria for Loan Against Property

Eligibility criteria for salaried employees are:

1. Minimum age of applicant: 21 years
2. Maximum age of applicant at the time of loan maturity: 60 years
3. Minimum Net Monthly Income: Rs. 12000 p.m.

Eligibility criteria for self-employed employees:
1. Minimum age of applicant: 21 years
2. Maximum age of applicant at the time of loan maturity: 65 years
3. Minimum Annual Income: Rs. 150000 p.a.

Repayment

It varies depending on the bank . State Bank of India allows maximum of 60 equated monthly installments, up to 120 months for salaried individuals with check-off facility. You could opt to divert any surplus funds towards prepayment of the loan without attracting any penalty.

Processing Fees

2% of the loan amount [inclusive of the service tax]. Max of Rs. 50,000/-

Please note that interest rate, processing fees, documentation requirement varies from bank to bank. the above are some broad guidelines only.

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