FAQs on Loan Against Property

Who can avail a Mortgage Loan?

Both Salaried as well as Self-Employed people can avail Mortgage Loan, irrespective of the income.

Which factors determine the eligibility of a mortgage loan?

The general factors taken into account while determining the eligibility of loan against property are listed below:
1. Income
2. Age (Min. 21 Years)
3. Property Valuation
4. Existing Liabilities (if any)
5. Current Work Experience
6. Financial Documents
7. Number of Dependants

How much loan can I get?

You can get a LAP up to 80% of the registered value of your property depending on the Bank’s policy and the property type and valuation.

How would the value of my property be determined?

The value of the property would be determined through a valuation conducted by the Loan Provider.

What is the difference between a Home Loan and Loan against Property?

There is a huge difference between a Home Loan and a Loan against property. Home Loan is taken only for the purpose of buying a residential property whereas a Loan against Property can be taken for any purpose.

What are the stages involved in availing the loan?

1. Application
2. Processing
3. Documentation
4. Verification/Valuation
5. Sanctioning of the Loan
6. Disbursement

Is there any processing fee charged by the Bank?

Yes, a nominal fees and charges are to be paid to the Bank depending upon their term and conditions.

What are the documents required for applying for a loan against property?

For Salaried:
1. Application form with photograph
2. Identity and Address Proof
3. Latest Salary Slips
4. Form 16
5. Bank Statements (Last 6 months)
6. Processing fee cheque

For Self-Employed:
1. Application form with photograph
2. Identity and Address Proof
3. Proof of business existence & Education Qualifications.
4. Last 3 years ITR
5. Last 3 years P&L and Balance Sheet
6. Bank Statements (Last 6 months)
7. Processing fee cheque

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.

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 Installments. 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.