Loan Against Property (LAP), also known as mortgage loan, is sanctioned against an asset, which remains with a lender until the loan is repaid. This asset can be a residential, commercial or industrial property. Property loan gives you access to high loan amount at a low interest rate starting at 8.20% p.a. Lenders usually sanction a mortgage loan between 50% and 70% of the property’s market value, which you can repay easily in EMIs stretching up to 20 years. Like unsecured personal loans,LAP Loan or loan against property also can be availed for meeting both personal and business needs other than speculative purposes.
Loan Against Property:Benefits
Benefits of loan against property vary across different lenders and loan schemes. However, some of the common mortgage loan benefits are as below:
The interest rate is a significant factor that affects the total cost of your property loan. As loan against property is of higher value and longer tenor, its rate of interest can have long-term financial implications on borrowers. Availing low-interest rates on loan against property will reduce the EMI as well as the total interest payout. Therefore, prospective borrowers should try to get a mortgage loan at the lowest possible rate of interest.
Currently, the Citibank offers the lowest rate on loan against property starting at 8.20% p.a. However, the final rate of interest at which you will get the property loan will depend on your lender, credit profile and loan amount.
Top Lenders Offering Lowest Loan Against Property Interest Rates in India
Given below is a table of the latest loan against property rates of some leading banks, NBFCs and HFCs in India:
Lowest Interest Rate
Processing Fees (exclusive of GST)
1% of the loan amount (Min. Rs. 8,500 & Max.
Rs. 1.5 lakh)
1% of the loan amount
0.75% of the loan amount (Min. Rs 2,500 & Max. Rs. 1 lakh)
Up to 1.50% of the loan amount or Rs. 4,500, whichever is higher
1% of the loan amount (Max. Rs. 50,000)
1% of the loan amount (Min. Rs. 5,000 & Max.
Up to 1% of the loan amount (Min. Rs. 5,000 & Max. Rs. 1 lakh)
1% of the loan amount or Rs 10,000, whichever is higher
Mortgage interest rates in the table are subject to the credit/ risk profile as assessed by the lender on the basis of parameters such as credit scores, age and repayment capacity of the applicant.
Loan against property interest rates from all lenders as of 16th July 2021. Mortgage loan interest rates in the table are subject to change anytime without prior notice.
To apply for a loan against property, you must meet the required eligibility criteria. While the eligibility criteria for availing LAP varies from provider to provider, below are some general conditions that must be fulfilled to apply for loan against property:
Resident Indian and Non-resident Indian
Minimum Age Limit
Maximum Age Limit
Salaried, Self-employed Professional and Self-employed Non-professional
At least Rs. 12,000 per month
Net Annual Income
At least Rs. 1.5 lakh per annum
At least 1 year in the current organisation
Eligible Loan Amount
Up to Rs. 25 crore
Loan to Value
Up to 75% of property value
Preferably 750 and above
Residential, Commercial and Industrial
Note: The information in the table is indicative, the actual values may vary depending on multiple factors including your credit profile, lender, property and location.
Before applying for mortgage loan, use loan against property EMI calculator to know how much EMI you can afford on a certain loan amount, interest rate and tenure. Your loan against property EMI should not put strain on your monthly expenses. Once you find the EMI, loan amount and tenure that you are comfortable with, click the Apply Now button to proceed for the loan against property application process.
When applying for a mortgage loan, lenders ask for a list of documents to assess your loan repayment capacity and also to ensure that all information given by you is legit. Now this list of documents may differ from one lender to another. It may also vary as per your scheme, resident type and type of employment. However, the common set of documents required to apply for loan against property are as below:
Additional Documents Required for Mortgage Loan
For Self Employed: Income statements and other financials for the past 2 years attested by a CA
For SMEs: Audited financials for the last 2 years
Note: The above list is indicative. The lender may require additional documents at the time of loan against property application
Before applying for a loan against property, it is good if you plan for its repayment. Doing so will help you avoid financial hassles in future. To help you plan your finances in advance, Paisabazaar presents a loan against the property EMI calculator. It is basically an online tool that calculates the EMI amount payable towards your loan repayment. LAP EMI Calculator gives accurate and quick results on the basis of a few basic loan-related details including loan amount, interest rate and tenure. To know your loan against property EMI,
While availing a mortgage loan, certain charges are levied by the banks or the HFCs to process the loan. This amount varies from bank to bank and should be considered while selecting the financial institution. Let us take a look at these charges.
A distinctive feature of LAP is the flexibility to prepay the outstanding loan amount anytime during the loan tenure. As per the latest RBI guidelines, no prepayment charge is levied in the case of individual borrowers, who have a floating rate of interest applicable on their loan against property. However, corporate entities are still charged a certain fee for prepayment, but it is minimal. Prepaying your loan amount helps to bring down the outstanding principal amount.
Benefits of Prepayment of Loan Against Property
Prepayment of the outstanding amount under Loan Against Property offers various benefits. Some of them are:
Q1. Is it mandatory to have a co-applicant for availing LAP?
A co-applicant for a loan against property is mandatory only when the property being mortgaged is owned by more than one person. In such a case, all co-owners of the property need to apply as co-applicants.
Q2. How is the value of a property calculated?
The market value of a property is estimated in terms of money that it can raise if it is sold at prevailing conditions.
Q3. What types of properties are accepted by lenders providing Loan Against Property (LAP)?
Different lenders have different criteria for the type of property to be accepted against a mortgage loan. However, mostly all financial institutions accept the residential, commercial or industrial property. It is important to note that the physical condition and age of the property may affect its acceptance by the financial institution.
Q4. What is the maximum loan tenure available under LAP?
Mostly, the tenure of a loan against property goes up to 15 years. However, this may vary from one lender to another.
Q5. Can NRIs avail loans against the property?
Yes, there are several financial institutions that offer loan against property to NRIs.
Q6. Do banks accept uninsured property to sanction loan against property?
No, in most cases, the property mortgaged to avail a loan against property needs to insured.
Let us help you find the most suitable offers.