The minimum annual income to avail loan against property should be ideally Rs. 1,20,000, if you are a salaried individual.
For self-employed individuals, the minimum annual income requirementto avail loan against property is normally Rs. 1,50,000.
The minimum annual income requirement may vary depending on the bank.
Minimum age to avail loan against property is usually 21 years.
Maximum age to avail loan against property differs depending on your profession.
Salaried individuals cannot be more than 60 years at the time of loan maturity.
For self-employed and professionals it is 65 years.
Government pensioners can be up to 70 years at the time of loan maturity.
Number of dependants
Assets and liabilities
Stability and continuation of occupation
The documents required to avail a home loan: The documents required to avail a home loan differ depending on whether you’re salaried employee, a self – employed businessman or a self – employed professional. But there are certain documents required that are common across all professions. They are –
Loan against Property can be taken for various purpose. Since Loan against Property (LAP) can be repaid easily over 15 years, it can be used to fulfill the following funding requirements. -
Getting your child married - A wedding can be an expensive affair. Taking a Loan against property (LAP) can cover your expenses with ease.
Dream vacation - A Loan against property (LAP) can fund your dream vacation.
Renovate your home-If you take a Loan against property (LAP), you won't have to cut corners to renovate your home. You can put your preference and requirements first.
Medical treatments - Loan against property (LAP) can solve your immediate money requirement, for urgent or serious medical treatment.
Your children's higher studies - With a Loan against property (LAP), you can send your children to universities in India or abroad, in order to fulfill their educational dreams.
For Repayment of existing loans availed from other Banks.
Expand your business - if you need more funds to expand your business, a Loan against property (LAP) can provide money, to work on your business requirements.
For any other personal use, except any activity that is illegal.
For getting a loan against property you can mortgage a self-occupied or rented residential property. You can also take a loan against non-residential property, provided it is fully constructed and should be a freehold property with a clear name and title.
Normally, it is 1% of the loan amount plus applicable taxes.
Lease Rental Discounting (LRD) is a loan offered by banks and lending institutes against the rental receipts obtained from leasing commercial property.The borrowers get a loan by pledging their future rental income to the lender. These lease contracts are normally long term in nature.
LRD schemes in India have the following features -
Eligibility - salaried individuals who are in permanent service in a government undertaking or a reputed private sector undertaking. Professionals and self-employed. Non-individual entities like - Private limited companies, public limited companies, partnership firms.
Age - minimum age of 21. Maximum 65, in some cases 70.
Loan amount - the maximum amount that can be borrowed is up to 250 lacs.
Loan tenure - the loan tenure varies depending on the bank. Usually, the maximum loan term is up to 10 years.
Loan-to-value - Up to 70% of the value of the property can be borrowed, subject to your income eligibility.
Charges and fees - processing fees and other charges depend on the bank from which you're borrowing the loan. Normally processing fee ranges from 0.5% to 1.5%.
Documents required -
Latest Electricity /Telephone Bill, or
Receipt of Maintenance Charges, or
Valid Passport or Voter's Identity Card, or
VAT/CST Registration certificate, or
MIDC Agreement, or
SSI Permanent Registration Certificate, or
Warehouse Receipts, or
Shop & Establishment Act Certificate, or
Copy of Lease Agreement along with the latest Rent paid Receipt
For residential property the minimum property area for loan against property should be at least 500 sq. ft.
For commercial property the minimum property area of loan against property should be 200 - 250 sq. ft. (depending on the lender)
Most banks nowadays distinguish the loan amount as below and above ₹ 75 lacs and the interest rate is given according to it. Some banks lend a maximum amount up to ₹ 10 crores, whereas some sanction an amount that is as low as ₹ 1 lac.
The interest rates are of two types – fixed and floating. The rate of interest is said to be fixed for a loan when the interest rate doesn’t fluctuate during the period of the loan. A floating rate of interest fluctuates depending on the prevailing market conditions.
The minimum interest rate that a bank charges is the base rate. The current base rate of major banks in India ranges from 10% - 10.50%.
Margin requirement and Loan-to-value ratio (LTV) is a term used to indicate the ratio of a loan to the value of an asset purchased.
Example – suppose a person wants to buy a property of ₹ 20 lacs, the LTV ratio provided by banks is 90%. So the bank will give him a loan of ₹ 18 lacs (90% of ₹ 20 lacs). The LTV ratio given by banks depends on the loan amount borrowed. For amount up to ₹ 20 lacs it is usually 90%. It is 80% for amount above ₹ 20 lacs but below ₹ 75 lacs. And for any amount above ₹ 75 lacs it is 75%
Loan availability – you can check the amount you can be eligible for (can afford), by using the Loan Eligibility Calculator available on the website.
Repayment timeframe is the period of time in which the loan amount borrowed is to be repaid to the lender. It is also known as loan tenure. The maximum loan tenure offered by banks is not more than 30 years, however in some special cases it does exceed 30 years. The minimum loan tenure is anything up to 5 years.
Processing fee is an extra fee that has to be paid to the lender for the home loan. It is usually a small percentage of the home loan amount but it is taken before the loan is sanctioned, when all the required documents are submitted by the borrower.
Some banks ask for an amount (₹ 5000, ₹ 10000) but most banks charge a percentage of the loan amount as processing fees that ranges from 0.25% to 2% depending on the loan amount. (Higher the loan amount, more the processing charge). There a few banks who don’t ask for any processing fees.
This is a fee charged by the lender when the borrower repays the loan amount before the agreed loan tenure. However, the RBI has asked banks to stop charging penalty on prepayment of home loans taken on “floating” interest rates.
A penalty for late payment is charged when the monthly installment (EMI) amount is not repaid within the scheduled date. A percentage of the loan amount is charged for late payment and ranges from 1% to 3% for each instance of late payment.
|SBI Bank||PNB||LIC Housing Finance Ltd|
|Minimum Income (p.m)||25,000||10,000||10,000*|
|Minimum Income (p.a)||3,00,000||1,20,000||1,20,000*|
|Minimum Loan amount||25,000||Personal- 1,00,000||2,00,000|
|Maximum Loan Amount||2,00,00,000||Personal- 5,00,000||5,000,000*|
|Max Term of Loan - Years||10||7||15|
|Processing Fees in %||1.01%||0.90%||1%*|
|Processing Fees INR (Max Amount to be charged)||50,933||45,000||NA|
|Interest Rate||Up to Rs.1 crore- 12.75%||15-15.5%||13.5%*|
|Above Rs. 1 crore- 13%|
|Max loan to Value Ratio||60% market value of the property||50% market value of the property||50% market value of the property*|
|Total amount to be paid at the end of loan period (Principal + Interest)||Processing Fees (percentage × Loan Amount)||Total Amount (Principal + Interest) + Processing fees|
|SBI LOAN AGAINST PROPERTY||6,78,759.01||5,050||6,83,809.01|
|PNB LOAN AGAINST PROPERTY||7,13,697.90||4,500||7,18,197.90|
|LIC Housing Finance Ltd LOAN AGAINST PROPERTY||6,90,295.38||5,000||6,95,295.38|
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