Loan against property also known as mortgage loan is a secured loan taken for taking care of financial obligations. The individual can keep his residential or commercial property as collateral and get a loan. The loan amount varies as per the market value of the property. Once the person can arrange the loan against property documents required, he can check his loan against property eligibility and accordingly apply for the loan.
Before applying, a person must understand the loan against property interest rate which is being provided. Then compare the options and accordingly decide the best offer. Many Banks and NBFCs in India offer exciting mortgage loan interest rates. There are two types of interest rates: Fixed Interest Rate & Floating Interest Rate.
In a fixed interest rate, there will be no changes in the loan against property interest rate throughout the tenure. This means that the mortgage loan interest rates are not affected by any fluctuation in the market rates. This is beneficial for those who fear that mortgage loan interest rates might increase in the future.
In a floating interest rate, there will be continuous changes in the loan against property interest rate throughout the loan tenure. This means that the mortgage loan interest rates are always affected by any fluctuation in the market rates. This is beneficial for those who are confident that mortgage loan interest rates might decrease in the future. In general, the floating interest rates are linked to the MCLR i.e. Marginal Cost of Lending Rate. This MCLR is decided by the RBI’S quarterly base rate announcements.
To get a loan against property, the borrower would need a strong credit score. This credit score is very important in the mortgage loan process. While checking the loan against property eligibility, the banks will always check the credit score to evaluate the credit worthiness of the borrower. If you’re score is above 750, it is considered as a good score. But this depends from bank to bank.
The loan against property amount depends on the property market value. The bank can provide anything between 40-65%* of the property as mortgage loan value.
|Bank/NBFC Name||Interest Rate*||Bank/NBFC Name||Interest Rate*|
|HDFC Bank Ltd.||9.75% onwards||ICICI Bank Ltd.||13.35% onwards|
|Kotak Mahindra Bank||9.55% onwards||Edelweiss Retail Finance Limited18.25% onwards||12% onwards|
|IndusInd Bank Ltd.||9.50% to onwards||Axis Bank Ltd.14.25% onwards||11.00% onwards|
|Bajaj Finance Ltd.||9.5% onwards||Capital First Ltd.||12% onwards|
|DHFL||12% onwards||Yes Bank||10% onwards|
|Tata Capital Financial Services Ltd.||11.75% onwards||Standard Chartered Bank||9.25%|
|Equitas Small Bank||10.00% onwards||IDFC Bank Ltd.||10.00% onwards|
|Fullerton India Credit Co. Ltd.||13.00% onwards||HDB Financial Services Ltd.||11% onwards|
*The above mentioned statistics are as of December 2017. These can change as per the bank/NBFCs policy terms and the loan borrower's profile.
Presenting all the documents as proof is very important when you want to apply for a loan against property. For a salaried employee, there are many income and tax related documents. Check out the list of documents here.
You took a loan against property for high interest rate. Now you see another bank offering a lower rate of interest.
What can you do? Simple.. Opt for a LAP balance transfer and enjoy paying a lower EMI. Check out how you can do this.
When a self employed professional applies for a loan against property, there are many documents related to their profession which are needed. Check out that list here.