Loan Against Property

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While searching for a loan against property, the first question that comes to mind is how much I can get “Kitna Milega?

The answer to the question of “Kitna Milega” is calculated on the basis of a) the percentage of property value that you own and b) how much income you have left after paying other EMIs that you can use for repaying this new loan. So you can get Loan against property up to a certain percentage of the value of the property and your Net Income.

A limiting factor for being available for loan against property is Maximum Age. For salaried employees, the maximum age to be eligible is 60 years and for self employed individuals; the maximum age is 70 years.

Loan Against Property can be taken for following purposes:

✔ Expanding your business
✔ Get your child married
✔ Send your child for higher studies
✔ Fund your dream vacation
✔ Fund Medical Treatments

Characteristics of a Loan against Property

✔ Cheaper than Personal Loans: It works out to be much cheaper than a personal loan, which is usually issued at interest rates in the region of 16% – 21%.
✔ Longer Loan Tenure: The tenure for a Loan against Property is usually longer than that for a personal loan. Generally, LAP is given for a maximum tenure of 10 years.
✔ Lower EMI: Since the rate of interest is lower, many times, LAP Equated Monthly Installments (EMI) turn out to be cheaper than those under personal loans.
✔ Simple documentation and Fast Approvals: LAP being a secured Loan has comparatively faster approvals and minimal documentation

Percentage of loan that you can get on different types of property is listed below:

Residential Property:-
Self Occupied – 65%
Vacant – 55%
Rented – 55%
 Commercial Property:-
Self Occupied – 50%
Vacant – 40%
Rented – 40%

Note: The amount of loan available against property varies from bank to bank in the range of 5-10%

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