Mortgage Loan or Loan Against Property (LAP)

Whenever you come across any urgent need of funds, you usually go and avail personal loan. Though Personal Loan is easy to avail but its unsecured nature demands for higher interest rate. As an alternative, you can avail Loan against Property (LAP) at lower interest rate against mortgage of your property, if you own a property. Your property can help you fulfil your personal and business needs.

You can fulfil your personal or business dreams through Loan Against Property (LAP). You can avail an LAP for any personal or business use like:

  • Purchase of Asset
  • House Repair
  • Medical Purpose
  • House Renovation
  • Household festivals/ functions
  • Going on a Holiday Trip
  • Business Expansion
  • Long-term Working Capital
  • Purchase of Equipment
  • Education of Children
  • Marriage Purpose

However, you can not avail it for speculative purposes, real estate/ capital market activities or any activity prohibited by law. Loan of up to 70% of the value of your mortgaged property. The maximum loan amount that can be availed is up to Rs. 5 crores (as offered by most of the banks).

To avail LAP, you can mortgage both residential and commercial property. This loan is given against either commercial property, residential property or rental property you own. You can avail LAP at attractive interest rates. The borrower should evaluate all the pros and cons of Loan Against Property (LAP) because if he/ she is unable to repay the loan then there are chances of losing the mortgaged property.

If you are thinking of availing LAP from your existing bank with whom you have a good relationship, you could be eligible for more favourable offers such as:

  • No prepayment / part prepayment penalty
  • Lower interest rate
  • Higher Loan Amount
  • Quick disbursal of loan amount
  • Minimal or Nil processing charges

Mortgage Loan or Loan Against Property (LAP) Features

  • It is a secured loan
  • It can be taken for personal or business use
  • There is no restriction on use of loan amount which means that you can use it for almost everything
  • A residential or commercial property has to be mortgaged for availing this loan
  • It is easy to obtain with few simple formalities like KYC documentation and lodging of property documents
  • Loan amount up to Rs 5 crore is extended by the lenders
  • Repayment tenure up to 20 years may be allowed under this type of loan
  • Being of secured nature, it is offered at attractive lower interest rate by the lenders in the range of 9.50% to 13.50%
  • Borrower has liberty to increase in loan eligibility with the addition of co-applicants

Mortgage Loan or Loan against Property (LAP) Benefits

  • Convenient and easy to obtain
  • It costs you less
  • It is offered on low EMIs
  • Immediate Funds availability. Total loan processing time is much less as compared to that of home loan applications
  • Offers tax benefits
  • Fast and easy Loan Processing
  • Speedy Approvals
  • Flexible Tenure
  • Hassle free Documentation
  • Easy Balance Transferring
  • Option of Overdraft is also available wherein you can borrow a large amount despite having insufficient balance in your account.

Loan against Property (LAP) or Mortgage Loan Eligibility

When you apply for Loan Against Property (LAP), there are following eligibility criteria on which lenders approve your application of Loan Against Property:

(1) Age of the Applicant

Age to apply for Loan against Property (LAP) is considered as an important factor for determining the eligibility for availing the loan. If the age of the applicant is less then he can avail the loan for higher tenure.

(2) Income of the Applicant

A consistent income of the applicant helps in determining his/ her capacity to repay the loan. Some of the lenders, therefore, keep a minimum income criterion for applying for the loan. It is imperative that applicant's income must be high enough to service the loan extended by the lender.

(3) Credit Score

Your credit score ranges from 300 to 900. If you are having a decent credit score which is 650 or above then you will get LAP very easily and with least efforts and documentation. Good credit score implies that the applicant is creditworthy and the loan application is processed without hassle. The higher your credit score, the better are your chances of getting approval and favourable terms on LAP.

(4) Property Value

Value of the property is a significant factor in determining your eligibility for LAP. The loaction and type of property also matter a lot in loan eligibility process. Whether the property is located in metro, urban or rural area and whether it is residential, commercial or industrial property, all these points are considered in detail by the lender.

(5) Prior Borrowing and Repayment History

Lender is always very careful and watchful about your past borrowing as well as the repayment history before deciding your loan eligibility. If you carry a good repayment history then the lender will consider you a responsible buyer who is eligible for LAP. It is essential to know here that if you are not having a credit history at all, then there are less chances of your getting a loan, as there will be no way for the lenders to determine if you are a responsible buyer.

Mortgage Loan or Loan against Property (LAP) Interest Rates

Interest Rates on mortgage loan or Loan against Property ranges from 9.50% to 13.50%. There are various significant factors which are responsible as to why there is difference in interest rates charged by applicant to applicant.

These significant factors are:

  • Income
  • Stability of Income
  • Past Credit History
  • Credit Score of the Applicant
  • Loan Repayment Record
  • Type of Property
  • Whether the Loan Applicant and Co-applicants are salaried or self-employed
  • Term of Loan

Additional Facilities offered by Lenders on Loan against Property (LAP) or Mortgage Loan

  • Interest Savings with Overdraft: You need to pay interest only on utilized limit out of available limit
  • Balance Transfer Facility: You can carry over your existing loan against property (LAP) with additional refinance
  • Lease Rental Discounting and Overdraft facility: It is also offered against your property

How to get Mortgage Loan or Loan against Property (LAP)?

There are following ways through which you can apply for LAP and avail it easily:

(1) By visiting nearest lender

Loan against Property (LAP) is offered by a large number of lenders in the large cities and you can apply for a loan against property in any of the leading private or public sector banks or NBFCs. You can search for and visit your nearest lender for the same.

By visiting there personally, you will be able to get the advice on your eligibility, documents required, interest rate and can take their help in the loan application process.

(2) By your Existing Bank

You can also avail LAP from your existing bank with whom you have a good relationship, you could be eligible for more favorable offers such as:

  • No prepayment / part prepayment penalty
  • Lower interest rate
  • Higher Loan Amount
  • Quick disbursal of loan amount
  • Minimal or Nil processing charges

(3) Calling Customer Care of the bank from where you wat to opt for LAP

You can call up the bank's customer care department of the bank from where you wat to opt for LAP and tell them that you are interest in availing LAP.

In turn the relationship manager of that bank will contact you with the most suitable offer and will also assist you in getting LAP in an easy way.

(4) Apply Online

You can also select the lender from where you wat to opt for LAP and then visit their official website and find if they are providing online application facility. If yes, then you can also apply for Loan against Property (LAP) online by sitting at your office or home. You need to just fillup their loan application form and upload necessary documents as required by them.

In case of any query while filling up online loan application form, you can take help of their customer care centre by calling up them and clear your doubts or queries.

Upcoming Bank Holidays

2019 April 19 is a bank holiday in Andaman And Nicobar Island due to Good Friday.
2019 April 21 is a bank holiday in Tripura due to Garia Puja.
2019 April 27 is a bank holiday in Andaman And Nicobar Island due to 4th Saturday Bank Holiday.
2019 May 01 is a bank holiday in Andhra Pradesh due to May Day / Labour Day.
2019 May 01 is a bank holiday in Maharashtra due to Maharashtra Din.
2019 May 07 is a bank holiday in West Bengal due to Rabindranath Tagore Jayanti.

Loan Services

Highest FD Interest Rates

Bank NameTenureInterest(p.a.)
Esaf Small Finance Bank 12 Months8.75%
Suryoday Small Finance Bank12 Months8.50%
Utkarsh Small Finance Bank12 Months8.50%
Equitas Small Finance Bank 12 Months8.50%
North East Small Finance Bank 12 Months8.50%
Ujjivan Small Finance Bank 12 Months8.30%
Indusind Bank12 Months8.00%
Rbl Bank 12 Months8.00%
Fincare Small Finance Bank Ltd12 Months8.00%
The Nainital Bank 12 Months7.90%

Senior Citizen FD Interest Rates

Bank NameTenureInterest(p.a.)
Esaf Small Finance Bank 12 Months8.75%
Suryoday Small Finance Bank12 Months8.50%
Utkarsh Small Finance Bank12 Months8.50%
Equitas Small Finance Bank 12 Months8.50%
North East Small Finance Bank 12 Months8.50%
Ujjivan Small Finance Bank 12 Months8.30%
Indusind Bank12 Months8.00%
Rbl Bank 12 Months8.00%
Fincare Small Finance Bank Ltd12 Months8.00%
The Nainital Bank 12 Months7.90%