BigMudra Loan Against Property

What is a Loan Against Property?

A Loan Against Property (LAP) provides funding by using your property as collateral. It can be used for various purposes such as business expansion, debt consolidation, education, medical expenses, or personal needs. The loan can be secured against residential, commercial, or industrial properties, with terms based on the property’s value and the borrower’s financial health. It’s a versatile financing option tailored for both personal and commercial needs, evaluated on factors like property valuation, income, credit history, and repayment capacity.

Loan Against Property Interest Rate

The interest rate for a Loan Against Property depends on factors such as the borrower’s credit profile, loan amount, repayment tenure, property value, and lender’s policies. Lower interest rates reduce borrowing costs, so it’s essential to compare offers from banks and NBFCs to secure the best deal.

Features and Benefits of a Loan Against Property

1. Flexible Usage: Funds can be used for various purposes like business expansion, education, medical expenses, debt consolidation, or personal needs.

2. High Loan Amount: Offers substantial loan amounts based on the property’s market value and the borrower’s financial profile.

3. Collateral-Based: Secured against residential, commercial, or industrial properties, ensuring lower interest rates compared to unsecured loans.

4. Repayment Tenure: Flexible repayment options with long tenures, often extending up to 15-20 years.

5. Quick Approval: Faster processing and disbursal compared to unsecured loans, especially for urgent financial needs.

6. Competitive Interest Rates: Lower interest rates due to the secured nature of the loan, making it a cost-effective borrowing option.

Loan Against Property Eligibility

To qualify for an unsecured business loan, you need to meet the following eligibility criteria :

1. Residential Status :  Both Resident Indians and Non-resident Indians (NRIs) are eligible.

2. Age Requirements : Minimum - 18 years Maximum - 70 years

3. Employment Type : Applicable for Salaried individuals, Self-employed Professionals, and Self-employed Non-Professionals.

4. Income Criteria :  Minimum Monthly Salary - Rs. 12,000 Net Annual Income - At least Rs. 1.5 lakh per annum

5. Work Experience :  Minimum of 1 year with the current employer or organization.

6. Loan-to-Value (LTV) Ratio :  Up to 75% of the property's value.

7. Credit Score :  A score of 750 or above is preferred for favorable loan terms.

8. Eligible Collateral Properties : Residential, Commercial, and Industrial properties can be pledged. Lenders will assess both the age and condition of the property before accepting it as collateral.

How to Calculate EMI for a Loan Against Property

To calculate your Loan Against Property EMI, use the formula:

Manual EMI calculations can be time-consuming and prone to errors. Instead, use an online EMI calculator for quick and accurate results. Just enter the loan amount, interest rate, and tenure. Tools like the BigMudra EMI calculator instantly show your EMI, total interest, and repayment schedule. This helps you compare loan offers and choose the best one for your business.

Loan Against Property Documents Required

1. Identity Proof :  Accepted documents: Passport, Voter ID Card, Driving License, PAN Card

2. Address Proof :  Accepted documents: Ration Card, Telephone Bill, Electricity Bill, Rental Agreement, Passport, Bank Passbook or Statement, Driving License

3. Proof of Age : Accepted documents: PAN Card, Passport, or any certificate issued by a statutory authority

4. Proof of Income (Salaried Individuals) :  Documents required: Form 16, Latest Payslips, Income Tax Returns (ITR) for the last 3 years, and any investment proofs (if applicable)

5. Proof of Income (Self-employed Individuals) : Documents required: ITR details for the last 3 years, Balance Sheet, Profit & Loss Account Statement, Business License details, and Proof of Business Address

6. Property-related Documents : Required documents: Title Deeds (including the entire chain of previous property documents), Nil Encumbrance Certificate for the property, and the approved plan (if applicable)

Fees & Charges