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- Loan Against Property
Loan Against Property
Read on to know the criteria required to apply for Loan Against Property.
Loan Against Property Eligibility and Documents
Eligibility Criteria for Loan against Property
- Nationality: You need to be a Citizen of India with documents to prove your claim.
- Occupation and Income: Your lender will require you to furnish details regarding your occupation and income to prove your professional and financial stability to determine your creditworthiness.
- Credit History: Your three-digit Credit Score, indicative of your track record in respect of repayment of loans, and other forms of credit will be a deciding factor to prove your eligibility for a LAP.
- Banking Relationship: Should you have a healthy relationship with your lender, you will not be disapproved for a LAP. Additionally, your lender will offer you better terms and conditions in respect of loan value, interest rates, period of the loan, hidden charges, and processing fees.
- Market Value of Property: Your lender retains the right to decide the loan amount and terms and conditions of your mortgage loan based on the market value of your collateral property. Besides, the market value of the mortgaged property must be higher than the loan amount calculated on the current value of your property.
- Title of Property: Your lender will require you to be the current existent owner of the property, and in case of a co-application, you will require to prove multiple ownership clear title. Besides, the property must not be mortgaged with any other financial institution.
Documents Required to Apply for Loan Against Property
Regardless of whether you have a salaried job or are self-employed, we understand that your financial needs are unique. That's why at Ruloans, we offer specialized solutions designed to cater to your individual situation. Our commitment to providing a smooth and efficient loan process means you can expect a hassle-free experience from start to finish.
One of the standout features of our service is the simplified documentation requirement. We recognize that dealing with excessive paperwork can be cumbersome and time-consuming. That's why we've streamlined our loan application process to ensure that you need to provide only the essential documents, making the entire experience smoother and more convenient for you.
How is Loan Against Property EMI Calculated?
Loan Against Property EMI (Equated Monthly Installment) is calculated using the following Compound Interest formula:
EMI = [P * r * (1 + r)^n] / [(1 + r)^n – 1]
Where:
EMI = Equated Monthly Installment
P = Loan Against Property principal amount
r = Monthly interest rate (Annual interest rate divided by 12, expressed as a decimal)
n = Loan Against Property tenure in months
Fees and Charges for Loan Against Property Loan
The fees and charges of property loans usually vary from lender to lender and from case to case. The aforementioned table will give you a fair idea of the fees and charges related to property loans:
Particulars
Charges
FAQs
Any loan against a residential or commercial property can be used for both personal and business purposes. In fact, you can use it for anything other than speculative or non-prohibitive activities.
Basically, the bank looks at your repayment capacity. For calculating the loan amount, your income, age, qualifications, number of dependants, spouse’s income, assets, liabilities, stability and continuity of occupation and savings history are taken into consideration. However the eligibility of loan does not, generally, exceed 60 percent of the market value of the property.
You can include your spouse as a co-applicant and that results in a higher amount being lent. However, if the property is co-owned, all co-owners mandatorily need to be co-applicants.
Processing fee for loan against any property varies from bank to bank and is generally around 1 percent.
Interest is calculated on daily reducing balance. Your monthly out-go (equated monthly instalment – EMI) is much lower as compared to the interest on annual reducing balance.
Loans against property has a maximum tenure of 15 years, subject to the condition it does not exceed your retirement age. This condition however can be flexible in certain cases
You repay the loan in Equated Monthly Instalments (EMIs) comprising principal and interest. Repayment by way of EMI commences from the month following the month in which you take full disbursement.
As the name implies you need to Mortgage your Property for availing this loan. This mortgage is Equitable mortgage by Memorandum of Entry by way of deposit of title deeds and/or such other collateral security, as may be necessary. Collateral security for by way of assignment of insurance policy or any such other assignable financial instruments are also required, as security to loan if deem necessary by the Bank.
Please do ensure that the title to the property is clear, marketable and free from encumbrance. To elaborate, there should not be any existing mortgage, loan or litigation which is likely to affect the title to the property adversely.
Yes. Prepayment is possible and there is no prepayment fee if you repay the loan after six months of availing the loan if you pay from your own source of funds without transferring the loan.
The repayment capacity of the applicant(s) based on Resident status is reassessed and a revised repayment schedule worked out. The new rate of interest will be as per the currently applicable rate of Resident Indian loans (for that specific loan product). This revised rate of interest would be applicable on the outstanding balance being converted. A letter is given to the customer confirming the change of status.