Loan Against Property Interest Rates 2024

When you are short of money or have an emergency financial requirement, getting a personal loan might not always be feasible. In such scenarios, different banks and financial institutions offer customers loans against their properties, also known as LAP. 

There are different rules and conditions you need to follow to get this loan and it is a feasible way to get quick loan approval as per your requirement. Keep reading the article to know everything about loan against property interest rate and how you can get one.

What Is Loan Against Property?

Loan Against Property of LAP is a type of secured loan that a bank or financial institution sanctions against your property pledged as collateral. The assets you can pledge include your house, land, or any commercial estate. This is also the reason why they are called mortgage loans. The loan against property interest rate varies with the value of the property, your credit score, and the loan amount. 

The lending institution will hold the property as collateral until the loan is repaid. As loans against property often come without any restrictions on how they can be used, they are a favoured option for debt consolidation. If the dues are not paid, the lending institution can sell the property to recover the loan.

How To Get Loan Against Property?

You can apply for a loan against property in both online and offline modes. To apply offline, you will have to visit the nearest branch of your lender with all the relevant documents and submit the filled-up application form.

If you want to get the loan online, then you will have to visit the website of your lender and submit your application.

In both cases, the lender will review your application and the property you want to pledge to get the loan and get back to you accordingly. They will help you in selecting the best loan against property.

Loan Against Property Interest Rates In 2024

Loan Against Property Interest Rates in 2024 by Banks

Loan Against Property Interest Rates in 2024 by HFCs

*interest rates updates as 28 Feb 2024.

Loan Against Property Eligibility

Every lending institution has its distinct criteria to decide eligibility for a loan against property interest rate 2024. Broadly, they check your ability to repay the loan. Some of the factors which are typically considered as the eligibility criteria are as follows:

• Borrower should have a source of income
• Credit score of 750 or more (It has nothing to do with your eligibility to take a loan, but it helps to get a loan at attractive interest rates)
• The type of property (commercial, residential, Self occupied and Non-self occupied)
• LTV Ratio (How much amount you take against the value of your property, usual limit is up to 70% of the property value, lesser is better) 

Loan Against Property Documents Required

Here are the documents commonly required to get a loan against property.

• Proof of identity and residence: Aadhaar card, PAN card, passport, voter ID,  etc.
• Proof of income: Form 16, bank statements, income tax returns etc.
• Property Information: Property deeds, registration certificates, property tax documents etc.

Loan Against Property Without Income Proof

Some lenders provide loans against property without Income Tax Returns. These are the Micro loans against the property, usually up to the loan amount of 50 lakhs. If your income does not fall under the income tax slab and you have an eligible property against which you can get a loan from the Bank, and the LTV ratio of your loan application is not high then there is some possibility that you can get a loan against property without income proof. 

Senior Citizen Loan Against Property

Lending institutions also provide loans against property to pensioners. It is one way an individual can get access to a large sum of money even after retirement to act on emergency financial situations. The Eligibility criteria depends on the age cap and pensionor’s income. 

Difference Between Home Loan And Loan Against Property

We often tend to confuse a loan against property with a home loan. Well, they are way different from one another than it sounds. Below we have listed the differences between home loans and loans against property for your better understanding.

Loan Against Property Tax Benefits

The tax benefits for a loan against property are defined in Sections 24(b) and 37(1) of the Income Tax (IT) Act, 1961. We have described them below:

• Section 24(b)

Salaried individuals who use a loan against property to buy a residential property can claim tax deductions of up to Rs. 2 lakh. The tax dedication is applied to the interest paid for the loan. To claim the deductions, you will have to submit documents to prove the purchase of the property.

• Section 37(1)

If you use a loan against property for business purposes, you can claim tax deductions for the interest paid on the loan.

Final Words

Overall, a loan against property is an effective plan to manage cash requirements. You can get it by mortgaging your residential or commercial property. To apply, you will have to submit documents about your income, identity and the property you are mortgaging. Loans against property are also eligible for tax deductions if they are used for buying a property or for business purposes. Make sure to check the loan against the property interest rate of as many lenders as you can before submitting your application to make an informed financial decision.

Other Finance Bank FD Interest Rates:
1. Jana Small Finance Bank FD Rates
2. Ujjivan Small Finance Bank FD Rates
3. AU Small Finance Bank FD Rates
4. Utkarsh Small Finance Bank FD Rates