As per the current rates, Citibank offers the lowest mortgage loan interest rate of 8.80%. These rates can vary depending upon the value of the property, your occupation and repayment capacity. Higher the loan amount, higher will be the rate of interest.
Existing Loan against property linked to base rate to benefit from MCLR from 1st April 2018 - RBI in its monetary policy on 7th Feb 2018 has mandated that banks' base rates be linked to MCLR rates. This will benefit mortgage loan borrowers whose loans are linked to base rate. Any increase or decrease in MCLR rates will now automatically be applicable to pre 2016 loans that are benchmarked to base rate.
In another important move, the RBI has also brought NBFC's under the purview of the RBI's Banking Ombudsman scheme. This will help speedy resolution of disputes between customers and NBFC's and give a window to the customers to submit their grievances.
Loan against property is another name of mortgage loan and is available for both salaried and self-employed borrowers to help them fulfil their business and personal needs by mortgaging their property.
Some of the basic purposes for which this loan is usually taken are for meeting individual needs like expanding business, acquiring assets, education needs, marriage by mortgaging property plot. The loan is granted against the mortgage of the residential/commercial/industrial property. The end use of the loan should be from the uses allowed by the bank. The borrower is required to declare the end use of the loan in its application form.
|Purposes for which loan is granted||Purposes for which loan is not granted|
|Business expansion||Home purchase|
|Child Education||Home construction|
|Personal expenses such as wedding or vacation||Home renovation|
|Medical emergency||Plot purchase|
You may be eligible for property loan in India from one or more banks if you meet the following eligibility conditions:
|Minimum and Maximum Age||Individuals with minimum age of 21 years and maximum upto 65 years
Note: However, there are few banks which also give loans to individuals of 18 years and /or individuals up to 70 years of age.
|Loan Tenure||Banks give loan upto a period of 15 years depending upon your age
Note: However, some banks may not offer a loan against property for more than 7 years or 9 years. Only selected banks offer mortgage loan up to 25 years.
|Net Monthly Income||
|Employment Type and History||
Note: Eligibility conditions for self employed may be different from that of salaried customers Also, note that mortgage loan rates may be higher for a salaried customer as compared to a self employed or a business men. The reason is that salaried customer tend to take a loan for personal purposes while self employed borrower are more likely to take a this type of loan for business purposes.
Banks typically give mortgage loan for a LTV of 60-70%.
|CIBIL Score for Loan against property||
Banks gives loan based on market value or registered value of the property, whichever is lower.
Note: In case of low CIBIL score, you can be eligible for few banks or NBFCs with some additional conditions like higher interest rate and higher margin
It is easy to avail mortgage loan online by comparing loan against property interest rates, processing fees and other loan terms and conditions of all banks. It is advisable to follow the following steps to get a hassle free, lowest cost and most transparent property loan.Step 1 : Check loan eligibility and EMI
Once you decide to take a property loan, estimate your loan amount eligibility to know the loan amount you will be eligible for and can apply for. Also, calculate the monthly EMI that you can easily repay based on your current net income and other existing fixed obligations including rent and EMIs on other existing loans, if any. Your loan eligibility is calculated based on your age, net income, existing obligations, property type, LTV ratio and other factors. EMI is dependent on the loan amount, interest rate and tenure.Step 2 : Check property approval status and legal documents
The property against which loan is to be taken is required to have a clean title, all statutory and government approvals as well as complete set of property documents. Some of the property related documents that a lender will require are: Registered Sale Deed/ Conveyance/ Lease Deed, Past Sale Deeds Chain (each transaction in respect of this property since first allotment), Latest House Tax Return/ Receipt, Approved Building Plan from Municipal Corporation etc. Hence, choose the property with all records and clean title for taking a loan against. Also loans against residential properties are easy to get with a low rate of interest and should be first choice of property for this loan option.Step 3 : Decide on type of mortgage loan interest rate offers
Once you have a sense of your eligibility and the property you can borrow against, you can proceed to check the various mortgage loan offers of different banks for different products. Key aspects of interest rate offers that need to be checked are:
Do mortgage loan interest rate comparison of the banks on various types of mortgage loan products and take an informed decision.Step 4 : Compare other charges and loan parameters of the shortlisted banks
Banks also charge other additional fees on property loan in addition to LAP interest rates, so you should know all the additional fees and charges with a Loan against property which include prepayment charges, processing fee, insurance premium and other charges applied by the shortlisted banks.
You can take the help of loan advisors of online marketplaces like myloancare.in to be able to get complete details on loan against property rates, fees and charges of all banks and take an informed decision.
When you decide to take a loan you should also look after other services and transparency related parameters of the chosen banks. Some of these factors are turnaround time offered by the banks, quick loan delivery, doorstep services, transparency in the loan process. You also need to understand the trends and changes in MCLR rates over a period of time. Last but not the least, read reviews of existing customers on websites, about interest rates and transparency to make a firm decision of borrowing loan from a bank.
Once you have done complete research on the loan offers available in the market and have shortlisted the bank from where you want to take loan, you go through the following steps to complete your loan process and get a loan sanction
Mortgage loan process can be cumbersome. However, with continuous assistance and doorstep services of the bank as well our representatives, we have managed to make the process of getting mortgage loan easy and customer friendly for our valued customers.
Regular Loan against property: This is the most common loan taken by a borrower to fulfill any kind of business and personal needs which may include loans for:
Lowest interest charged on Loan against property is 8.80%. All banks and NBFCs provide property loan for these purposes: like for loan against residential property, while only selected banks offer loans against commercial property. Financing companies are typically more open to extend loans against residential property. Very few NBFCs and bank offer loans against industrial property.
Loan against property Overdraft: Overdraft facility is availed by the borrowers who expect to have surplus income or fluctuating income during the year. This facility allows you to deposit the available surplus amount for any period which can be as short as few days in your Loan against property account and reduce your interest liability. This option is highly suitable for self employed businessmen or professionals who have fluctuating funds requirements throughout the year.
Loan against property Top Up: Top up loan is an additional loan amount that you can avail on your existing Loan against property. Top up can be taken either from the existing bank or can be availed at the time of transferring your outstanding property loan amount from one bank to other bank to avail low interest rates. The LTV cap on Loan against property is applied to calculate your eligibility on a loan amount. This means that the amount of top up loan plus your existing mortgage loan outstanding should be less than or equal to 70% of the market value of the property. Top up amount eligibility may vary from bank to bank based on your income and value of the property and needs a thorough comparison.
Interest rates, LTV and processing fee can differ by type of property. The following table compared the key terms of various types of property loan offers by type of property.
|Type of properties and conditions||Industrial Property||Commercial Property||Residential Property|
|Interest rate||10.85% - 13.35%||9.50% - 15.15%||9.50% - 15.15%|
|Loan to value (LTV)||40% - 65%||40% - 75%||40% - 75%|
|Processing fee||0.20% - 1.00%||0.20% - 2.00%||0.20% - 2.00%|
|Income Proof for Salaried||6 months payslip, ITR of last 2 years, 2 years Form 16, 6 months bank statement showing salary credit||6 months payslip, ITR of last 2 years, 2 years Form 16, 6 months bank statement showing salary credit||6 months payslip, ITR of last 2 years, 2 years Form 16, 6 months bank statement showing salary credit|
|Income proof for Self employed||ITR of last 3 years, VAT/ service tax registration, business address proof, financial statements certified by CA, copy of partnership deed and proof of business existence and business profile||ITR of last 3 years, VAT/ service tax registration, business address proof, financial statements certified by CA, copy of partnership deed and proof of business existence and business profile||ITR of last 3 years, VAT/ service tax registration, business address proof, financial statements certified by CA, copy of partnership deed and proof of business existence and business profile|
|FOIR||0.65||0.65||0.55 - 0.65|
|CIBIL||650 and more||650 and more||650 and more|
Mortgage loan EMI is the monthly amount or instalment that you pay every month to the bank or financial institution in order to repay your loan. EMI is composed of principal amount and interest. Interest component in your EMI is higher in early months and gets reduced with each EMI. Similarly, principal repaid is a significantly small component in total EMI in early months and gets higher with each EMI. EMI Calculator helps you to calculate your monthly EMI at desired interest rate for a particular tenure.
EMI depends upon loan amount, interest rate and loan tenure
|Documents Required||Individuals||Firms, Partnerships|
|Identity Proof||PAN card, Passport, Driving License, Aadhar Card, Voter id, Govt issued i-card||PAN card, Passport, Driving License, Aadhar Card, Voter id, Govt issued i-card|
|Certificate and Proof of Business Existence||PAN , sales tax/ excise/ VAT/ service tax registration, Copy of partnership deed, Trade license, certificate of practice, registration certificate issued by RBI, SEBI|
|Address Proof||Passport, Driving License, Election ID card, Electricity/ Telephone/ Mobile bill/ bank statement (not more than 3 months old)||Bank statement, utility bill, Registry copy, lease or rent agreement, TAN allotment letter|
|Age Proof||PAN card, Passport, Driving License, Voter id card, Birth certificate, Employee ID card (only for PSU/ Government employees), School/ college leaving certificate||PAN card, Passport, Driving License, Voter id card, Birth certificate, Employee ID card (only for PSU/ Government employees), School/ college leaving certificate|
Citibank is the best bank for taking a loan against property based on its current mortgage loan rates as the bank offers low interest rate of 8.80%.
Best Banks for taking mortgage loans based on processing fees are:
Jammu And Kashmir Bank charges the lowest processing fees of 0.20% as a % of loan amount. Federal Bank caps the processing fees to a maximum of Rs. 7,500 irrespective of the loan amount
A mortgage loan is a type of loan in which borrower is required to mortgage any type of property to the lending institution like it basically act as security against loan if in case someone fails to pay back the loan then the remaining amount can be raised by selling that property.How can I apply for Mortgage loan?
You can apply for loan in several ways. You can directly visit the bank branch and meet the sales person, contact a loan agent or apply online at any bank or NBFC's website. You can also check and compare best mortgage loan interest rates in all banks online at MyLoanCare and apply for loan.What is the minimum and maximum tenure of loan against property?
These are generally taken for a longer period of time. The loan tenure for loan against property ranges from 1 years to 20 years.What are the charges for Loan against property?
In addition to mortgage interest rates, banks charge the following fees on loan
CIBIL score is also one of the important factor to get the loan. Good CIBIL score indicates a strong repayment record and hence, banks can offer you higher loan amount at lowest mortgage loan interest rates. Bad CIBIL Score could mean higher chances of rejection of your loan or getting a loan with high interest rates. So, it is important to make all your payments on time and maintain a good CIBIL score to get best Loan against property rates.What are the factors, other than interest rate, that you should consider while comparing and choosing loan against property from various banks?
You will need to submit copies of the following property documents
Yes, you can apply jointly with an earning co-applicant (either be your spouse or your parents). Adding co-applicant can increase your eligibility and you can also avail for a higher amount of loan as your co-applicant's income also gets added to your income and that total is taken into consideration for calculating the loan amount you will be eligible for.Does it affect my co-applicant if I default in mortgage loan?
Yes, if you fail to pay the loan on time then it will also affect your co-applicant as default in loan will affect his/her CIBIL rating as well.Can I take top up on my existing Loan against property?
Yes, you can avail top up on an existing LAP only if you have made timely repayment of EMIs accrued on existing Loan against property. The interest rate charges on top up loans are 0.25 – 1% higher than a property loan and can be availed with minimal documentationWhy Top up loan is better alternative compared to other loans?
Taking a top up loan on existing Loan against property has the following benefits
Lower interest: Interest charged on top up loan is comparatively lesser than the interest charged on a personal loan.
Lower EMI: As tenure is higher and interest rate is lower on LAP compared to personal loan, the EMI for top up Loan against property is lower than that on a personal loan.
Higher loan tenure: In case of a top up loan you will get the loan tenure equal to tenure outstanding on your existing loan.
Pre payment penalty: No pre payment penalty is applicable on top up loans.
Tax exemption: There are no tax benefits for repayment of this loan.Am I eligible for a Loan against property despite a poor credit score?
Yes, you may be eligible for this loan even with a bad credit score. But, the lenders may charge a higher rate of interest on your loan and may ask you to apply for loan along with a co-applicant who will be equally responsible for making timely loan repayments.Can I get a loan against property with any existing loans?
Usually, lenders ask about the status of your existing loans when you apply for a Loan against property. This is done to assess the eligibility of paying out EMIs on your loan in the future. If your payment history is good, then the lenders may give you the option of taking top up loan on your existing Loan against property . The bank may also offer you a new LAP if it feels that your current income levels can support additional EMI repayments and hence, you can be eligible for a new LAP.
Nowadays, almost all banks offer attractive schemes on Loan Against Property at competitive rates with many customer friendly features. You can do rates comparison, check your eligibility, calculate EMI, apply online and get the best Loan Against Property rates. MyLoanCare helps you throughout the loan process from the day you apply to the time you get disbursement. You can register with us, track your loan status on a regular basis and get an option to earn attractive cashbacks and refer and earn benefits.