Loan Against Property in India

Click to apply for Loan Against Property in India

In the realm of financial solutions, Loan Against Property (LAP) emerges as a versatile option, granting unsecured financing without collateral requirements. Whether for wedding expenses, a holiday, or acquiring consumer durables, LAP caters to diverse needs. This comprehensive guide explores the benefits, features, and nuances of LAP from Indexia Finance in India.

Benefits of Loan Against Property

  1. No Security Required:
    • LAP is unsecured, eliminating the need for collateral, and setting it apart from secured loans.
  2. Simple Documentation:
    • Access LAP in India with minimal paperwork, simplifying and expediting the application process.
  3. Flexible Use of Funds:
    • Borrowed funds can be utilized without disclosing the end use, focusing on repayment based on income, employment, and business factors.
  4. Large Loan Amounts:
    • LAP caters to significant loan requirements, offering amounts ranging from Rs. 50,000 to Rs. 30 lakh.

Comparing Indexia Finance Loan Against Property

  1. Interest Rates:
    • Compare interest rates, varying from 11.99% to 25%, based on individual profiles, occupations, salaries, and credit histories.
  2. Other Charges:
    • Evaluate additional charges such as processing fees, prepayment penalties, and documentation fees, as they impact the overall cost.
  3. Loan Offers Evaluation:
    • Calculate the total loan cost across banks, considering interest rates, EMI, and additional charges.
  4. EMI Comparison:
    • Utilize the EMI Calculator to compare Monthly Equated Installments across different banks.
  5. Loan Tenure Consideration:
    • Choose loan offers with consistent tenures to compare interest costs and EMIs. Longer tenures result in lower EMIs but higher interest payments.
  6. Eligibility Check:
    • Understand eligibility criteria offered by various banks, comparing property loan offerings to secure the best deal.
  7. Turnaround Time:
    • Consider the turnaround time for loan processing, a crucial factor, especially in urgent situations.

Charges Involved in Loan Against Property

Beyond interest rates, understanding additional charges is essential. Key charges include:

  1. Processing Fee:
    • Typically, 1-3% of the loan amount, is charged by banks to process loan applications.
  2. Prepayment Fee:
    • Ranges from 2-5% of the outstanding loan amount for early EMI payments.
  3. Late Penalties:
    • Incurs a fee of 2-3% of the EMI in case of delayed payments.
  4. Cheque Bounce Charges:
    • Banks charge Rs. 250 – Rs. 750 for every bounced cheque due to insufficient funds.
  5. Documentation Charges:
    • Vary from Rs. 500 – Rs. 3000 for verifying borrower documents.

Note: Charges vary across banks, impacting the actual cost of the Loan Against Property.

Eligibility Criteria by Various Banks for Loan Against Property in India

Banks consider factors like income, employment, and business continuity when offering loans against Property in India. Eligibility criteria include:

  1. Self-employed:
    • Based on work profiles, divided into self-employed and salaried classes.
  2. Salaried:
    • Criteria include age, work experience, existing bank relationships, repayment capacity, and more.

Indexia Finance simplifies this process with the Eligibility Criteria Check for Loan Against Property in India seekers.

How does the CIBIL Score affect your loan application?

Banks assess creditworthiness through the Credit Information Bureau (India) Limited (CIBIL) Score. A good credit score (ranging from 100 to 999) ensures faster processing and lower interest rates, while a low score may lead to rejection. Tips to improve your score are timely EMI repayments and maintaining credit card payments.

Reducing Interest Rate or Flat Interest Rate: which is better?

Interest Rates for Loan Against Property in India vary between 15% and 25%. Two types of interest rates include:

  1. Reducing Balance Interest Rate:
    • Interest is calculated on the reduced principal amount, resulting in lower overall costs.
  2. Flat Interest Rate:
    • Interest remains constant over the entire loan period, often proving more expensive.

Important Pointers in Loan Against Property in India

  1. Increase Your Loan Eligibility:
    • Combine your income with your spouse’s for a higher loan amount.
  2. Leverage Existing Bank Relationships:
    • Get interest rate discounts by choosing a bank you already deal with.
  3. CIBIL Score Check:
    • Maintain a good credit score for faster processing, lower interest rates, and fee discounts.
  4. Penalties:
    • Be aware of prepayment charges and restrictions on early loan closure within the initial six months.

Required Documents For Loan Against Property in India

Generally, the documents required by Loan Against Property in India to process your loan application are almost similar across all the banks. However, they may differ with various banks depending upon specific requirements, etc. The following documents are required for a Loan Against Property in India by financial institutions to process the loan application.

  • Passport-size photograph of the applicant & co-applicant
  • PAN card copy of the applicant & co-applicant
  • Aadhaar card copy of the applicant & co-applicant
  • Current address proof of the applicant & co-applicant
  • Income proof of the applicant & co-applicant
  • Last 12 months’ bank statement of the applicant & 6 months’ bank statement of the co-applicant

In the case of Salaried

  • Copies of payslips for the last 6 months and TDS certificate
  • Employment certificate from the employer
  • The latest 2 years of Form 16 issued by the employer

In the case of Self-employed

  • Copy of partnership deed if it is a partnership firm or copy of MOA and AOA if it is a company or Business Proof (Shop & Establishment Certificate, VAT, Sales Tax, GST, Service Tax, IEC) if it is a proprietorship firm
  • Copy of audited financial statements for the last 3 years
  • Profit and loss account for the last 3 years
  • Income tax assessment order
  • Company current address proof
  • GST certificate of the Company

Other Documents

  • All existing loan sanction letters, if any.
  • Repayment schedule of existing EMI, if any.
  • Agreement copy/booking slip / E-bill, OC & share certificate of the property which is going to be bought.

Conclusion

Indexia Finance, the best Loan Against Property provider in India, ensures the lowest interest rates. Apply online and realize your financial aspirations. We are your one-stop loan destination, turning dreams into reality. Indexia Finance, among the top 3 finance companies, stands as a testament to excellence in loan services in India.