Loans against property (LAP) are financing facilities that could be highly useful to meet big-ticket fund requirements like home renovation, hospitalization expenses, child’s wedding or higher education, among others. These collateralized loan products are usually available at interest rates lower than personal loans.
Most government and private banks and even many NBFCs offer loans against residential or commercial (even industrial plots and godowns, in some cases) property for tenures up to 20 years, subject to applicable terms and conditions of the lender.
While many banks lend up to 65% of the mortgaged property’s current market value, some lenders could offer a higher loan-to-value ratio up to 80% or 90% of the property value, subject to upper limits (like Rs 3 crore or Rs 7 crore) according to the terms and conditions of the lender. Do note, the associated terms and conditions could differ depending on the mortgaged property being a residential or a commercial one. Also, if your property is too old or dilapidated, or it has disputed ownership, you might not be eligible for a loan against property, according to BankBazaar.
Lastly, while a loan against property is a securitized loan, your lender would consider your income and credit score among other eligibility requirements while processing your application and would offer you the lowest available interest rate or the best repayment terms only if your score is above 750-800. Most lenders also charge a processing fee that’s usually up to 1% of the loan amount plus taxes. While many lenders do not charge for part-prepayments in loans against property for individual borrowers who have taken the loan for non-business purposes, it’s better to read the fine print of your shortlisted loan product to get complete clarity before finalizing your decision.
So, if you’re looking for a loan against your residential property, here is a list of 17 leading government and private banks that are currently offering these loans starting at under 10% p.a. for loans up to Rs 15 lakh. We’ve also provided the indicative EMIs for a loan of Rs 15 lakh and a tenure of 10 years for all the banks mentioned in the list below.
Do note, processing fees or any other charges have not been considered for the EMI calculation. The applicable interest rate and the EMI amount could be different based on your chosen lender, your property’s category and current market value, loan amount, LTV, tenure, or any other terms and conditions of your lender.
17 Banks Offering Loans against Property Starting at under 10% p.a. (for loans up to Rs 15 lakh)
Disclaimer: Interest rates on Loan Against Residential Property (LAP) for all listed (BSE) public and private banks considered for data compilation. Banks for which data is not readily available on their website have not been considered. The data collected from respective banks websites as of 31 Aug 2021. The lowest interest rate offered by the banks offering such loans at starting interest rates lower than 10% p.a. on a loan of up to Rs 15 lakh is shown in the table. The EMI is calculated on the basis of the interest rate mentioned in the table for Rs 15 lakh loan with a tenure of 10 years (processing fee and other charges are assumed to be zero for EMI calculation). The interest rates mentioned in the table are indicative and may vary depending on the bank’s T&C. *HDFC Bank rack interest rate.
Data compiled by BankBazaar.com, an online marketplace for loans, credit cards and more.