Loan against property

You can start the process of applying for a Loan Against Property (LAP) in any of the following ways:

• Compare offers from different banks
• Check your eligibility basis the income and current loans being serviced
• Apply online with multiple banks, to assess the best & competitive loan offers

From the day an application is being given, banks usually take about 4 – 5 working days to disburse the loan. This is subject to complete information & documentation given at the time of the application.

A Loan Against Property (LAP) has many advantages over a Top-up Loan. They include:

• A Higher Loan Amount: Typically, an LAP may offer a higher loan amount than a Top-up Loan.
• Avail of Different Property: While an LAP can be availed of against a different residential or   commercial property than the one for which the loan was originally taken, a Top-up Loan may   only be taken against the property already in question. This flexibility allows you to both avail of a higher loan amount and spread your liability.
• Longer tenure: An LAP can be availed for a long term than a Top-up Loan.

Loan Against Property can be availed for a self-occupied residence or a commercial property.

You can get a Loan Against Property from Rs. 2 lakhs to Rs. 500 lakhs. Some of the factors that banks consider when deciding a loan amount are:

• The property’s registration
• The property’s market value
• Your requirement and eligibility
• Your income and repayment capacity

Yes! Some banks structure Loan Against Property either as a Term Loan with an EMI repayment option or as a Drop-line Overdraft Facility.

Along with your application you need to submit the following documents:

• Proof of residence
• Proof of identity
• Certified/latest financial documents
• Copies of all property documents

If someone is the co-owner of the property in question, it is necessary that he/she also be the co-applicant on the loan. You may also consider adding your spouse or parents or children as co-applicants to boost the eligibility on your loan.

Yes, banks charge a non-refundable processing fee for every LAP application. The processing charge to avail a Loan Against Property is up to 1% of the loan amount plus service tax as applicable.

There may be. It’s always wise to completely read the “Charges Section” of the loan agreement before signing the same.

The EMI consists of the principal amount and the interest on the principal amount. It is calculated by taking into account the loan amount, the time frame for repaying the loan and the interest rate on the borrowed sum. The EMI may be subject to change when interest rate changes or a part-payment of the Loan is made. Every month, part of the EMI is adjusted towards the interest payable and the balance is adjusted towards repayment of the principal.

The EMI will be due on a fixed date each month. You will be notified of this date when your loan amount is disbursed.

You may place request for Statement of Account or Repayment Schedule or Interest Certificate in either of the following ways:

• By calling the bank’s Call Center at any of their toll free numbers:
• By using your registered email id the to write to the loans department of the respective bank
• Walk-in person to the branch to get the physical statements

Yes, generally banks allow you to part-pay on the loan. This can be done at one of their nearest branch locations. Once the part-payments are done, you either have the option to reschedule the EMI for the new outstanding or keep the same EMI so that the overall tenure of the loan would come down and the loan gets repaid faster.

You may repay your LAP in any of the following three ways:

• Standing Instruction (SI): This mode can be used if you have an existing savings, salary, or current account with the lender. You may wish to open a savings account with the lender to use this option. Your EMI amount will be debited automatically at the end of the monthly cycle from the account you specify.
• Electronic Clearing Service (ECS): This mode can be used if you have a different Bank account other than the lender’s and would like your EMIs to be debited automatically at the end of the monthly cycle from this account.
• Post-Dated Cheques (PDCs): You can submit post-dated EMI cheques from a different Bank account for a specific period of time. A fresh set of PDCs will have to be submitted in a timely manner. Please note Post Dated Cheques are usually collected for non-ECS locations only.
We recommend that you opt for either the SI or ECS mode of payment as they are both faster and less prone to error than the use of PDCs.

Yes, generally banks allow you to part-pay on the loan. This can be done at one of their nearest branch locations. Once the part-payments are done, you either have the option to reschedule the EMI for the new outstanding or keep the same EMI so that the overall tenure of the loan would come down and the loan gets repaid faster.

Before foreclosure is processed, all outstanding dues must be cleared. So first check for and clear any remaining amount that may be payable towards your Personal Loan by requesting a foreclosure statement from your lender. Once all outstanding dues have been cleared, submit a foreclosure request at the Loan Center, for processing. Most of the banks/lenders levy no charge for pre-closure of a Personal Loan account.