In the realm of secured loans, loan against property stands out as a powerful financial tool. Whether you are planning to expand your business, finance your child’s education, cover medical expenses, or consolidate high-interest debts, loan against property provides a cost-effective and reliable funding solution.
This article covers all you need to know about a loan against property—what it is, how it works, eligibility, benefits, documents required, and more.
What is a loan against property?
A loan against property is a secured loan where you pledge your residential, commercial, or industrial property as collateral to borrow funds from a bank or financial institution. Loan against property offers borrowers access to higher loan amounts at relatively lower interest rates compared to unsecured loans like personal loans. The repayment tenure is flexible, often spanning 15 years, making it easier to manage monthly EMIs. This loan can be used for various purposes such as business expansion, education, medical emergencies, or debt consolidation. The ownership of the property remains with the borrower, but the lender holds the legal rights until the loan is fully repaid. Both salaried and self-employed individuals can apply, making Loan Against Property a versatile and affordable financing option for high-value financial needs.
Can we get loan against property to buy buy a property as a gift for sibling?
A mortgage loan comes with no end-use restriction, commonly referred to as a loan against property, allows borrowers to unlock the value of their residential or commercial property without specifying how the funds will be used. Unlike home loans that are limited to property purchases or construction, a loan against property offers complete flexibility in fund usage. Borrowers can use the loan amount for a variety of purposes—business expansion, education, medical expenses, wedding costs, travel, or even debt consolidation. This makes it an ideal financial solution for individuals seeking large funds without the limitations of end-use clauses. Since it is a secured loan, interest rates are lower compared to unsecured loans like personal loans, and the repayment tenure is typically longer, often up to 15 years. However, the borrower must ensure timely repayment, as the pledged property remains collateral until the loan is fully repaid. It’s a strategic way to access high-value financing with full spending freedom.
Types of properties you can mortgage
You can pledge various types of immovable assets, including:
- Self-occupied residential property
- Rented residential property
- Commercial property (shops, offices)
- Industrial property
Who can avail loan against property?
Eligibility Criteria:
- Nationality: You must be an Indian citizen residing in India with property in a city we operate in.
- Age: Minimum age: 25 years (18 years for non-financial property owners)
Maximum age: 85 years (including non-financial property owners)
*Age of the individual applicant/ co-applicant at the time of loan maturity.
*Higher age of co-applicant may be considered up to 95 years basis 2nd generation (legal heir) meeting age norms and to be taken as co-applicant on loan structure. - CIBIL Score: A CIBIL Score of 700 or higher is ideal to get an approved loan against property.
- Occupation: Salaried, self-employed professionals like doctors, and self-employed non-professionals are eligible to apply.
Documents required for loan against property
Here’s a list of commonly required documents:
- Proof of identity/ residence - Aadhaar/ passport/ voter’s ID/ driving license/ letter from NPR/ NREGA job card
- If your current address is not the same as the OVD document provided, please share any of the listed DOVD documents. Click here to view the documents.
- Proof of income
- Property-related documents
- Proof of business (for self-employed applicants), and
- Account statements for the last 6 months
Benefits of loan against property
- Substantial loan amounts: Access funding of up to Rs. 10.50 Crore* to secure your intellectual assets, invest in legal protections, or grow your business.
2. Flexible repayment tenures: Enjoy repayment terms of up to 15 years*, ensuring financial stability while managing your expenses.
3. Hassle-free application process: With minimal documentation and easy eligibility criteria, you can apply online seamlessly from the comfort of your home or office.
How to apply for a loan against property?
- Click on “APPLY” button on this page.
- Enter your 10 digit mobile number and OTP.
- Fill in the application form with your Personal Details, Business/Employment/Professional details, Property details and proceed.
- Enter your loan amount that you need, choose from our three loan variants- Flexi term loan, Flexi Hybrid Term Loan, and Term loan.
- Choose the repayment tenure - You can select tenure option of 12 month to 180 month and click on proceed.
Conclusion
loan against property is a smart way to unlock the value of your assets without having to sell them. It offers a win-win solution with large loan amounts, flexible usage, and long repayment tenures at relatively low interest rates. Before applying, using a mortgage loan EMI calculator can help you estimate your monthly repayments and plan your finances better. However, since your property is on the line, it’s crucial to borrow responsibly, understand all terms clearly, and repay EMIs on time. By doing so, you can make the most of this powerful financial tool to meet your short-term and long-term financial needs.
