What Is Loan Against Property
Loan against property (LAP), are basically loans provided by banks against the security of one’s own property. LAP is designed to meet the financial needs of someone who already owns a house or multiple properties so as to get the best out of their assets. Its important to remember that the property which you are putting up for your loan should be free any encumbrance (i.e. it is not given as security for any purpose or any other loan).

Banks provide LAP for both Salaried as well as Self-Employed individuals. The rates and loan amounts differ based on your property and your annual income.

Banks will always want to consider all risks, which is why while you are applying for your loan against property, there are certain factors the bank considers with respect to your property to mitigate its risks in giving out the loan. These factors determine your rate of interest, and loan amount. You can get a LAP of up to 80% of the registered value of your property depending on the Bank’s policy and the property type and valuation. The value of the property would be determined through a valuation conducted by the Loan Provider.

Individuals apply for LAP for a variety of reasons. Some of the common ones are your childs wedding, loans for new business ventures, second homes, vacations, medical treatment just to name a few.

How To Apply For Loan Against Property
Application
Processing
Documentation
Property Verification/Valuation
Sanctioning of the Loan
DisbursementLoan Against Property – For a Commercial Property

Important Questions on Loan Against Property
What kind of processing fee do you need to pay for Loan Against Property?
A nominal fees and charges are to be paid to the Bank depending upon their term and conditions.

How much time does the bank take to disburse the loan?
The processing of the loans usually takes 7 to 10 working days once all the documents are submitted. It also depends upon your profile and documentation.

How is interest charged on Loan Against Property?
Some financial institutions make LAP available only under the floating rate. Fixed rate loans are off limits. Borrowers need to enquire before finalising a LAP from lending institutions.
It is normally available for residential properties only, but can be available for commercial property also.

Does the property have to be insured?
Yes the property has to be insured against fire, flood, earthquakes and other appropriate hazards during the tenor of the loan.

How can I repay my loan?
The repayment of loan is done through Equated Monthly Instalments. It can be paid through Post Dated Cheques (PDC) or Electronic Clearance System (ECS).

Can I pre-pay my loan?
The loan against property can be pre-paid along with the pre-payment charges. Usually the bank charges 2% of the principal pre-paid

Loan Against Property Eligibility Criteria
Some of the Elgibility Criteria when applying for a Loan Against Property Are As Follows

• Income
  • Age (min. 21 years)
  • Property Valuation
  • Existing Liabilities (if any)
  • Current Work Experience
  • Financial Documents
  • Number of Dependants

The eligibility for LAP is calculated on basis of either the percentage of property value that you own and the amount of income you have to enable you to return the EMI on the Loan. So you can get Loan against property upto annex % of property value and the net amount that you earn after other EMI has been deducted from your net income
Loan against Property is given on the below mentioned property types and the percentage of loan you can get is given below:

Loan Against Property – For a Residential Property
Self Occupied – 65% of Property Value
Vacant – 55% of Property Value
Rented – 55% of Property Value

Loan Against Property – For a Commercial Property
Self Occupied – 50% of Property Value
Vacant – 40% of Property Value
Rented – 40% of Property Value
This varies from Bank to Bank by 5 – 10% of the above mentioned percentages.
In order to calculate how much you would be estimated to pay, most banks use a formula which is given below.

Loan Against Property for Salaried Individuals:-
{(NTH – Obligation) * 60%} / EMI per Lac

Loan Against Property for Self Employed Individuals:-
{(NTH – Obligation) * 65%} / EMI per Lac
Whichever is lower from the value of the property or your income- that loan amount will be given to you.

Other Eligibility Criteria Revolves Around the Maximum Age of The Person Applying For The Loan
For Salaried employees – 60 Years
For Self-Employed – 70 Years

Unsecured Dropline Overdraft
Dropline overdraft is a facility granted to you where you can overdraw your current account up to an agreed limit. Overdraft is an efficient form of borrowing as you pay interest only for the time you use the money. It gives you flexibility. You can at any time deposit money into the account to reduce the outstanding balance or can draw out money whenever you need it as long as you do not exceed the limit. Interest is calculated daily on the fluctuating outstanding balance and is normally charged at the end of each month. The overdraft utilized determines the interest that will be payable by the customer. Overdraft against Property is a flexible product offering that allows you a combination of a Term Loan and Overdraft facility against residential or commercial property. This product is useful for professionals, Sole Proprietors, Proprietorship Firms, Partnership Firms or a Private Limited Company with an annual turnover in the range of INR 90 lakh

Who Can Apply
Self Employed (Private Ltd. Co. and Partnership Firms)
Self Employed (Individuals)
Self Employed (Private Ltd. Co. and Partnership Firms) include private companies and partnership firms in the business of manufacturing, trading or services

With:
Minimum turnover of Rs. 60 lakh, financial should be audited.
Years in business: Minimum of 3 years in current business and 5 years total business experience
Business must be profit making for the last 2 years.
Minimum Annual Income (ITR): Rs. 1.5 lakh p.a.

Documents required:
PAN Card
Address proof (ration card, telephone/ electricity bill/ lease agreement/ passport/trade license /sales tax certificate)
Bank statement (latest of 6 months)
Last 2 years ITRs (computation of income) balance sheet and profit & loss a/c. and Financial should be audited.
Proof of continuation (ITR/ Trade license /Establishment /Sales Tax certificate)
Self Employed (Individuals) include Sole proprietors, Partners & Directors.

With:
Minimum age of applicant: 21 years
Maximum age of applicant at loan maturity: 65 years
Minimum turnover of Rs. 60 lakh, financial should be audited.
Years in business: Minimum of 3 years in current business and 5 years total business experience
Minimum Annual Income (ITR): Rs. 1.5 lakhs p.a.

Documents required:
Proof of identity (Passport / Voters ID card/ Driving License/PAN Card)
Address proof (Ration card tel/elect. Bill/ Lease agreement/ Passport/ Trade license /Sales Tax certificate)
Bank statement (latest of 6 months)
Latest ITR along with computation of income, balance sheet and profit & loss a/c for the last 2 years and Financial should be audited.
Proof of continuation (ITR/Trade license /Establishment /Sales Tax certificate)
Other mandatory documents (Sole Prop. Declaration or Certified Copy of Partnership Deed, certified true copy of Memorandum & Articles of Association (certified by Director) & Board resolution (original)

Compare Interest Rates
Here is a list of the interest rates from the Andromeda partners. Please contact us for a specific quote

Loan Against Property Partners

Yash Enterprise Loans India’s largest loan distributor has a large portfolio of partner banks and financial institutions:
Loan against property (LAP), are basically loans provided by banks against the security of one’s own property. LAP is designed to meet the financial needs of someone who already owns a house or multiple properties so as to get the best out of their assets. Its important to remember that the property which you are putting up for your loan should be free any encumbrance (i.e. it is not given as security for any purpose or any other loan). Andromeda Loans is tied up with many financial institues and banks; compare the best interest rates and tips to apply for loan against property.

HDFC Bank
HDFC Bank Limited is an Indian financial services company based in Mumbai, Maharashtra that was incorporated in August 1994. HDFC Bank is the fifth largest bank in India by assets and the largest bank by market capitalization as of 1 November 2012. Loan Against Property can get you a higher loan amount for your business or personal needs with the benefit of lower EMI. With easy documentation, speedy approvals and flexible repayment options, getting a loan couldn’t get easier

ICICI Bank
ICICI Bank Limited is a multinational financial services company headquartered in Mumbai, India. It is the second largest bank in India by assets and third largest by market capitalisation. Let your property be a shelter to your dreams. ICICI Bank Loan Against Property, is a multi-purpose loan that can be used for your business and personal needs.

ICICI Bank provides 12.05% rate of Interest on LAP.

AXIS Bank
Axis Bank Limited is an Indian financial services corporation headquartered in Mumbai, Maharashtra. It had begun operations in 1994, after the Government of India allowed new private banks to be established.Axis Bank gives you loan against your property, be it commercial or residential. You can also apply for this loan if you need funds to acquire new property. A take-over of your existing loan with refinancing is also possible with Loan Against Property.

IDBI Bank
IDBI Bank Limited is an Indian financial service company headquartered Mumbai, India. RBI categorised IDBI as an “other public sector bank”. IDBI Bank brings Loan against property to enable you to unlock the power of your property. You can mortgage your residential, commercial or Industrial property to get a loan & meet all your financial requirements.

Kotak Mahindra Bank
Kotak Mahindra Bank is an Indian financial service firm established in 1985. It was previously known as Kotak Mahindra Finance Limited, a non-banking financial company. Your existing property can help you avail of a loan at interest rates lower than other consumer loans. Avail a Loan Against Property (LAP) today and unlock the potential in your property.

Our Partners

**Our Other banking partners are: Capital First, Indiainfoline

Loan Against Property Tips

Loan against Property (LAP) refers to a secured loan category somewhat like a home loan where the borrower provides guarantee by using his property as security. The right of ownership of the property is still with the borrower, and if for some reason, the borrower is unable to repay the loan amount, the property can always be sold off to pay off the debt.

The maximum loan amount varies from bank to bank and could range from Rs.2 lakhs up to Rs.100 lakhs. The loan amount depends on the property valuation, your income and of-course your repayment capacity.

The maximum loan amount can come upto 80% to 100% of property value for commercial setups and up to 80% for residential properties (This is really variable as it completely depends on the valuation of your property).

The maximum loan tenure in Loan Against Property cases is 15 years.

Be ready to provide security, collateral or guarantors in order to obtain a Loan Against Property, not to mention a long verification process.

Most banks do not accept properties that are on lease or that are based on power of attorney.

The maximum age limit of eligibility is 60 years.

Loan Against Property features Fixed or Floating interest rates. You also have an option of changing from Fixed to Floating interest rates and vice versa once every year.

A processing fee is usually 0.05% to 3% of the loan amount and is payable upfront. This fee however will be deducted from the disbursal amount payable to you. We recommend that you tray and negotiate a 0% processing fee or atleast a flat discount. Most bankers and agents will be happy to do this to ensure the loan gets sold to you.

You can also prepay the entire loan outstanding anytime after 180 days of availing the loan. Pre-payment charges will be levied accordingly. If you intend to do so, please ask for the pre-payment amount to be waived or a reduction in the penalty charges.

You can also increase or enhance your loan against property eligibility. For that you need to show income of atleast three persons, most preferably a family member or a business partner.

Additional Points To Remember When Considering a Loan Against Property

Compare Loan Against Property offers from 3-4 banks, and select the one which offers maximum benefit to you and your purpose.

Pay special attention to the tenure of the loan. The EMI may be less for longer tenures, but the total interest outflow will be higher.

If its possible, consider pre-payment options. All banks charges 2% – 3% of the loan in case you decide to pre-pay the outstanding amount.

Default in payments results in penalties. It can also adversely affect your credit history and profile. So make sure to make your payments on time. This really plays an important role in getting more loans. Dont miss payments or you will be penalized.

Make sure that all deals and offers agreed upon are supported by relevant papers. So make sure you always ask for a letter in a banks letter-head mentioning the likes of, exact rate of interests, processing fees, pre-payment charges along with interest-schedule, when you decide to finalize your loan with a particular bank or agent.

Make sure you recheck all terms and conditions, before signing any documents. Please Read the Fine Print.

Do not sign any blank documents. Even if it takes you a few hours to fill-up the form, take your time. Do not leave anything for the executive to fill-up.

Once you have received a loan do your best to pay it back as quickly as possible. Banks make their money off the interest they charge and the sooner you pay back a loan the less money you will have to pay in interest.