India’s loan against property market is likely to grow at a CAGR of 14% in terms of value to reach $857.87 billion by the financial year of 2026. This is an eye-catching growth and largely attributed to the borrower-friendly features of this financial product.

Hence, to make the most of such advantages, one needs to have a clear understanding of the application process and other associated details of a  loan against property.

How to apply for a Loan Against Property?

Here is a step-by-step guide on the application process of a loan against property –

  • Step 1: Visit the website of your preferred lender and fill out the loan application form
  • Step 2: Complete the initial verification by confirming all the details
  • Step 3: After that, submit the required documents
  • Step 4: After document verification, you will get the sanction letter from your lender
  • Step 5: Get the sanction letter from your lender
  • Step 6: After a successful property evaluation and legal check, receive your loan amount

Alongside the awareness about a loan against property application process, one should know other details like its eligibility parameter and documentation to ease the loan approval process.

Eligibility Criteria of a Loan Against Property

The loan against property eligibility criteria includes –

  • Age: 25 to 70 years
  • Employment type: Salaried and self-employed
  • Work experience: As mentioned by a financial institution
  • Monthly income: As specified by a lender
  • Property location: Areas specified by a financer

Besides, one needs to submit the following documents to complete this application process –

  • KYC papers
  • Proof of employment (ID card issued by employers for salaried individuals, or business ownership papers for self-employed)
  • Income proof (Salary slips, ITR documents for salaried applicants, balance sheet and profit and loss statement for self-employed applicants)
  • Property papers (property purchase or registration papers and title document of a property)

A point to note here is that the eligibility criteria and list of documents required for a loan against property are not uniform. It alters with the choice of lender. Hence, one should refer to the specifics set by a financer before applying.

Besides knowing the fundamentals of a loan against property, such as its eligibility criteria, required documents, and application process, one should also know its features and decide accordingly.

Features of a loan against property

Here are some notable features of this financial product –

1. High Loan Quantum

The loan amount of a loan against property depends on the loan-to-value ratio offered by a financial institution. This ratio represents the credit amount one is eligible for against the market value of a property.

For instance, you are applying for a loan against property with a property of Rs.1 crore, and your financer is offering an LTV of 75%. In that case, you will get a credit of up to Rs.75 lakh.

2. Affordable Interest Rates

One of the notable features of this financial product is the interest rate applicable to it. Being a secured credit instrument, the rate of interest here is comparatively low. Moreover, the recent policy rate reduction by the Reserve Bank of India has further lowered the loan against property interest rates. Secure your funding round with a Loan Against Property and leverage your existing assets to fuel your business growth. Hence, the cost of availing of a loan against property has lowered significantly in the current market, allowing more individuals to take advantage of this financial product.

3. Long Repayment Tenor

One of the most notable features of a loan against property is its repayment tenor, which can rise up to 20 years, and in some cases, it can even go beyond. Resultantly, the repayment becomes easy and hassle-free.

In such cases, individuals can take the assistance of a loan against the property EMI calculator and find a suitable tenor. Such online devices will allow them to check which repayment period will suit their requirements. Furthermore, online devices like this come with a loan amortisation schedule. Loan Against Property offers a large loan amount, consider a Loan Against Mutual Fund Investment for a quicker process and potential continued returns on your investment. This list includes a detailed breakup of the loan EMIs, and borrowers can plan their repayment accordingly.

4. Entails No End-Use Restrictions

An advantage of a loan against property over some of its secured counterparts is that it has no end-use restrictions. Innovations in banking are streamlining loans against property processes, offering faster approvals, and exploring alternative property types as collateral. It means borrowers have the liberty to utilise these funds to meet an array of requirements. Here, debtors can fund their medical expenses, higher education, or re-invest in their home development as they deem fit.

5. Availability of Balance Transfer Facility

Balance transfer or loan refinancing is another notable feature of this financial product. Here, borrowers get a chance to shift their remaining loan principal from one lender to another to avail better interest rates and other facilities.

6. Pre-approved Offers

Leading financial institutions extend pre-approved offers to streamline the loan application process. Available to the current customers and on financial products like home loans, loans against property, etc., they save time during loan application. Borrowers can now check their pre-approved offers by submitting their essential contact details.Loan against property is a handy financial product to meet a wide range of financial requirements. However, borrowers should go through the loan terms and conditions before applying for one to avoid facing future complications.