How to Avail Loan Against Property without Income Proof
Loan Against Property (LAP) for your personal or business needs can be availed from Banks and NBFCs. Customer can both residential and commercial properties can be mortgaged for availing a loan against property. Now a days Banks provides a smooth & hassle-free LAP to both salaried and self-employed individuals. HDFC Bank’s Loan Against Property is a simple solution to your financial needs.
LAP (Loan Against Property) can be taken against a fully constructed, residential, commercial, or leased property. The interest rate for a Loan Against Property can be fixed or floating based on your needs. The terms of the loan are flexible and will depend on the purpose for which the property is being used. Loan Against Property can help you finance capital growth, service working capital requirements, and consolidate debt.
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Loan Against Property Interest Rate
Loan Against Property is a secured loan this loan is also known as Mortgage loan. Interest Rate for Loan Against Property
LAP Interest rate typically range from 8.50% to 18% per years.
HDFC Bank offers Interest rate on Loan Against Properties between 9.50% to 11.00%. Rate of interest calculated using Policy Repo Rat +Banks Margins. Current Policy Repo Rate is 6.50% and Margin is charges basis CIBIL Score , Loan Amount , Loan Tenor and other financial or income eligibilities. Margin rate vareis from 3.00% to 4.50%.
Policy Repo Rate* + 3.00% to 4.50%= 9.50% to 11%
*Policy Repo Rate- 6.50%
Loan Against Property Interest Rate and Offers
| Self Occupied Residential Property | 8.95 – 9.95 |
| Non – Self Occupied Residential Property | 9.25 – 10.25 |
Retail Prime Lending Rate(Non Housing): 12.20%
| Commercial Property | 9.25 – 10.25 |
Loan Against Property EMI Calculator
(LAP) Loan Against Property Eligibility
To qualify for a Loan Against Property (LAP), borrowers must meet certain requirements, which vary slightly between lenders. Below are the common criteria:
Age
- Salaried Individuals: Typically between 21 to 60 years.
- Self-Employed Individuals: Usually between 25 to 65 years.
(The maximum age is calculated at the end of the loan tenure.)
Employment/Income Stability
- Salaried Individuals:
- Stable employment with a minimum of 2-3 years of work experience.
- Regular monthly income meeting the lender’s threshold.
- Self-Employed Individuals:
- Minimum of 3 years in the current business.
- Demonstrated consistent income with financial records.
Credit Score
- A good credit score (700+ on a scale of 900) is preferred.
- A higher score increases the chances of approval and better interest rates.
Property Type and Ownership
- Eligible Properties:
- Residential, commercial, or industrial properties.
- The property should be owned by the applicant, either singly or jointly.
- Clear Title:
- The property must have a clear and marketable title without legal disputes.
Loan-to-Value (LTV) Ratio
- Lenders typically approve 50% to 70% of the property’s market value as the loan amount.
- LTV depends on the property’s condition, location, and market demand.
Income and Repayment Capacity
- The lender evaluates the applicant’s income to ensure the ability to repay.
- Debt-to-Income Ratio: Total monthly obligations (including EMIs) should ideally not exceed 40%-50% of the monthly income.
Co-Applicants (Optional)
- Adding a co-applicant (spouse or close family member) can enhance eligibility.
- Co-applicants must also meet the lender’s criteria.
Additional Considerations
Nationality: Only Indian residents and, in some cases, Non-Resident Indians (NRIs) are eligible.
Property Location: The property must be located in an area approved by the lender.
Existing Liabilities: Outstanding debts or ongoing loans can impact eligibility.
Loan Against Property Documents required
Identity Proof: Aadhaar card, PAN card, passport, or voter ID.
Address Proof: Utility bills, rent agreements, or passport.
Income Proof: latest 3 months Salary slips, Last 2 Years Form 16 / ITR and Bank Statements are required for salaried customers. Last two financial years ITRs, Balance Sheets and P&L Statements along with bank statements are required for Self Employed customers.
Property Documents: Title deed, property tax receipts, and valuation report.
Frequently Asked Questions (FAQs)
What is a Loan Against Property (LAP)?
A Loan Against Property is a Secured Loan provided by financial institution against property as collateral, where you can mortgage your residential, commercial or special use property to get immediate funds. You can use these funds for any purpose from business expenditure to personal needs like marriage, medical expenses and child’s education etc. Existing Loan Against Property from other banks and financial institutions can also be transferred to other Bank. In LAP, the property you own, which has a clear title, is kept with financial institution or Bank as a collateral or security, to help you get financial assistance.
Who can avail a Loan Against Property (LAP)?
When it comes to a Loan Against Property eligibility, Loan Against Property is available for salaried individuals between the age of 25 to 70 who want to fund wedding expenses, child’s education, medical treatment, property purchase, debt consolidation, or for any other purpose.
The loan facility is also available to self-employed individuals who have their own business or practice. The minimum age is 25 and the maximum age is 70, when it comes to a Loan Against Property’s eligibility.
Some Bank LAP is also tailored to meet the needs of medical professionals. This category of customers can easily qualify for the loan and get an instant Loan Against Property approval on the loan amount.
Doctors are eligible to get a loan amount that is up to 75% of their property value. They can use the funds for buying medical equipment, expanding their operations, buying a second home and more.
The funding is also available for industrial or any other special use properties, for a tenure of up to 10 years.
What is the maximum term for which I can avail a Loan Against Property (LAP)?
Loan Against Property tenure is easy funding that any individual can opt for a maximum tenure of up to 15 years.
What is the security that I need to provide to avail a Loan Against Property (LAP)?
You need to mortgage your property, to ensure access to immediate funding. Your property will act as a security against the loan amount that you are seeking to apply with the bank. It can be either a residential, commercial or special use space, which is well constructed, has a clear title and free from any legal complications.
What are the documents required for a Loan Against Property?
You need to provide below mentioned documents
Identity & Address Proof – it can be either Aadhaar Card, PAN card, Passport or Voter ID for both salaried and self-employed individuals
Income Proof that includes 6 months’ bank statements, 3 months’ salary slips, Income Tax Returns (ITR) or Form 16, in case of salaried individuals
• Self-employed need to produce a business existence document of a minimum of 5 years and ITR of 3 years
Property documents which include, a title deed, no encumbrance certificate and previous chain of paperwork from previous owners of the property.
What type of property can I mortgage for a LAP?
Banks allow you to secure a mortgage Loan Against Property by mortgaging residential or commercial property or a special use property (owned or rented).
In case you own any of these properties like schools, warehouses, industrial or nursing bed with a capacity of 30 beds, you are eligible to get the loan.
Do Bank offer Property Loan as an overdraft?
Overdraft facility is available to all customers provided by most of the banks. It is a great financing option, which you can use for business or personal needs. Under this scheme, you are given a credit limit and you can withdraw a required amount from the eligible loan amount during the loan tenure. The interest rate is applicable only on the amount withdrawn/utilised.
What percentage of the property value can I avail as a LAP?
The loan amount, which you can avail through Bank’s LAP depends on the overall condition of the property. This is nothing but the Loan to Value or LTV Ratio, which every bank refers to before approving any loan. Also, LTV ratios differ by the type of property. Age and prevailing market value of the property also comes under assessment. Once all these parameters are evaluated, Banks offer a loan amount of up to 50% to 80% of the property value. You can use a LAP EMI calculator to know how much loan you can avail.
For what purposes can I avail a LAP Loan?
Loan Against Property can be availed for various purposes such as a wedding, child’s higher studies, medical exigency, buying a new home, business expansion, debt consolidation to lower cash outflows, purchase of medical equipment and much more.
