Loan Against Property Interest Rate

Avail Loan Against Property Interest Rates ranging from 7.25% to 8.00% for up to 15 crore. Check your loan against property eligibility online and get approval for up to 70% of residential or commercial property for up to 15 years at the lowest LAP interest rate. You can apply for best LAP offers for personal or business needs, without any obligation.

Loan Against Property Interest Rates

Banks and financial institutions offer loans for almost anything. If you wish to buy a car or a two-wheeler, you have auto loans. Similarly, a housing loan enables you to purchase a house. A business loan allows people to do productive businesses. A consumer-durable loan lets you buy furniture and other items that you require for a decent living. Loan Against Property and personal loan help people meet their requirements like marriage, education of children, medical expenses, and so on.

Concept and Features of Loan Against Property

A Loan Against Property is a "No Questions Asked" personal loan with security. It is similar to a personal loan in many respects but has its distinct flavour.

The key features of a Loan Against Property are as follows:
  • A Loan Against Property is a collateral-backed personal loan. Banks and other institutions offer this product against the security of either residential or commercial property.
  • The purpose of the loan can be to meet personal expenses like medical needs, marriage expenses, education of family members, tours and travel, home repairs, and so on.
  • Business entities or self-employed individuals can avail this facility to meet urgent day-to-day expenses like working capital requirements. This loan is also available for acquiring a long-term capital asset for business expansion.
  • As it is a secured advance for the bank, the quantum of loan is higher than the personal loan. A personal loan is a clean unsecured loan, usually against your salary and other income.
  • Though the purpose of the personal loan and the Loan Against Property is same, the characterisation of both is different.
  • Compared to the personal loan, the Loan Against Property is a safer proposition for the bank. Hence, the banks offer relaxations by not insisting the borrowers to have a CIBIL score of 750 and above. Many banks provide loans against property to borrowers with CIBIL rating between 650 and 750 also.
  • The rates of interest charged by the lending institutions belong to the middle tier. They are not as low as the home loan interest, and not as high as the personal loan and credit card interest.
  • The process of sanctioning Loan Against Property is a transparent one. The eligibility criteria are crisp and defined clearly. Banks offer eligibility calculators on their websites to determine the Eligibility for Loan Against Property

Loan Against Property - Factors That Determine the Interest Rate

If you look at the interest rate structure of the banks, you find that the individual interest rate falls in a range. It implies that the rate of interest is not the same for all borrowers.

Here are the factors that determine the interest rate for individual borrowers:

The loan amount: Generally, you have different loan slabs with the rate of interest being different for each slab. The lower the loan amount, the lower is the interest rate.

The loan tenure: At times, you find loans for short tenures having a lower rate of interest, when compared to the loans with extended tenures.

The occupation of the borrower: Salaried employees enjoy an advantage of lower interest rates as compared to self-employed borrowers. The reason is the stability and certainty of the income.

The gender of the borrower: Some banks and lenders offer a concession to women borrowers.

The credit rating of the borrower: The lower the credit rating, the higher is the rate of interest, and vice versa.

The nature of the property: At times, you find that loans against residential properties have a lower rate when compared to loans against commercial property.