Loan Against Property

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Loan Against Property

What is a Loan Against Property?

Mortgage Loan commonly known as 'Loan Against Property' in India is a secured loan that is sanctioned against fully constructed, freehold residential and commercial properties.

At, 3M Loans, we believe in educating our customers so some of the key factors are given below for your consideration before you apply for Loan Against Property.

Purpose of a Loan Against Property

Loan Against Property is normally / can be taken for funding various personal or business needs of an individual.

Business Loan

Business Expansion

Business Loan

Education Expenses of children

Business Loan

Marriage expenses in the family

Business Loan

Purchase of home or office

Business Loan

Improvement or Extension of existing Property

Business Loan

Medical Treatment

Business Loan

Any other personal Need

Purpose of a personal loan

Loan Against Property is normally / can be taken for funding various personal or business needs of an individual.

Key Factors

Loan Eligibility

The applicant for the loan should be:

  • Minimum 21 years of age
  • Salaried Individual
  • Self Employed Professionals / Non-Professionals
  • Applicant should be the owner of the property and all co-owners have to compulsorily be co-applicants in the loan, however the co-borrowers need not be the co-owner to the loan.
Loan Amount

Typically, you can get up to 55% – 70% of the value of the property or twice your annual income (whichever is lower) as a Loan Against Property and nowadays lenders have many other different products like Banking Surrogates. On the basis of your running loan tracks, the maximum loan amount is normally between Rs. 5 – 10 crores but can be extended in some cases depending on the borrower’s profile.

The final loan amount is dependent on host of other factors like income and regular outgoings, existing loans, repayment track record, valuation of the property by the lender etc.

Loan Against Property is given on the below mentioned properties and the percentage that you can get loan is listed below.This varies from Bank to Bank in 5 - 10%.

Residential Property: Commercial Property:
Self-Occupied – 90%
Vacant - 65%
Rented - 60%
Self-Occupied – 90%
Vacant - 65%
Rented - 65%

To calculate as to how much you can pay, it is looked at, by most banks in the below mentioned ways. Whichever is lower from the value of the property or your income - that loan amount will be given to you.

For Salaried: For Self-Employed:
{(Net Take Home - Obligation) * 80%} / EMI per Lakh {(Income - Obligation) * 90%} / EMI per Lakh
The other criteria are maximum age:
For Salaried – 60 Years and For Self-Employed – 70 Years
Rate of Interest

Current rate of interest is @ 7.75%.

Loan Against Property is normally available on both - Floating and Fixed rate of interest. Many banks and NBFC offer fixed rate of interest with a reset clause of 2 - 5 years which means that your fixed interest rate will be reviewed every 2 - 5 years and can be increased or decreased as per the terms and conditions mentioned in the agreement and floating rate based on the market conditions and effective repo Rate.


Most lenders offer maximum tenure of 15 years; however, it is also dependent on the borrower’s age at the end of the tenure so as to ensure that the loan repayment ends on or before the retirement age of the borrower which is usually 60 years for salaried and 70 years for self-employed borrowers.

Fees and Charges
  • The processing fee for Loan Against Property may vary from lender to lender but generally is from 0.45% to 1% (excluding service tax) of loan amount.
  • The loan can be foreclosed any time on the payment of applicable penalty, however, if the loan is taken on floating rate from the bank, then the borrower need not have to pay any foreclosure charges.

Documents check-list

KYC Documents
  • Identity
  • Age
  • Residence
  • Income
  • Property Documents including Title Deeds, Chain of Documents etc.

Our consultant will guide you for the exact list of documents (LOD) needed as per your profile.

Apply with us and get benefited


How does the lender decide the loan amount?

Bank or lender will verify your repayment capacity. To calculate your loan amount - your income, age, qualifications, family member's income, assets, liability, continuity in business or job and finally 80 - 90% market value of the property is considered.

Can I keep a Co-applicant?

Yes - you can keep your spouse or blood relative as a co-applicant which leads to increase your eligibility. But property owners or co-owners have to be there in the loan structure.

What is the Processing Charge?

Processing fee varies from bank to bank, however, most of the banks charge upto 1% of the loan amount.

How the rate of interest is calculated?

Interest is calculated on Daily Reducing Balance which reduces your interest on the reducing principle balance.

What tenure will I get?

Loans Against Property has a maximum tenure of 15 years, subject to the condition that it does not exceed your retirement age. This condition however can be flexible in certain cases.

How to repay the loan?

You repay the loan by EMIs which consist of Principle and Interest. EMI starts from the following month of the disbursement. You can do part payment too after 6 months as there are no charges.

What kind of security does the bank consider?

As the Loan Against Property justifies itself you need to mortgage your property for availing the loan. This mortgage is equitable mortgage by Memorandum of Entry by way of deposit of title deeds and/or such other collateral security, as may be necessary. Bank verifies the title of the property and if it is clear you can get the loan. There should not be any litigation.

What are the foreclosure charges?

Yes- you can foreclose your loan after 6months. Here, no foreclosure charge is applicable to individuals. You have to close it from your own funds. Few lenders charge if you do abalance transfer.

Always remember that Personal Loan should be taken only in case of
Extreme Urgency of Funds.

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