Loan Against Property – Updated Guide 2025

Loan against property is one secured loan which is available for salaried borrowers and self-employed individuals to meet their personal or business needs. The borrower is required to mortgage their property as security. This property can be residential, industrial or commercial. The amount received from the loan can be used as per the borrower’s jurisdiction but the usage has to be mentioned in the application form. One can use it for education needs, business expansions, personal expenses like wedding or vacation and medical emergency. This loan is not granted for home purchase, renovation and expansion for which we have home loan.

Loan against property Eligibility

• Age: 21 years to 65 years
• Loan Tenure: Up to 15 years
• Net monthly income: Banks consider an income of INR 3 lakh pa for self-employed and Rs. 40000 monthly for salaried individuals.
• Employment type: Salaried individuals must have work experience of at least 3 years. Self-employed persons must have a business existence of a minimum of 3 years and ITR of 2 years.
• Interest rates: It varies in the range of 8.80% to 16% per annum
• CIBIL Score: A CIBIL score of 650 and above is considered good for a loan against property.

Documents for Loan Against Property

• Signed Application Form
• Identity Proof (PAN)
• Residential Address Proof
• Form 16 for salaried individuals
• Latest 3 months salary slip for salaried
• Last 6 months bank statement
• Last 2 years ITR for self-employed individuals

Type of Loan Against Property

Regular Loan against property: 

This is the basic loan which the borrower takes to meet any type of business and personal needs like:

• Business expansion
• Acquiring assets
• For marriage or any medical emergency

Lowest interest rates on Loan against property is 8.80%. Almost all banks offer loan against residential property while some banks also sanction loan again commercial property. A few banks also offer loans against industrial property.

Loan against property Overdraft: 

It is a great choice for businessmen with fluctuating funds as it allows them to deposit surplus amount in the loan account to reduce the interest liability.

How to get the best Loan against property

Fintech players like LoansJagat offer an excellent platform for comparing the loans provided by different banks under one roof on the parameters of interest rates, processing charges, terms and conditions etc and making the choice on the basis of this. This is a convenient, cost-effective and transparent way of getting a loan against property.

Step 1: Check loan eligibility and EMI

Checking on the loan amount eligibility and calculating the monthly EMI on the basis of net income and current obligations which one can pay comfortably is the foremost step for applying for a loan against property. The loan eligibility is calculated on the basis of age, income, obligations, property type, LTV ratio, etc. EMI is a direct result of the loan amount, rate of interest and tenure.

Step 2: Check property approval status and legal documents

It is important to check for the complete set of property documentation with all records and clean titles against the property against which the loan is being applied for. Loan against residential property are easy to obtain with lower interest rates in comparison to commercial and industrial properties.

Step 3: Decide on the type of loan against property interest rate offers

After getting through the eligibility and type of property against which you are taking the loan, check for the various interest rate offers of different banks.

• Check if the rate of interest is fixed or floating.
• Evaluate the overdraft facility option in case of a self-employed individual.

Compare the above aspects and rate of interest offered by different banks to make an informed decision.

Step 4: Compare other charges and loan parameters

Apart from interest rates, also check other additional charges which the banks charge like processing fees, insurance premium, prepayment charges, etc. Take help of LoansJagat.com to compare different banks on these accounts to make the best decision.

Step 5: Select the bank based on other service related parameters

Apart from the charges, also check for the transparency and customer service aspect of the banks. Your association with the bank offering you loan against property is going to be long so its better to choose a bank with quick loan delivery, transparent loan processing, and better customer services.

Process of Loan Against Property

After you are through with the research about the best loan offers and have shortlisted the bank, complete the loan process by following the given steps.

• Fill in the form with KYC and financial details. You can fill the form online at LoansJagat portal round the clock at your convenience.
• On account of your information, lenders will calculate your loan eligibility.
• Next, the banks will ask for additional documents like property documents, etc .
• Banks will proceed with legal and technical verification of property to check for the authenticity of documents.
• On the basis of the above assessment, if the bank is satisfied, it will grant you the loan and disburse it.