Loan Against Property Interest Rate 2024

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Loan Against Property Interest Rate 2024

Get best deals on loan against property interest rate starting from 9% for up to Rs. 15 Crore. Avail approval on up to 70% of your property value for a maximum of 15 years.

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Updated: 13-05-2024 03:50:49 PM

Loan Against Property (LAP) Interest Rates 2024

Lender Interest Rate (p.a.) Tenure
HDFC Bank 9.50% – 11.00% 15 years
IDFC First Bank 9.00% – 20.00% 25 years
HSBC Bank 9.75% 15 years
Kotak Mahindra Bank 9.15% – 10.50% 15 years
PNB Housing 9.25% – 12.45% 20 years
State Bank of India 10.10% – 11.65% 15 years
Federal Bank 12.60% 10 years
Home First 12.80% – 18.50% 15 years
Bank of India 11.25% 15 years
Bank of Baroda 10.85% – 16.50% 15 years
IDBI Bank 9.50% – 11.45% 15 years
Central Bank of India 9.75% – 13% 10 years
Bank of Maharashtra 10.95% – 11.95% 10 years
Jammu & Kashmir Bank 11.45% 12 years
South Indian Bank 13.15% – 14.40% 21 years
YES Bank 8.85% 15 years
Bajaj Finserv 9% – 14% 15 years
ICICI Bank 10.85% – 12.50% 15 years
Canara Bank 10.30% – 12.80% 10 years
Allahabad Bank 10.10% to 11.75% 15 years
RBL Bank 9.50% 15 years
TATA Capital 10.10% 20 years
UCO Bank 10.85% – 12.00% 12 years
India Shelter Finance Corporation Ltd. 12.50% – 21.10% 20 years
Fullerton India 9.00% – 24.00% 15 years
Avanse 10% – 16.50% 10 years
Axis Bank 10.50% – 10.95% 20 years
Bajaj Housing Finance starting at 9.75%* 17 years
Andhra Bank 10.60% – 13.15% 15 years
Karur Vysya Bank 11.13% – 13.03% 15 years
Indiabulls starting at 9.75% 15 years
Indian Overseas Bank 10.90% – 11.40%  7 years
IndusInd Bank 8.75% – 14.58% 20 years
Muthoot Finance starting at 14.50% 20 years
Standard Chartered Bank 9.65% – 10.05%  20 years
Union Bank of India 10.60% – 13.15%  15 years

Loan Against Property EMI Calculator

Calculating LAP interest rates can be challenging, especially if you are not familiar with the loan’s intricacies. However, several online LAP interest rate calculators can help you determine the loan’s interest rate and the total cost. These calculators take into account various factors such as loan amount, tenure, interest rate, and processing fees.

Below are the LAP EMI details for 15 yrs for Rs. 1 Lakh at 9% p.a.

Year Opening Balance EMI*12 Interest paid yearly Principal paid yearly Closing Balance
1 1,00,000 12,171 8,866 3,305 96,695
2 96,695 12,171 8,556 3,615 93,079
3 93,079 12,171 8,217 3,955 89,125
4 89,125 12,171 7,846 4,326 84,799
5 84,799 12,171 7,440 4,731 80,068
6 80,068 12,171 6,996 5,175 74,893
7 74,893 12,171 6,511 5,661 69,232
8 69,232 12,171 5,980 6,192 63,041
9 63,041 12,171 5,399 6,772 56,268
10 56,268 12,171 4,764 7,408 48,861
11 48,861 12,171 4,069 8,103 40,758
12 40,758 12,171 3,309 8,863 31,895
13 31,895 12,171 2,477 9,694 22,201
14 22,201 12,171 1,568 10,603 11,598
15 11,598 12,171 573 11,598 0

Things To Know Before Taking A Loan Against Property

  • Property value: The loan amount to be sanctioned under the loan against property depends on your property’s evaluation done by the lending institution. The evaluation process usually consists of a property appraisal to assess the current market value of the pledged property. This is generally followed by the verification of the documentation by the lender to ensure that the property is fully constructed and freehold with a clear title. Usually, the amount sanctioned under a mortgage loan ranges from 50% – 75% of the appraised market value, known as the Loan-to-value (LTV) ratio.
  • Rate of interest: Usually most lenders offer loans against property at lower interest rates than personal loans and business loans because it is secured against property as collateral. Higher loan security and lower margin amount mean a lower property loan interest rate, as it reduces the probability of loss for the lender in case of default. You can reduce the secured loan interest rates cost further if the lender offers an overdraft facility and credit limit on your LAP. That is because in such cases, you are required to pay interest only on the amount withdrawn, and not on the whole amount.
  • Processing fees & other charges: Every loan sanction under loan against property involves a processing fee charged by the lender as per their policies. It may range anywhere between 0.5% to 3% of the sanctioned loan amount. The processing fee can either be charged upfront or deducted from the principal loan amount after the loan sanction. In addition, you must also consider looking at the documentation, part prepayment, foreclosure, interest rate switch and other charges involved in taking an LAP.
  • Processing time: You must take into account the processing time of a mortgage loan into consideration as these loans have relatively higher processing time, unlike personal loans, which can be processed within a few days or even minutes. This is because the pledged property has to be scrutinised for any encumbrances and evaluated.
  • Repayment: The loan repayment is another factor to consider. Typically, lenders offer a loan against property for flexible tenure of anywhere between 5 to 20 years, depending on the borrower’s age, income, loan amount requirement and other factors. Even though a longer tenure results in smaller EMI payments, it could also result in higher interest payments. A shorter tenure is more suitable for saving on interest payments.
  • Tax benefits: A salaried individual can benefit from loan interest deductions under Section 24(B) of the Income Tax Act if the loan amount is used for the construction of a new residential house. Also, if you are a business person, you may claim benefits under Section 37 of the Tax Act.
  • Lender’s eligibility criteria: Every lender has their own criteria to assess your eligibility for a mortgage loan. For instance, one lender may want you to be at least 21 years of age to sanction you a minimum of Rs. 30 Lakhs loan amount, whereas another lender may require you to be at least 25 years of age, but may sanction Rs. 50 Lakhs. Therefore, it is imperative to understand the lender’s eligibility criteria for an LAP before applying for the loan.
  • Credit score: Even though an LAP is offered against the pledged property, it does not mean lenders don’t look at your CIBIL score. A healthy credit score can help you get the loan sanctioned at a low collateral loan interest rate with better terms and conditions.

Key Factors Affecting Loan Against Property Interest Rates

If you look at the property loan interest rate all bank structure, 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.

Tips to Reduce Your Loan Against Property Interest Rates

You can follow the tips mentioned below to reduce your mortgage loan interest rates:

  • Look for the applicable mortgage loan lowest interest rates offered by different lenders on different loan amounts. Usually, the interest rate is lower for a higher loan amount.
  • Choose a suitable tenure as it has a direct impact on the interest rate offered by the lender.
  • Look out for financial institutions that offer the best interest rate offers on loans.
  • Do not apply for multiple loans simultaneously with various lenders as each application rejection will lower your CIBIL score, which leads to a higher home mortgage loan interest rate.
  • Opt for a loan amount that fits your affordability.

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Loan Against Property Popular Offers

Pre-Approved Loan Against Property @9% p.a

Up to Rs. 5 Crore loan against property can be availed by Salaried and self-employed applicants online as well as offline. The LAP can be used for applied for business expansion, long term working capital, debt consolidation, equipment purchase, medical exigency, education/ marriage of children, holiday and much more. Higher loan amounts are available for select customers.

Loan Against Property Interest Rate FAQs

Currently Home First (HFFC) is offering the lowest LAP interest rate which starts from 8%.

Both individuals and non-individuals can apply for Loan Against Property. Individuals can be salaried persons or self-employed people. The applicant should have unencumbered residential or commercial property in his/her name.

IDFC bank, Kotak bank, HDFC, SBI, Federal bank are some of the banks which are offering great deals on loan against property.

The different types of Loan Against Property are as follows:

  • Loan against residential property
  • Loan against commercial property
  • Loan against rent receivables

No, banks do not accept agricultural mortgage as a security for Loan Against Property.

The security is in the form of equitable mortgage of property. In the case of loan against rent receivables, the banks stipulate additional protection in the form of assignment of future rent receivables.

Yes, the CIBIL score has a significant bearing on deciding the rate of interest. Usually, banks stipulate a minimum CIBIL score of 650 or thereabouts. The higher your CIBIL score, the lower is the rate of interest.

Usually, banks do not offer Loan Against Property on a fixed-rate basis. However, HDFC has a loan product that provides a combination rate of interest. The TruFixed Loan product has a fixed rate of interest for the first two years, followed by a switchover to the floating rate.