Loan Against Property Must read

LOANMONEY assist you in obtaining Loan Against Property (LAP) by mortgaging your residential house or commercial property or industrial property (ies), to get your cash liquidity at cheap rates. It is secured loan on property where bank gives highest loan possible on your loan repayment capacity with lowest Rate Of Interest (ROI)

Salaried / Self Employed/ Professional can avail loan against property and land from Banks/ NBFC, which in turn keeps collateral security of property/ house / factory by mortgaging it. Loan amount is repaid as Equated Monthly Instalment (EMI)

Comparison of best deals for loans with Rate of Interest (ROI), tenure, loan amount from various banks and NBFC is provided by for your ready references.

  • Normal Term Loan: Secured mortgage loan on property of borrower where whole amount is given to borrower in lump sum and borrower pays back in EMI which includes Principal loan amount as well as Interest on loan.
  • Overdraft loans (Drop Line OD/ Secured OD) Loan amount borrowers is eligible is kept in new current account opened by bank. Interest is charges on actual withdrawn by borrower. Rate of interest charged is slightly higher say 0.25% - 0.50% than normal LAP. However if borrower can save additional amount from his earning and keep in current account, then he can considerable save on actual interest paid over the tenure of loan.
  • Expand your business
  • Renovate your home.
  • Buy a property on which loan is not available.
  • Refinance or Balance Transfer (B.T) on lower rate.
  • Plan a dream wedding.
  • Fund your child's education.
  • Holidays and much more.

Mortgage or Loan against property is given as a certain percentage of the Market Value (M.V/ L.T.V Loan to Value) of the property which is generally between 50% and 65%. In case of land/ Commercial Property value to loan amount varies between 50 -65%. This loan belongs to the category of secured loan where there is a guarantee given by the borrower who uses the property as a collateral security. In the event of non paying the loan on schedule, bank after serving proper notices can repossess the property.

Finance on property mortgage can be from 10 Lacs to 5 Cr: It is calculated on EMI paying capacity of the borrower. In general, a person is assumed to be eligible to pay EMI up to 50-55% of total monthly earnings. Therefore for the purpose of obtaining the maximum loan amount a borrower is eligible to obtained by considering:-

  • Total Income: Income/ Earnings from all sources including rent and interest for a month
  • Existing liabilities: EMI on current loan of all types in a month
  • Net amount available to pay EMI for Proposed loan
  • 50-55% of balance left.
  • Rate of interest and tenure on per Lacs factor.
  • Balance amount as above divided by factor per month.


Loan on Property has the greatest advantage over personal loan in terms of :-

  • Amount of loan : Loan against property may get loan upto 5 Cr as against loan of 20 Lacs as personal loan.
  • Tenure and : Mortgage loan tenure is for Max 15 Yrs whereas Personal Loan / Business Loan is for 5 yrs
  • Rate of interest: Secured loan on Property rate of interest ranges from 11.5% to 13.75% whereas Personal Loan rates are 16-18%, and Business Loans rates are 18-20%.
Click Here to Download Checklist before taking Mortgage finance on property
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