Loan Against Property Eligibility

You can use a Loan Against Property to fulfil all your financial obligations. If you are a salaried individual, you can use your loan for the following purposes:

1. Mortgage buyout/Balance Transfer of existing loan
2. Consolidation of debt
3. Managing wedding expenses
4. New investments
5. Financing education.

The eligibility of a Loan Against Property is calculated by taking the following parameters in to account:

1. Age
2. Income
3. Property value
4. Existing obligations, if any
5. Stability/Continuity of employment/Business
6. Past borrowing track record.

Yes, your property needs to be insured for fire and other calamities during the tenor of your loan. You will have to provide proof of insurance with us every year or whenever required.

No, income proof and ITR, both are mandatory documents that need to be furnished by a salaried individual to avail of a LAP.

You need to ensure that the title of the property is clear, free of any litigation, and should not have an existing mortgage or loan.

Yes, you can. All the co-owners of the property will be considered as co-applicants of the loan.

Your EMI consists of two parts—paying back the principal amount you borrowed, plus the interest rates charged ‘on’ it. Three factors come into the equation—how much you borrowed, the rate of interest, and the loan tenure. There are ways to bring your EMI down: for one, it drops automatically if there is a decrease in interest rates, or if you pay back more than you need to (called a ‘partial prepayment’).

You can easily increase the amount you pay in EMIs by visiting our Customer Portal.

An amortization schedule is a table giving the reduction of your loan amount by monthly instalments. The amortization schedule gives the break-up of every EMI towards repayment of interest and the outstanding principal of your loan.

When interest rates go up, the interest component of an EMI also goes up. The EMI is kept constant but will result in a lower principal component. If the rates move up continuously, then there might be a situation where the interest Component becomes more than the EMI. In such a situation, principal component (EMI minus interest component) gives a negative figure. Consequently, the outstanding balance, instead of being reduced from the opening principal with the principal component, gets increased with the negative principal component. This is commonly referred to as negative amortization. A loan where the amortization is negative does not get repaid, since the regular payments are insufficient to cover the interest component. The unpaid interest gets added to the principal and makes it grow. The situation gets reversed only when interest rates start falling. In this situation, the customer has to part-prepay the loan amount, increase the EMI of the loan, or do both.

In case of a loan with a floating interest, the interest component is subject to change. When the rates change, one of the following two changes can be done to a loan:

1. The term of the Loan is extended (when rates go up) or contracted (when rates go down).
2. The EMI amount is reset (increased in case rates go up & reduced in case rates come down).

As a practice, the term of the loan is extended since the customer might have given post-date cheques and it would be difficult to replace them on every rate change. However, in case of under construction properties, the Pre-EMI amount is increased by default. You can choose any of the above options according to your convenience. The default option is to change the EMI to match the balance tenure of a loan.

The pricing increase happens only in the scenario of an increase in the Cost of Funds. Pro-active repricing policy is being put in place as a proactive measure to ensure that there is no inordinate increase in your loan pricing against new acquisitions and there is always parity for your loan.

As a goodwill gesture and to maintain transparency with our valued existing customers, we ensure, through our pro-active downward re-pricing strategy, that none of our existing customers are more than 100 bps over and above the last 3 months average sourcing rate. If a customer is higher than 100 bps from our last 3 months average sourcing rate, we carry out downward re-pricing of the rate of interest for all such customers to bring them to max 100 bps above the last 3 months average sourcing rate. This is a bi-annual exercise. This is yet another Industry first for any NBFC in the country.

You can avail a Loan Against Property for the following:

1. Self-Occupied Residential
2. Rented Residential / Commercial
3. Vacant Residential / Commercial
4. Shared Property.

You can not avail a Loan Against Property for the following:

1. Plot
2. Property outside city/municipality limit
3. Property with tenants for more than 5 years (with no renewed rent agreement)
4. Property with structural flaws that requires substantial repairs
5. Property constructed on agricultural land/farm land
6. Illegal properties
7. Property already mortgaged with other banks
8. Residential property used for commercial purposes without approval from competent authority
9. Under construction property except NRP transaction
10. Industrial property
11. Schools or hostels
12. Hotel.

The TAT for issuance foreclosure statement is typically 7 working days.