How much loan can be taken against property

How Much Loan Can You Opt Against Property?

Requiring a financial need but don't want to sell your property? A Loan Against Property (LAP) might be the solution for you! Compared to unsecured loans such as a personal loan, LAP are offered at a lower interest rate. 

Whether salaried or self-employed, you can opt for this mortgage loan. LAP also offers a higher loan amount than other borrowing options. To answer your question about how much loan amount can be taken against a property, read on as we explore the extent of loan amount you can get against your property and the factors affecting the loan sanction amount.

What Does Loan Against Property Mean? 

Loan Against Property (LAP) is a type of housing loan or finance offered by banks and financial institutions like Truhome Finance. It allows you to leverage the value of your property to secure a loan. Property owners can pledge their residential or commercial property as collateral and have access to substantial funds. The loan amount is determined based on the property's market value and the lender's specified Loan-to-Value (LTV) ratio.

If you possess a residential or a commercial property, it becomes an asset you can utilize as security for a loan when financial needs arise. Be it for expanding your business, funding your child's education, covering wedding expenses, or addressing a medical emergency, owning a property provides a convenient solution. Truhome Finance offers loan against property at competitive interest rates, allowing you to leverage your property's value to fulfil your aspirations.

What are the Features of Loan Against Property?

A loan against property comes with several features, making it an attractive option for people looking for immediate monetary resources. Let us look at a few of those features in this section:

• High loan-to-value (LTV) Ratio: LAPs typically offer a loan-to-value ratio in the range of 50% to 75%, depending on the lender and the property's location and condition, which means you can borrow an adequate amount of money for your needs.

• Flexible Loan Amounts: Loan amounts for loan against property can vary depending on the property's value, the borrower's income, and creditworthiness. 

• Long Repayment Tenure: LAPs typically have longer repayment tenures compared to other types of unsecured loans, allowing borrowers to spread out their payments over an extended period, making them more affordable. Repayment tenures can range from 5 to 20 years.

• Competitive Interest Rates: Interest rates for LAPs are generally competitive, often lower than those for personal loans or unsecured loans. Interest rates can vary depending on the lender, the loan amount, and the borrower's credit profile.

• Multipurpose Usage: LAPs can be used for a variety of purposes, providing flexibility to borrowers in addressing their financial needs.

• Collateral Security: LAPs are secured loans, meaning the property acts as collateral, reducing the lender's risk and potentially enabling them to offer lower interest rates.

• Flexibility in Prepayment: Many lenders allow borrowers to make prepayments on their LAPs without any penalty charges, allowing them to reduce their loan balance and interest payments faster.

Eligibility Requirement to Apply for a Loan Against Property

The loan against property eligibility calculation is determined by various factors, including income, age, employment type, credit score, and loan tenure. Given below are the eligibility criteria for loan against property:

• Nationality: The applicant must be an Indian citizen residing in India.

• Age:

         o For Salaried Individuals: Between 25 and 60 years old at the time of loan closure.
         o For Self-Employed Individuals: Between 25 and 65 years old at the time of loan closure.

• Credit Score: A CIBIL score of 700 or higher is preferred to qualify for an Truhome Finance Loan Against Property. Other lenders might have their own requirements for credit score.

• Occupation: Both salaried and self-employed individuals are eligible to apply for a loan against property.

Documents Required for Loan Against Property Application

Here is the list of documents that is usually required for the application for a loan against property:

Salaried

• KYC Documents: ID Proof and Address Proof

• Income Documents:

       o Last 3 months' salary slip or latest salary certificate
       o Last 6 months’ bank statement
       o Form 16

Self-Employed

• KYC Documents: ID Proof and Address Proof

• Income Documents:

     o Last 2 years’ Income Tax Returns (ITR) 
     o Computation of income 
     o Profit and Loss Account (P&L)
     o Last 6 months’ bank statement

How to Apply for a Loan Against Property with Truhome Finance

Applying for an Truhome Finance Loan Against Property is a simple 4-step procedure. You can initiate your application via our website or the Truhome Finance ACE app.

 Here are the steps to apply: 

       • Step 1: Register by providing your mobile number.

       • Step 2: Enter your personal information.

       • Step 3: Select the desired loan amount and tenure and submit your application for a loan against property.

       • Step 4: Our dedicated relationship manager will contact you to facilitate the processing of your loan against property application.

Final Thoughts

In conclusion, the amount of loan you can avail against your property depends on several factors such as property value, your income, and the lender's policies. It's crucial to assess your financial situation, evaluate your repayment capacity, and consider the loan-to-value ratio. 

Always work with a trusted lender and understand their terms and conditions. By doing so, you can make informed decisions and maximize the loan amount you can secure against your property while ensuring financial stability. Remember, every situation is unique; so, it is important to consult with professionals to determine the loan amount that best suits your needs and financial capabilities.

FAQs

Here are the answers to some of the commonly asked questions about loan against property:

1. Can I get a loan against property without income proof documents?

Yes, you can obtain a loan against property even if you don't have an income tax return. Nevertheless, you must demonstrate your capacity to make timely and complete EMI payments to secure approval for your loan request.

2. What is the maximum amount of loan that I can get on loan against property?

The amount sanctioned by your lender will vary based on the current fair market value and whether the property is residential or commercial. Truhome Finance generally approves a loan of up to 75% of your property's value, contingent upon its nature and market valuation. You can also use the loan against property eligibility calculator to get more details about the amount you are eligible for.

3. What is the minimum income required to avail an LAP?

To qualify, your monthly earnings need to exceed Rs 30,000. If you're a salaried worker, you should have a minimum of 2 years' work experience when applying. Similarly, if you're self-employed, you must demonstrate at least 3 years of experience in your field at the time of application.

4. Can you get a 100% loan against the property? 

To ensure security, lenders do not approve home loans with a loan-to-value (LTV) ratio of 100%. You can borrow up to 75% of the current market value of the property from a lender.

5. How is the loan amount against property determined? 

The amount of the loan secured by a property is usually calculated considering the property's market value, the borrower's ability to repay, and the lender's LTV ratio. The LTV ratio represents the percentage of the property's value that the lender is ready to fund. The borrower's income, creditworthiness, and other financial factors also play a role in determining the ultimate loan amount.