Loan Against Property Fees & Charges

A loan against property or mortgage loan considers your asset (real estate) and allows you to raise funding accordingly.

However, the borrower may have to incur additional costs apart from paying the principal and interest rate in full at the time of repayment. These additional costs usually make up for the services provided by your lender, deviation from the loan’s contract, penalties, or agreement fees.

Want to know how much would your final payment be?

Check out Kotak Mahindra bank’s loan against property EMI Calculator.

Kotak Mahindra bank practices the utmost transparency regarding the financial intricacies of our customers’ interests.

On this page, we list down the non-refundable LAP charges.

FEES AND CHARGES - Loan Against Property

Stage	Fee/Charge Description	Payable at	Amount in Rs.
Pre-disbursement	Processing fee (PF)	Application	1% plus GST and Statutory dues. (Non-refundable)
Pre-disbursement	Documentation Charges	Sanction	INR 10000 plus GST and Statutory dues
Post-disbursement	Copy of Any Documents
	Interest Certificate/ Statement of Account/ Amortisation Schedule	Event	Accessed via self-service mode on Mobile Banking/Net Banking/Whatsapp Banking: Free
	Charges for copy of any documents (No dues, Copy of property documents, etc.)	Event	Rs. 500 (plus taxes and any other applicable statutory dues)
	Charges for copy of any documents (Duplicate NOC)	Event	Rs. 100 (plus taxes and any other applicable statutory dues)
	List Of Documents	Event	Rs. 500 (plus taxes and any other applicable statutory dues)
	Any Other documents /letter (e.g. Subsidy Confirmation Letter, Credit Opinion Letter, Interest paid confirmation letter, etc.)	Event	Rs. 500 (plus taxes and any other applicable statutory dues)
	Change in Repayment mode
	Repayment mode/ Account swap charges	Repayment mode change	Rs. 500 (plus taxes and any other applicable statutory dues)
	Conversion Fee
	Switch Fee (Floating to Floating)	On conversion	Switch to lower floating rate(with/without change in Benchmark): 0.5% of the principal outstanding and undisbursed amount(if any) at the time of conversion with a cap of Rs. 10,000 (plus taxes and any other applicable statutory dues)
	Switch Fee (Floating to Fixed)	On conversion	Rs. 2500 (plus taxes and any other applicable statutory dues)
	Rescheduling of Loan Tenure	On conversion	Rs. 500 (plus taxes and any other applicable statutory dues)
	Prepayment Charges
	Prepayment/Foreclosure Charges	Prepayment/ Foreclosure	NIL Floating Rate for Term Loans given to Individual Borrowers for non-business end use.
			For Micro & Small Enterprises (MSE)/ Micro Small & Medium Enterprise(MSME)/Individual Borrower:
			TYPE	Source	Loan Amount (SOH)	Rate	End Use	FC Applicable	FC Charges
			Individual	Own Fund / Balance Transfer	Any Loan Amount	Fixed	Business / Personal	Yes	1% of each year of residual period to original maturity at the time of prepayment of the loan shall be levied on the pre-payment amount, max cap of 3%
			Individual	Own Fund / Balance Transfer	Any Loan Amount	Floating	Business	Yes	0.02
			MSE	Own Fund / Balance Transfer	Any Loan Amount	Floating	Business	No	-
			MSE	Own Fund / Balance Transfer	<= 50 Lakhs	Fixed	Business	No
			MSE	Own Fund / Balance Transfer	> 50 Lakhs	Fixed	Business	Yes	0.02
			Medium	Own Fund / Balance Transfer	Any Loan Amount	Fixed or Floating	Business	Yes	0.02
			· FOR DOD utilized limit to be considered for FCC
			· FOR TL current O/S to be considered for FCC
			· This is also applicable for Part Payment of minimum Rs. 25,000 and maximum of up to 25% of outstanding loan amount can be made without any prepayment charges once in every 6 months.
			· Others (Individual borrowers for business end use and Non-individual borrowers) : 2% (plus taxes and any other applicable statutory dues) of the Foreclosure Loan amount plus amounts prepaid during the last 12 months
			· The borrower shall be required to submit the Bank any suitable proof of funds being from own sources.

			Others (Individual borrowers for business end use and Non-individual borrowers) :

			• No prepayment / foreclosure is allowed until a Lock-in Period of 6 months after EMI Commencement
			• Post lock– in period, part prepayment of minimum Rs. 25,000 and maximum of up to 25% of outstanding loan amount can be made without any prepayment charges every 6 months
			• The minimum period between any two prepayment shall be at least 6 months
			• For any Part Prepayment in excess of 25% of outstanding loan amount: 2% (plus taxes and any other applicable statutory dues) of the excess prepayment amount
			• For Full Prepayment any time after the Lock-in-Period: 2% (plus taxes and any other applicable statutory dues) of the Foreclosure Loan amount plus amounts prepaid during the last 12 months
	Penal charges
	Instrument (Cheque/ECS/Mandate) dishonour charges	Instrument dishonour	INR 750/- per instance
	Delay/default in payment of principal or interest/ outstanding balance.	Late payment	8% pa on overdue amount plus applicable taxes
	Non-payment of dues/ charges/ fees payable under loan/facility Agreement.	Late payment	8% pa on overdue amount plus applicable taxes
	Other charges
	Levy of penal charge for non-compliance of sanction terms including but not restricted to non-submission of title documents, non-commencement of construction as per undertaking, adverse repayment behaviour, other breach of agreement terms	Event	Rs. 5.50 per day per lac + applicable taxes or proportionately shall become due & payable on underlying exposure (from the day of breach).
	Delay or non-creation/perfection of facility or security/guarantee, etc. documentation in favor of the Bank.	Event	Penal charges at Rs. 5.50 per day per lac + applicable taxes or proportionately for any delay beyond stipulated days as per Sanction letter /Facility Agreement upto 180 days from the original due date (“ODD”)

			Beyond 180 days, penal charges at Rs. 11 per day per lac + applicable taxes.
			(The said penal charges shall be calculated on sum of limits of revolving lines and outstanding of non-revolving lines of both fund and non-fund based limits to which the security extends)
			The term non-creation of security shall mean failure of the Borrower/Security Provider to create security in such form and manner as per the agreed terms mentioned in Sanction letter /Facility letters or Facility /Loan Agreements or any other document/instrument to secure the loan/financial facility availed from the Bank.
	Legal charges	Event	As Incidental/ At Actuals
Charges specific to OD (Overdraft) facility
Post-disbursement	Annual Renewal Charges	Renewal	0.25% (plus taxes and any other applicable statutory dues) of the OD limit (dropped limit after reduction of annual drop) shall be collected on the due date of renewal.
	Annual Renewal Charges	Renewal	Not Applicable for Smart Home Loan OD product.
	Non-utilization Charges	Event	If average utilization of facility limits for a quarter is below 25% of sanctioned limits,
	Non-utilization Charges	Event	0.40% pa on average non-utilize amount
	Penal charges in case of overline accounts or where the amount drawn by the Borrower is beyond the maximum Overdraft Limit	Over withdrawal	8% pa on overdue amount plus applicable taxes

Notes:

Stamp Duty on Loan Agreement, Overdraft Agreement, Guarantor Agreement, Registration Charges etc. varies from State to State. Stamping/Notarisation of RBI and other Affidavits as applicable
Charges for other Services would be specified as applicable when the Customer applies for those services and the same shall be payable by the borrower alone e.g. Revalidation of Sanction, Change in Property, Reschedulement of Loan, Change in EMI Date, Solvency Charges etc
Taxes/ other statutory levies may be charged to the Borrower if applicable as per Government/ RBI directives

Click here to refer to the General Schedule of Features and Charges (GSFC) for your loan against property (revised w.e.f. August, 2024).

As you can tell, the loan against property interest rate isn’t the only cost you have to pay while taking a LAP. Many lenders would lure in borrowers with quick disbursement promises or low-interest rates. However, they later charge them heavily with other costs, or worse, they refuse to cooperate. Consequently, you would not be able to do much else but play by their rules, given your real estate would now be in their seize.

It is, thus, a better idea to choose a lender who offers standard rates of interest but is transparent and reputed for proper borrower handling. Kotak Mahindra Bank is a reputed name in the banking and lending sector with thousands of happy customers in our lending books. We aspire to help you find your financial and business goals using our LAP, which comes at nominal and transparent fees.

We recommend our customers to not base their decision solely on the LAP interest rates. Secured loans have a lower interest rate. And since you have raised collateral, you would be getting a much lower interest on the loan than unsecured loans.

Please read the other applicable LAP charges. Given that you will pledge your hard-earned property’s documents in the mortgage loan, and your investment is in tow, you must read all the clauses and papers carefully.

To view the usual documents required for loan against property.

General Questions

1. What are pre-payment charges for a LAP loan?

Various factors determine the principal and interest of a loan against property. The age and nature of your property, your income status and source, your age, and the amount you are seeking are some of the critical factors.

For more certainty, you can use the loan against property eligibility calculator here.

2. Which overdraft facilities do we get for mortgage loans?

As you will have a pre-payment fee in most cases, borrowers often see pre-payment unfavorably.

Though a borrower may have the finances to retire the loan entirely, they would continue to pay interest on it simply to avoid the additional pre-payment charges. However, retiring your debts is always a smart financial move.

Therefore, Kotak Mahindra Bank offers an overdraft (OD) facility to those who would like to get free of all debt and pay off their liability early.

OD on loan allows you to withdraw or deposit as and when you want. It is ideal for those who have variable incomes and want to utilize their periodic surplus to pay off the loan. The best part is you can always withdraw your surplus whenever you need it. But, having paid it up in advance would not attract pre-payment fees if you have an OD facility from your lender.

However, please note that loans with OD facilities do not qualify for an income tax rebate under Section 80C of the Income Tax Act, 1961. Moreover, they would also have a higher interest rate than loans without overdrafts or term loans.

For a loan against property, Kotak Mahindra bank gives its customers an option to choose the OD facility.

Would you like to check your loan against property eligibilty?

FAQ's

What are the processing fees for a loan against property?

The processing fee is a one-time non-refundable fee charged for the services provided to process the loan. It is payable at the time of application, and most banks in India charge 1-2% of the total loan amount as processing fees.

At Kotak Mahindra Bank, we charge 1% + GST + statutory charges in processing fees.

What are the documentation charges for a loan against property?

A loan applicant has to pay the documentation charges while submitting his paperwork for the loan application. At Kotak Mahindra Bank, we charge INR 10,000/- + GST + Statutory dues in documentation charges. The interest rate can be another decisive factor while choosing the right LAP loan.

At Kotak Mahindra Bank, we charge 1% + GST + statutory charges in processing fees.

What are the charges I need to pay to foreclose my loan against property?

The 2014 RBI Circular mandates that no foreclosure charges will be levied on individual borrowers seeking floating loan interest rates. However, for individual borrowers who have loans at fixed interest rates or joint borrowers with floating rates, there will be foreclosure charges applicable if the loan is retired before its schedule.

You can refer to the table above to check out our charges.

What is an overdraft facility for a mortgage loan?

There are two types of loans against property available with Kotak Mahindra Bank: Overdraft and Term loan.

In a term loan, you get a specific amount that you will have to pay at specific time intervals and a fixed interest rate. In the overdraft facility, one gets the option to choose when and if they want to withdraw. You only pay interest on the amount you withdraw, and that too, if repaid in 24 hours, attracts 0 interest. Moreover, with an overdraft facility, one can pay off their loan partly or in full beforehand without attracting additional charges.

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Loan Against Property Fees and Charges