A Quick Guide on How to Secure a Loan Against Property? - Home Loan Stories | Kotak Mahindra Bank
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09 JUNE, 2021

A Loan Against Property is a type of secured loan, wherein borrowers can pledge their property as a collateral with the bank to avail the loan amount. The pledged property can be either a residential, commercial, or an industrial one. With a Loan Against Property, it’s possible to avail a loan amount up to 65%-85% of the property’s value. Moreover, since a Loan Against Property is a secured loan, the interest rate charged is lower as compared to unsecured loans like a personal loan.

Eligibility Criteria for Loan Against Property

Salaried individuals                                                                

  • You should be an Indian resident
  • Minimum monthly income of Rs 40,000 and above is required
  • You should belong in the age bracket of 18 – 60 years
  • Graduate degree is required if you are employed with a private limited company or partnership firm. No such criteria in case you are employed with Public limited company or MNC or Government or Public Sector Company.


Self-employed individuals

  • Minimum annual income of Rs 1.80 lakhs or above is required. Moreover, the business should be operational for the last three years.
  • You should be at least 21 years old while applying for a home loan, and maximum 65 years old at the time of loan maturity
  • It is essential that your business shows a consistent profit for the last 2 years

The process of availing a Loan Against Property usually involves heavy documentation. It’s advisable to keep all the necessary documents handy at the time of application. Some of the basic documents required are mentioned below:

Documents for Availing Loan Against Property

Salaried Applicants:

  • Duly filled application form
  • PAN Card
  • Identity proof: Driving License/ Passport/ Aadhaar card /Voter's ID
  • Address proof: Passport/Driving License/Voter's ID/ Utility Bill
  • Property ownership proof: Agreement Copy / Electricity Bill / Maintenance Bill
  • Relationship proof: if same cannot be proved from submitted KYC documents
  • Income proof for self-employed applicants:
    • audited financial for last 3 years,
    • last three years Tax Audit Report,
    • latest VAT/GST/Service Tax returns for current financial year,
    • breakup of all secured and unsecured loans,
    • as on date list of directors and shareholding pattern,
    • existing loan sanction letters and their corresponding EMI reflecting bank statement for last 1 year
    • Last 1 year bank statement for business accounts
  • Business Continuity Proof for self-employed: shop and establishment certificate/Tax registrations-VAT/Service tax/GST registrations
  • Firm Constitution for self-employed: MOA/AOA/Partner Ship Deed/GST Registration Certificate/Form 32 for knowing latest directors
  • Income proof for salaried applicants:
  • Latest 3 months’ Salary Slips,
  • latest Form 16 employment proof (Appointment Proof) only if current employer name does not match with that of the Form 16 submitted,
  • Latest 6 months Bank Statement reflecting Salary as well as existing EMI repayment


While applying for a Loan Against Property, ensure to make a note of the following aspects.

Things to Consider While Availing a Loan Against Property

Loan amount

As Loan Against Property is a secured loan, you can avail a significantly higher loan amount as compared to unsecured loans. Review your finances and borrow the amount that meets your requirements. You can avail a Loan Against Property between Rs 10 lakhs and Rs 5 crores depending upon your property’s value.

Loan tenure

Ensure to make a note of the loan tenure before applying for a Loan Against Property. The longer your loan tenure, the lower will be your monthly instalment. Also, Loan Against Property interest rates are lower and hence your overall repayment is smaller. You can get an estimate of your EMIs using an online EMI calculator. You can avail a Loan Against Property with us at Kotak Mahindra Bank for a maximum tenure of 15 years.

Interest rate

The rate of interest determines your repayment ability. Make sure to choose a lender that offers you a lower interest rate, as it will help you save a large sum in the long run. To clear your loan faster, consider a lender with flexible prepayment terms. Additional charges should also be kept in mind as some lenders may offer low interest rates but charge extra fees like processing fees or prepayment charges.

At Kotak Mahindra Bank, it’s possible to avail a Loan Against Property in a hassle-free way. All you have to do is fill an online application form consisting of your personal and employment details. Our representatives will get in touch with you and guide you with the further process. However, before you go ahead and apply for a Loan Against Property, make sure that you check the loan eligibility criteria mentioned above in order to reduce the chances of a loan rejection.  

Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.

 

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.