Loan against property is available for both salaried and self-employed borrowers to help them fulfil their business and personal needs by mortgaging their property. You can take a property loan against residential, commercial or industrial property. As a borrower you are required to declare the end use of the loan in its application form.

Purposes for which loan against property is a good option	Purposes for which loan against property is not a good option
Business expansion	Home purchase
Child education	Home construction
Personal expenses such as wedding or vacation	Home renovation
Medical emergency	Plot purchase

Points to remember are:

• Loans for home construction or purchase are available at a lower rate of interest under a home loan as against a loan against property.
• Banks will take an end use undertaking on the loan against property and will also check the actual usage of the loan on a regular basis.
• Top up loans taken on existing loans against property can be used for purposes such as business expansion, education, medical expenses etc.

You can avail loan against property to fulfil personal needs such as financing your child`s education, manage wedding expenses or for business expenses including expansion of business, manage day-to-day operations etc. Some of the features and benefits of a loan against property are mentioned below:

You may be eligible for property loan in India from one or more banks if you meet the following eligibility criteria:

• Age: To avail loan against property, you should have a minimum age of 18 years and maximum upto 70 years. However, there are some banks which also give loans to individuals of 18 years and /or individuals up to 70 years of age.
• Tenure: You can avail loan against property for a maximum tenure of 15 Years.
• Income: Banks prefer a minimum income of ₹ 10,000 for salaried persons and ₹ 3 Lakh per annum for self employed.
• Work Experience: For salaried applicants, the minimum work experience required is 3 years. For self employed, business existence of minimum 5 years and ITR of 3 years is required .
• LTV: Banks typically give loans against property for a LTV of 1% and it varies based on the type of property.
• CIBIL Score: Banks consider 650 and above credit score to be eligible for loan against property.

The rate of interest on loan against property varies based on the profession. For instance, lenders provide loans at a higher rate of interest to salaried people than self-employed or businessmen.

Salaried	6.90%
Self-Employed	15.00%

To get the best loan against property at the lowest rate without any hassle, follow the tips as mentioned below:

• Check loan eligibility and EMI : To avoid any chances of rejection, you should estimate your loan eligibility on various factors, including your age, net income, existing obligations, property type, LTV ratio etc. Also, calculate the monthly EMI that you can easily repay based on your current net income and financial abilities.
• Compare Rates : To avail loan against property at the lowest rates, you must compare rates of all banks. In addition, you should also make a detailed comparison of all the additional charges with a Loan against property, including prepayment charges, processing fee, insurance premium, and other charges.
• Type of Loan against Property Interest Rate offers : Once you have a sense of your eligibility and the property you can borrow against, you need to choose between fixed and floating rates. Fixed rates come at a slightly higher interest rate than floating-rate loans, and the interest rate remains constant during the tenure of a property loan. In floating rate loans, interest rates are reset at periodic intervals in response to changes in external benchmark rates such as the repo rate.