A Loan Against Property (LAP) can help property owners raise funds by using an eligible property as security. The loan can be used for different personal or business needs, depending on the bank's terms.
Interest rate is one of the main things to check when comparing Loan Against Property options. A lower rate can reduce the interest cost over the loan period. However, the actual rate offered by a bank can depend on factors such as credit score, income, loan amount, property and repayment tenure.
Here are 10 banks offering Loan Against Property in India, along with their published interest rates.
1. Federal Bank – Starting from 8.20% p.a.
Federal Bank offers Loan Against Property at interest rates starting from 8.20% p.a. The rate is subject to changes based on bank and RBI policies. The bank offers LAP for eligible residential properties, plots and commercial properties.
Federal Bank provides a maximum repayment tenure of up to 15 years. The facility is available as a term loan as well as an overdraft, subject to eligibility and applicable terms.
2. HDFC Bank – 8.30% to 12.75%
HDFC Bank's published rack interest rate for Loan Against Property, Loan for Commercial Property and Loan Against Rent Receivables is 8.30% to 12.75%. The floating rate is linked to the policy repo rate plus the applicable spread.
The bank also publishes a fixed interest rate range of 11.80% to 13.30% for the relevant product category. The actual rate can vary based on the borrower's profile and other factors.
3. ICICI Bank – 10.60% to 12.25%
ICICI Bank currently lists Loan Against Property interest rates based on loan amount and borrower category. For loans above ₹1 crore, rates are 10.60% to 11.25% for salaried and self-employed priority-sector customers and 11.10% to 11.75% for self-employed non-PSL customers.
For loans up to ₹50 lakh, the published rates range from 11.10% to 12.25%, depending on the customer category. These rates are linked to the repo rate.
4. Axis Bank – 9.15% to 10.25%
Axis Bank publishes different Loan Against Property rates for PSL and non-PSL categories.
For term loans, the effective floating interest rate is 9.15% to 10.00% p.a. for the PSL category and 9.40% to 10.25% p.a. for the non-PSL category.
For overdraft loans, the published range is 9.40% to 10.00% for PSL customers and 9.65% to 10.25% for non-PSL customers.
5. IDFC FIRST Bank – Starting from 8.75% p.a.
IDFC FIRST Bank lists its Loan Against Property interest rate as starting from 8.75% p.a. The bank states that the rate can change based on the borrower's profile, credit score, property type and RBI repo rate movements.
The bank offers LAP for different financial requirements, subject to its eligibility and lending conditions.
6. State Bank of India – Starting from 10.00% p.a.
State Bank of India offers Loan Against Property through its personal banking products. Its current product page lists a rate starting from 10.00% p.a. for the relevant loan product, with terms and conditions applicable.
Borrowers should check the specific SBI LAP product and applicable rate before applying, as the bank has multiple property-backed loan products.
7. Bank of Baroda – 8.90% to 11.50%
Bank of Baroda's Baroda Mortgage Loan for individuals currently has an effective floating interest rate of 8.90% to 11.50%.
The rate is linked to the bank's benchmark and depends on the risk rating of the applicant. The bank also mentions that additional rates may apply in certain cases, such as longer tenures or overdraft facilities.
8. Bank of Maharashtra – 9.70% to 10.70%
Bank of Maharashtra publishes different Loan Against Property rates based on the borrower's CIBIL score.
For individuals, the current effective rate ranges from 9.70% to 10.70% p.a. Borrowers with a CIBIL score of 750 and above are listed at 9.70%, while the rate increases for lower score categories.
9. Kotak Mahindra Bank – Starting from 9.75% p.a.
Kotak Mahindra Bank offers Loan Against Property at rates starting from 9.75% p.a. for salaried and self-employed customers.
The bank also lists a fixed rate of 12.50% p.a. onwards for existing customers switching from a floating rate to a fixed rate. The applicable rate can vary depending on the borrower and loan terms.
Summary
Interest rate is important, but it is not the only cost to consider. Before selecting a Loan Against Property, borrowers should also check the processing fee, repayment tenure, prepayment charges, loan-to-value ratio, eligible property and repayment options.
It is also important to check whether the rate is a starting rate or a range. A starting rate does not mean every borrower will receive that rate. The final rate can depend on the applicant's credit score, income, property value, loan amount and other factors.
Since Loan Against Property is secured against your property, compare the complete loan terms before making a decision. Rates and charges can also change, so check the respective bank's latest rate card before applying.
