On which types of properties can I get a Loan against Property

by varun · Published September 2, 2020 · Updated December 24, 2021

Loan against property

If you are going to banks to apply for a Loan against Property then you must understand the viability and technical details of the property you are going to put up as a mortgage. A Loan against Property is a product that is designed keeping in mind the property as a backup. Your property can be a deal breaker as well as deal maker in your Loan against Property application. Let us look at different types of properties on which Loan against Property is provided by Banks and lending institutions –

Registered properties with Map – A registered property with proper maps and clear sanction plan by town planning authority is one of the best mortgages considered in the banking industry. Virtually all banks and NBFCs provide Loan against Property for this kind of profile. These properties are considered to be a best bet as there is a clear and legal title of the property along with the sanction plan provided by town planning authority.
Registered properties without map – A second kind of property is a property that is registered without maps. In these kinds of properties banks usually look for risk lenitive like proper sale deeds and ATS. These properties have an inherent risk of no clear plan by town planning authorities. If you want to get a Loan against Property for these properties then, you should provide additional comfort to the Bank in the form of additional income or Co-Applicant.
GPA – GPA stands for general power of Attorney. It is a legal instrument that grants authority to one person to act on behalf of another person. This instrument doesn’t give any ownership on immovable property to a person being granted the authority. Banks and NBFC don’t provide a Loan against Property as GPA holders don’t have any legal ownership over the GPA property. In this case, you have to rely on certain HFCs that lend to GPA holders. Other options could also include an External Financiers but they would charge an exorbitant rate of interest.
Lal Dora land – Lal Dora villages are an integral part of Delhi property landscape. There are in total 360 villages in Delhi under Lal Dora. Lal Dora areas are that part of village that is left for livestock and residential purposes. Usually, No Banks or NBFCs provide Loan against Property for these properties. You can approach new age lenders like P2P platforms to fulfill your dream of getting a Loan against Property on your Lal Dora land.
Agricultural land – Agricultural land is specifically put under agricultural purposes only. You cannot get a Loan against Property for your agricultural land.

Adding to above points, Banks usually don’t lend to a property that is above 3rd floor and an empty plot. Banks also look for properties which are self occupied. Loan against Property is one of the easiest and finest ways to arrange funds. It offers Rate of interest which is lower compared to other options as well as longer tenure.