Urban Money

IDBI Bank Loan Against Property

IDBI Bank
4.5

Customers of IDBI can obtain loans against property through a unique loan programme. With an IDBI loan secured by property, interest is saved. The loan amount may be utilised for personal, business, and educational expenses, among other things. The usage of the borrowed amount is not constrained in any way. Both professionals and non-professionals with salaried and independent employment are eligible for the loan.

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Loan Against Property Banks

Interest Rate

Processing Fee

Rating

Loan Amount/Tenure

IDBI Bank Loan against property Interest Rate

IDBI Bank

8.1%

Up to 1%

4.5

Up to ₹10Cr

Details

Features and Benefits of IDBI Bank Loan Against Property

The features and benefits of IDBI Bank Loan Against Property are given below:

  • The applicant's existing property is used as collateral for the loan.
  • The loan can be used for anything, from business expenses to necessities for schooling.
  • The prices are comparable
  • There are three types of loans available: regular, interest-saving, and an overdraft.
  • The applicant's bank's Flexi Current account is connected to the loan account.
  • The loan is open to salaried, independent, and unemployed professionals living in India.
  • Amounts of large loans up to Rs. 10 crores
  • loans for a maximum of 15 years
  • A borrower can apply for IDBI Bank Loan Against Property
  • Simple and straightforward application process
  • Dedicated customer service team

IDBI Bank Loan Against Property Overview

As the name suggests, a loan against property refers to the money borrowed by keeping a property as collateral. IDBI Bank Loan Against Property service allows a borrower to meet their financial objectives by taking a loan against their commercial or residential property. The IDBI Bank LAP loan also comes with an overdraft facility. This assists a business in fulfilling their short-term working capital requirements like procurement of raw materials, stock maintenance, salary or wage payments, etc. The IDBI Bank LAP interest rate is quite competitive in nature.

This guide covers the IDBI Bank Loan Against Property eligibility, documents required, fees and charges, among others. Read on to learn more about IDBI Bank LAP.

Eligibility Criteria IDBI Bank Loan Against Property

IDBI Bank Loan Against Property eligibility criteria is given below:

Eligibility For Loan Against Property (Overdraft)

  • A self-employed professional must be a merchant, small & medium scale manufacturer, service provider, etc.
  • A self-employed non-professional must be a proprietor, partnership firm and closely held limited/ private limited company but excluding HUFs, Trusts, AOPs and NGOs.

Eligibility For Loan Against Rent Receivables

  • Property owners with properties in metro areas, urban areas, semi-urban areas, and rural areas who have rented or leased their properties under a recorded lease deed, leave and licence agreement, or to reputable corporate houses, banks, financial institutions, insurance companies, multinational companies, warehouses, large retail outlets, people engaged in trade, commerce, and business, professionals, self-employed, and high-income households
  • Future rentals would also be taken into account for the remaining lease term in the following proportion of future lease rental receivables:
Up to 3 years 85%
3 years to 5 years 75%
5 years to 7 years 65%
7 years to 10 years 55%

Factors Affecting IDBI Bank Loan Against Property Eligibility

There are many factors that influence the IDBI Bank Loan Against Property eligibility. Some of them are explained below:

Loan Amount

The period of the loan directly relates to the loan amount you need. Usually, the loan amount increases as the loan duration lengthen. The EMIs are cheaper since the loan amount is stretched out over a longer length of time, making it easier to repay loans. This reduces the strain of payback on your monthly budget.

You have a better chance of getting accepted for a bigger loan against your house if the duration is longer. To figure out your eligibility and the best loan term for your requirements, use online calculators.

Credit Score

The most crucial factor in determining your eligibility for a loan against property as well as the interest rates you will pay on your LAP loan is your credit score. You need to have a credit score of at least 750 to be eligible for attractive interest rates.

Lenders may view you as a high-risk borrower and charge you a higher interest rate if your credit score is poor. Additionally, if your credit score is much below the acceptable level, your loan application can be denied.

Documentation

Financial lenders will almost probably verify that you have the required paperwork for the property, such as approvals from local authorities, environmental clearances, building plans, etc., before disbursing the loan.

Age

​​The borrower's capacity to repay the debt is significantly impacted by their age. The likelihood of your loan application being denied increases if the borrower has attained or will attain retirement age in the foreseeable future. You can always look for loans with a shorter term in these circumstances, but the EMI will be higher.

Income Tax Returns

Lenders often ask for the most recent three years of income tax returns from borrowers who are self-employed. Even if your income is substantial, the lender won't be able to confirm your consistent stream of income in the absence of sufficient ITRs, which will reduce your chances of being approved.

IDBI Bank Loan Against Property Interest Rates

A borrower must be aware of the interest rates charged by the bank, so they make their decision wisely. Interest rates can be used to compare different lenders. The IDBI Bank Loan Against Property interest rate can be found in the table below:

Residential property 9.85% p.a. to 10.85% p.a.
Commercial property 10.35% p.a. to 11.10% p.a.

Note: The IDBI Bank LAP interest rate mentioned in the table above is dated December 2022.

Factors Affecting IDBI Bank Loan Against Property Interest Rates

There are many factors that affect a bank’s LAP interest rate; IDBI Bank is no different. A borrower must know these factors so they can weigh the costs and get the best interest rate. The following factors affect IDBI Bank Loan Against Property interest rate.

Property Type

Property type influences the interest rate. Real estate comes in two different varieties - commercial and residential properties. Commercial real estate might include office buildings, factories, and industrial facilities. Residential property, on the other hand, might include homes, apartments, and residential land. The IDBI Bank LAP interest rate varies according to the type of property the borrower is using as a mortgage.

Loan Type

The type of loan required and the property type are linked together. The IDBI Bank LAP interest rate will reduce if the property is in an upscale neighbourhood with all necessary amenities within one kilometre. The rates will be higher if a property is located in a less desired area, such as the suburbs of a city. Similar to the previous point, the lender is less likely to approve a mortgage loan application if the mortgaged house is situated in a rural location.

External Factors

The interest rate may also be influenced by outside variables such as the Reserve Bank of India's (RBI) monetary policy, the inflation rate, and the pace of economic expansion. The intriguing thing is that every external factor affecting the interest rate on your loan against property is connected in some way.

The RBI changes its monetary policy if inflation increases. It increases the repo rate and the Cash Reserve Ratio (CRR), increasing the cost of borrowing. The RBI takes this action to control prices by limiting the flow of cash through the economy.

Simply defined, the cost of obtaining a loan against property increases if the economy experiences a setback.

Lender-Borrower Relationship

Your relationship with the lender can affect your loan even in the digital age. The lender's comprehension and trust improve the longer the connection. You can be qualified for a lower interest rate if you already have credit with the lender and are making on-time payments on your loans. But the lender can have a rather strict credit evaluation procedure that drives up the interest rate for new clients.

Occupation

People who regularly change employment have a harder time qualifying for low-interest loans. The same is true for entrepreneurs. Regular job changes are a sign that your career is still in transition. It also suggests that you might later face difficulties making your loan payments.

IDBI Bank Loan Against Property Fees and Charges

A borrower must go through the fees and charges levied by the bank before they apply for IDBI Bank Loan Against Property. There might be hidden or underlying charges that may influence their decision. However, these charges can not be avoided and are charged by the bank to carry out the application process. IDBI Bank LAP loan has the following fees and charges.

Foreclosure Charges

Floating Rate plus Applicable Taxes

Loan Against Property to individuals for non-business purpose NIL
Loan Against Property to individuals for business purposes and non-individuals
  • 3% on the sanctioned loan amount up to 12 months of the first disbursement
  • 3% on the outstanding loan amount  beyond 12 months of first disbursement

Fixed Rate

Own funds
  • 2% on the outstanding loan amount within 6 months from final disbursement
  • No charge after 6 months from final disbursement
Balance transfer 2% on the outstanding loan amount 

Processing Fees

The following fees will have additional applicable taxes:

All Loan Amounts 0.50%-1.00% of the loan amount subject to a minimum of Rs.10,000
Inward Balance Transfer cases 0.50% of the loan amount subject to a minimum of Rs 10,000  
Minimum fee at the time of login  Rs. 10,000 plus applicable taxes to be collected at the time of login and the remaining amount to be collected before disbursement.  
LAP OD renewal charges  0.25% of the sanctioned amount

Other Fees and Charges

Penal charges 2% per annum for overdue amounts and overdue periods

Note: The above-mentioned fees and charges are as of December 2022 and the bank may charge a few additional fees as well.

Documents Required for IDBI Bank Loan Against Property

The documents required for IDBI Bank Loan Against Property are given below:

Salaried Individuals

  • Application form with photograph
  • Identity and residence proof
  • Latest salary slip for last 3 months
  • Form 16/ITR
  • Last 6 months’ bank statements
  • Property-related documents

Self-Employed Professionals

  • Application form with photograph
  • Identity and residence proof
  • Education qualification certificates and proof of business existence
  • Last 3 years’ income tax returns
  • Last 3 years’ profit/loss balance sheet
  • All title-related documents, along with approved/sanctioned building plans

Self-Employed Non-Professionals

  • Application form with photograph
  • Identity and residence proof
  • Proof of business existence
  • Business profile
  • Last 3 years’ income tax returns
  • Last 3 years’ profit/loss and balance sheet statement
  • All title-related documents, along with approved/sanctioned building plan

How does the EMI calculation work for IDBI Bank Loan Against Property?

With the help of an online IDBI Bank loan against property calculator tool, calculating the EMI is now simple. This will include information on the loan's size, term, and the IDBI Bank LAP interest rates that were used. The EMI calculator enables consumers to receive a quick overview of how their expenses are set up. This is a key piece of information that may be used to assess the affordability of the IDBI Bank Loan Against Property.

Users can also schedule their finances according to the cycle of recurring expenses. Typically, a mathematical formula is used to calculate the interest rate for IDBI Bank Loans Against Property.

{P x R x (1 + R) ^ N} whole divided by { (1 + R) ^ N (N - 1) }

Here,

  • ‘P’ represents the Principal amount
  • ‘R’ represents the rate of interest
  • ‘N’ represents the loan tenure. 

How does IDBI Bank compare with other lenders?

IDBI Bank is one of the top banks in the country. They provide excellent financial services and products, and their clients love them. The comparison between IDBI Bank LAP and other banks has been drawn in the table below on the basis of interest rates.

Bank Name  LAP Interest Rates per annum
IDBI Bank 9.85%
HDFC Bank 8.50%
ICICI Bank 9.75%
Axis Bank 9.40%
Citibank 7.95%
PNB Housing Finance 8.75%
LIC Housing Finance 8.85%
Kotak Bank 9.50%
Yes Bank 8.95%
Bajaj Home Finance 8.10%
IDFC First Bank 7.00%
RBL Bank 7.90%
Syndicate Bank 9.95%
Piramal Housing Finance  11.50%
Bank of India 9.75%
India Bulls  9.25%
UCO Bank 9.45%
South Indian Bank 7.50%
Lakshmi Vilas Bank 11.00%

IDBI Bank Loan Against Property Customer Care Number

A borrower may find themselves entangled in the maze of loan against property. Thanks to IDBI Bank’s customer service, any issues related to IDBI Bank LAP can be resolved quickly and in a hassle-free manner. A borrower can reach out to customer care with the following help.

Registered Office- IDBI Bank Ltd. IDBI Tower, WTC Complex, Cuffe Parade, Colaba, Mumbai 400005.

Non-Toll Free Number- +91-22-67719100

Toll-Free Number- 1800-209-4324 and 1800-22-1070 (24x7 service)

FAQs

From refinancing to reducing your interest, we have the answers right here.

What is the interest rate of a loan against property in IDBI Bank?

IDBI Bank LAP interest rate for residential property and commercial property ranges from 9.85% p.a. to 10.85% pa and 10.35% p.a. to 11.10% pa, respectively.

What are the benefits IDBI Bank Provides on loans against the property?

The major benefit of IDBI Bank LAP is that a borrower can borrow up to INR 10 crores against their property. Follow our guide to know more about its benefits.

Does IDBI Bank have a fixed rate of interest on a loan against property?

No, the IDBI Bank Loan Against Property interest rate is not fixed.

How to check loans against property status in IDBI Bank?

A borrower can check their IDBI Bank loan against property on the official portal of the bank.

Does IDBI Bank Check for CIBIL Score for loans against the property?

Yes, IDBI Bank checks for CIBIL score for loans against property.

What is the maximum and minimum loan against property amount I can get from IDBI Bank?

The maximum amount of IDBI Bank LAP loan is INR 10 crores. There is no minimum limit.

What are the KYC documents I will have to submit to apply for a loan against property from IDBI Bank?

Address proof, residence proof, photographs, and income source documents are a few KYC documents that you will have to submit to apply for IDBI Bank loan against property. Read the ‘Documents Required’ section to know more.

What is the processing fee on an IDBI Bank loan against property?

The processing fee charged to meet IDBI Bank Loan Against Property requirements is 0.50%-1.00% of the loan amount subject to a minimum of INR 10,000. For more information, follow the ‘Fees and Charges’ section of the blog.

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