If you want to take a loan in lieu of property, then adopt this method:

The loan in exchange for a property is called a loan in lieu of property. It is also called hostage loan. The mortgage property remains with the bank or the non-banking financial company (NBFC) until the loan is repaid. If you too are planning to take such a loan in lieu of your property in 2025, then some steps have been given here to get the best interest rate and early approval.

What is loan on property?

Debt on property is a safe loan in which you mortgage your residential, commercial or industrial property near a bank or non-banking financial company (NBFC). You can take this loan business for expansion, higher education, medical treatment or various other requirements. The loan amount you get is mainly based on the market value of your property and your repayment capacity. This is a flexible way to get a large amount without selling your property. Depending on the credit profile of the applicant, the loan amount can be up to 85% of the market price of the property.

Eligibility criteria for loan on property

To apply for a loan on the property, you have to meet the required eligibility criteria. Eligibility criteria vary for each bank. Some general eligibility criteria required to apply for a loan on the property are given below. This information is taken from Paisabazaar.com.

Criteria and details:

• Residential status: Resident Indian or NRI
• Minimum age limit: 18 years
• Maximum age limit: 70 years
• Type of employment: salaried, non-prone, professional, non-professional
• Minimum Wage: ₹ 12,000 per month
• Pure annual income: ₹ 1.5 lakh per year
• Work Experience: At least 1 year in the current organization
• Debt-to-price ratio: up to 85% of property value
• Credit Score: 700 and above
• Property Type: Residential, Commercial, Industrial

Try to maintain a strong credit score of 750 or more to get the best loan on the property deal. Pay your existing debt before applying, as it increases eligibility criteria. Always compare different banks and offers of NBFC to get the lowest interest rate. Also, keep your property documents updated and controversial-free, and consider a short-term loan to reduce the total interest rate.