LIC Loan Against Property

LIC offers loan against property to people who require funds to meet their business as well as personal needs against the mortgage of their existing property. Taking a loan from LIC has the following benefits:

• Attractive interest rates
• Long tenure with low EMIs
• Loan for both residential and commercial properties

LIC charges various fees and charges when a borrower takes a loan against property:-

• Processing Fee on LIC LAP Loan is 0.75%. This fee is charged by LIC to maintain the applicant’s loan account and to process the loan application.
• Advocate's fee for property search and title investigation report.
• Valuer's fee for valuation report.
• Stamp duty payable for Loan agreement and mortgage.
• Property insurance premium.
• CERSAI Registration Fee of ₹ 50 + GST up to ₹ 5 Lakh limit and ₹ 100 + GST for limits above ₹ 5 Lakh.

The mortgage loan interest rates in LIC Housing Finance for salaried employee is listed in the table:-

The interest rate for mortgage loans for Self-employed people is listed in the table:

Loan against property in LIC can be availed through two ways online as well as offline. To apply online perform the following steps:-

• Visit the official website of LIC Housing Finance
• Go to products
• Select Loan Against Property
• Check eligibility and interest rates and fees
• Click on Apply Now
• Fill the application form
• Upload the required documents
• Bank will do the verification
• In 10-15 days loan amount will be sanctioned in your bank account

You can also apply offline, through the following steps:-

• Visit the nearest LIC branch
• Fill the loan against property form
• Submit the required documents
• Banks will do the verification and inform you if loan is approved or not
• Once loan is approved you will receive the amount in your bank account

As on 13 Jun, 2021, LIC offers the lowest rate starting at 8.50%. LIC Loan against property rates have been dropped by 1%, from the earlier rate of 9.50% with effect from 07 Jun, 2021.

LIC Housing Finance Mortgage Loan	Interest Rates
Griha Vikas	8.50%
LAP - Commercial	9.50%

Griha Vikas
Loan Amount	Current LAP Rates
Upto ₹ 50 Lakh	8.50%
₹ 50 Lakh - ₹ 1 Cr	8.50%
₹ 1 Cr - ₹ 3 Cr	8.50%
Above ₹ 3 Cr	8.50%

Last Updated Date	Interest Rates
07 Jun, 2021	8.50%
08 Apr, 2021	11.80%
01 Apr, 2021	11.30%
31 Mar, 2021	11.30%

Some of the factors that impact LIC Loan Against Property rates are listed as follows:

• Loan amount: Property loan rates in LIC depend upon the loan amount you apply for. You can get a minimum loan of ₹ 20 Lakh from LIC.
• Your Net Monthly Income: Income helps you in identifying your rate of interest. Higher the income, higher will be your repayment capacity which will increase your eligibility for higher loan amount.
• Type of loan opted for: LIC offers differential rates for different profiles of customers and also fixed and floating rate schemes. Loan against property interest rates may be higher or lower for special loan products.
• Type of property: Typically, loans against prime residential properties are easier to get and can be availed at the lowest rates compared to loans against commercial and industry properties.
• Your profession: LIC may charge a higher interest rate on a mortgage loan by a salaried person as compared to a self-employed professional or a businessman. A self employed professional or businessman is expected to deploy loan proceeds for productive purposes in his occupation or business compared to salaried people who who will most likely take a mortgage loan for his personal purposes.

LIC has detailed criteria to determine a potential borrower’s eligibility for mortgage loans. Some of the key criteria are:

Eligibility Criteria	Details
Age	21 to 60 years
Minimum Income	₹ 25,000
Loan Amount	₹ 20 Lakh to ₹ 5 Cr
Minimum years of business existence	2 years
Minimum work experience	3 years
Minimum Credit Score	650 and above
Loan to Value Ratio	Upto 50%
FOIR (Fixed Obligations to Income Ratio)	0.65

• Age: Age is one of the important factors to examine your eligibility. LIC Housing Finance offers loans to salaried and self employed from the age of 21 years. Any person taking a loan at the age of 21, can get a loan of up to 15 years, thus reducing the burden on existing income and hence, improving loan amount eligibility.
• Income: Property loan is mostly taken by self employed individuals primarily to meet their business requirements. However, in order to increase the loan amount you may club the income of family members like your spouse, parents, children and siblings.
• Business Stability: Self employed person should be in business for a minimum of 3 years during which the business should be profitable.LIC Housing Finance will ask for ITRs of 2 years to consider you as eligible for LAP.
• CIBIL Score: Past CIBIL history and repayment record of existing loans and credit cards has adverse impact on your loan eligibility. If you have a poor repayment record, then you may find it difficult to get a loan. A regular repayment record not only improves your chances of getting a loan, but also increases your loan eligibility. LIC Housing Finance grants loans to borrowers with a CIBIL score of 650 and above.
• Loan Amount: LIC Housing Finance gives you an amount ranging from ₹ 20 Lakh to ₹ 5 Cr. To improve chances of approval, apply for a loan amount that you can comfortably service.
• Property Value: The value of the property to be mortgaged is used to calculate maximum loan eligibility based on the maximum permissible LTV ratio which can range upto 50% depending on the type of property. LIC Housing Finance will conduct a detailed property assessment to establish that all legal titles are in place, assess the market value of the property, and its sale ability. LTV is calculated based on the estimated fair market value or registered value, whichever is lower.
• Fixed Obligations to Income Ratio (FOIR): The bank will also calculate the proportion of your fixed obligations to your income to calculate the Fixed Obligations to Income Ratio, known as FOIR. Fixed obligations include estimated average monthly expenses and EMIs you are paying on other existing loans. Minimum FOIR to be eligible for a LIC Housing Finance mortgage loan is 0.65.

LIC Housing Finance Property Loan Eligibility is the amount of loan you can avail based on an assessment of your repayment capacity as well as the value of property. You can use LIC Housing Finance LAP eligibility calculator to get a fairly accurate estimate of your potential eligibility subject to the information provided by you.

You can also use online LIC Housing Finance Loan against property EMI Calculator to calculate loan EMIs. EMI is a fixed amount that you are required to pay each month towards the repayment of your loan till the end of tenure

• EMI calculator of LIC Housing Finance helps you to calculate your monthly EMI at different rates of interest and also check and compare lowest EMI per lakh on LAP.
• Higher the loan amount, higher the EMI. You can compare the estimated EMI with your monthly repayment capacity to decide on a level of EMI you can comfortably service without creating financial burden.
• Loan tenure matters equally as higher loan tenure reduces your EMI.
• Another factor which affects your EMI is the interest rate on the loan. Higher the interest rate, higher will be the EMI. However, your cumulative interest outgo will be significantly high in a longer tenure loan compared to a short tenure loan. Loan against property interest rate comparison of different banks will allow you to choose the cheapest loan and hence, improve your eligibility.

• EMI calculator helps you to calculate your monthly EMI at different rate of interest
• LIC Housing Finance Mortgage loan EMI calculator helps you to know your capacity to repay the loan after maintaining your standard of living
• Getting an EMI estimate will help you ascertain the monthly EMI you can comfortably service, thus allowing you to choose the right combination of loan amount and loan tenure.

LIC Housing Finance offers mortgage loan balance transfer from another bank. This is subject to your meeting other eligibility criteria of LIC Housing Finance.You can avail additional top-up loan against property from LIC Housing Finance, subject to your eligibility.With LIC Housing Finance Top up LAP loan, you can continue with your existing LAP loan at affordable interest rate, higher loan amount and convenient loan tenure.

LIC Housing Finance offers customized products for specific customer segments designed to meet their loan requirements. Some of the popular products with their basic features are as follows:

Description:

• You can avail a loan against your residential property for a minimum loan amount of Rs 2 Lakhs.

• Loan against Residential Mortgage can be availed for personal needs such as Children´s Education / Marriage, purchasing property etc.

• Indian residents working as salaried individuals or self-employed professionals can avail loan against the residential mortgage.

Description:

• Loans for professionals for commercial use is available for a tenure up to 10 years.

• Property mortgage loan for business expansion is available for professionals for purchase/modification/extension/renovation on commercial property.

Who is Eligible?

• Indian residents working in partnership firms or companies are eligible for property mortgage loans.

• The property mortgage loan is available to professionals working in a reputed public sector/private sector company.

For Self-Employed

• Filled up loan application form
• 2 Passport Size Photo
• ITR of last 2 years
• Identity Proof - Passport/ Driving License/ Voter ID/ PAN
• Residential Address Proof - Leave and License/ Registered Rent Agreement/ Utility Bill (up to 3 months old), Passport
• Business proof such as VAT/ service tax registration, incorporation details in case of companies, business address proof, profit and loss account and balance sheets certified by CA, copy of partnership deed and proof of business existence and business profile

• Filled up loan application form
• 2 Passport Size Photo
• ITR of last 2 years
• Identity Proof - Passport/ Driving License/ Voter ID/ PAN
• Residential Address Proof - Leave and License/ Registered Rent Agreement/ Utility Bill (up to 3 months old), Passport
• Income Documents – 6 months payslip, 2 years Form 16, 6 months bank statement showing salary credit and any EMI debit

• Registered Sale Deed/ Conveyance/ Lease Deed
• Past Sale Deeds Chain (each transaction in respect of this property since first allotment
• Latest House Tax Return/ Receipt
• Approved Building Plan from Municipal Corporation

✅What is LIC Housing Finances loan against property interest rate?

LIC Housing Finance offers loan against property at a rate of 8.50% with the lowest EMI of ₹ 985. If you are currently paying a higher interest rate than LIC Housing Finance rate, you can opt for balance transfer of loan to LIC Housing Finance.

✅Did LIC Housing Finance Loan against property rates drop?

Yes, LIC Housing Finance loan against property rates has been decreased by 1% from the previous rate of 9.50% to 8.50%. The lowest mortgage rates of LIC Housing Finance is effective from 07 Jun, 2021.

✅How to increase my eligibility on LIC Housing Finance Mortgage loan?

If your spouse or family member is earning well, you can make your spouse or family member the co-applicant for your loan. The combination of both of your income will help you in increasing your eligibility to get a loan.

✅Do I get tax benefit on Loan against property from LIC Housing Finance?

There are no tax benefits available for loan against property.

• Floating interest rate on LIC Housing Finance property loan is linked to its PLR, which is currently 14.70%. So, when LIC Housing Finance offers a loan against property at 8.50%, it applies a -6.2% premium to its PLR to arrive at this rate.
• When RBI increases rates, the bank may increase its MCLR rate and the applicable interest rate for all existing and new loan against property would increase. When RBI cuts interest rates and the bank reduces the MCLR rate, the benefit of lower rates will have to be passed to both old borrowers and new loan account customers.

✅Can I foreclose my Mortgage loan? What are the charges applicable?

Yes, you can foreclose your loan anytime you want with Nil foreclosure charges.

✅What is the maximum loan tenure I can opt under LIC Housing Finance Property loan?

LIC Housing Finance offers a maximum tenure of 15 years to repay your loan.You can choose the tenure for your LAP loan as per your convenience and repayment ability.

✅What is the benchmark rate applicable for Mortgage loan?

The benchmark rate applicable for property loans in LIC Housing Finance is PLR

✅Can I transfer my LAP from another bank to LIC Housing Finance?

Yes, Bank gives you the facility to transfer your existing loan with a hassle free process. Loan balance transfer to LIC Housing Finance offers you to pay lower EMIs and save money.

✅Can I club the income of my spouse with mine and apply for joint Property loan?

Yes, you can club the income of your spouse to increase your loan eligibility.You can bring in your spouse as a co-owner of the property or guarantor of the loan.

✅What is LIC Housing Finance mortgage loan processing fees?

The loan processing fee charged is 1.00% of the total loan amount.

✅What is LIC Housing Finance property loan procedure?

You can apply for a LIC Housing Finance property loan by contacting the bank directly or by approaching them through online marketplaces like MyLoanCare. Approaching the bank through an online marketplace improves the chances of getting best loan rates, low processing fees and special offers in the form of cash backs. Once you approach the bank, they will collect your documents and initiate the loan process which includes checking your CIBIL score, property valuation, technical and legal checks on property, eligibility calculation. The bank will give a decision on your loan based on the evaluation results.

✅What security do I need to provide for LIC Housing Finance Mortgage Loan?

LIC Housing Finance requires a registered mortgage of the property against which the bank will provide you a loan.

• Property on which you intend to take loan is not vacant land, has an approved map plan and is in a municipal area. You must attach the entire chain of title documents of the property and its approved building plan with the loan application.
• Your total EMIs on all loans and credit cards (from LIC Housing Finance and other banks) are no more than 60 - 70% of your net monthly income.
• You have not defaulted on loans or credit card dues to LIC Housing Finance and other banks and all EMI's have been paid. Note that LIC Housing Finance can see the record or status of your EMI defaults to all banks and NBFC’s in India and not just to LIC Housing Finance in your CIBIL report. Estimate your CIBIL score for free for free by using CIBIL score estimate calculator
• If you are salaried, ensure that you attach your recent salary slips, bank statements and last 3 years' Form 16 with the loan application
• If you are self employed, your business must have been in existence for at least three years and last three income tax returns with audited financial must be available

✅Are prepayment or foreclosure charges applicable on LIC Housing Finance loan against property?

You can prepay loan against property (LAP) without any penalty or charges in case:

• Your loan is at a floating rate of interest and not at a fixed rate. Almost all loans against property are at floating rates and it is unlikely that yours is at a fixed rate of interest
• The loan is in the name of one or more individual borrowers and none of the applicants and co-applicants is a business entity like a company or a firm or partnership or AOP