1,30,000 people visited this section in last 30 daysApply Online

Get Cashback of Upto ₹ 1,000* on Property Loan Apply Online

MyLoanCare Customer Ratings - 4.5/5.0 Apply Online

Foreclosure Charges on Loan Against Property

Prepayment of Loan Against Property

Last Updated 20th Jan 2022

You can now prepay loan against property (LAP) without any penalty or charges in case your loan meets the following conditions:

  • Your loan has been sanctioned at a floating rate of interest and not a fixed rate. Almost all loans against property are on floating rates and it is highly unlikely that yours is at a fixed rate
  • The loan is sanctioned in the name of one or more individual borrowers and not corporate entities
  • Neither the borrower nor the co-borrower is a corporate entity (ltd. or pvt. ltd. company) or a firm (partnership or AOP)
Apply for Loan Against Property @ 6.90%* Get upto ₹ 1,000* Cashback

RBI Circular on Prepayment Charges

NHB Circular on Foreclosure Charges

For loans from Housing Finance Companies, refer to NHB circulars NHB(ND)-DRS-Policy-Circular-63-14-15 dated Aug 14, 2014 and NHB-ND-DRS-Policy-Circular-No-66-2014-15 dated Sep 03, 2014 for more details.

The National Housing Bank (NHB) has clarified that its circular dated August 2014 regarding withdrawal of prepayment charges (on both part prepayment and full foreclosure) is applicable only on floating rate loans sanctioned to individuals.

Loans where a company or a form is an applicant or a co-applicant are outside the purview of the said circular.

The NHB Circular of 14th August had extended RBI's ban on prepayment charges applicable on floating rate loans to loans granted by housing finance companies (HFC's) governed by the NHB. RBI had already banned penalty on partial or full prepayment of all floating rate loans to individuals sanctioned by banks and NBFC's. NHB's move is essentially aimed at aligning the regulations for all classes of lenders to one common basis.

In it's circular dated 3rd September, 2014, NHB has clarified that the August 14, 2014 circular is applicable to all floating rate loans sanctioned before or after 14th August but being repaid on or after the said date. Thus, the circular would override the contracted terms in the sanction letter and loan agreement executed before 14th August 2014 also.

Further, NHB has clarified that ban on prepayment charges would not be applicable for loans with companies or non individual as either primary borrower or co-borrower. In practice, very large volume and value of loan against property (LAP) are sanctioned with individuals as applicants and their business entities (pvt. ltd. companies and partnerships or firms) as co-borrowers. The NHB clarification means that such loans will continue to attract prepayment charges as contracted between the borrower and lender.

For more details and case specific guidance, contact MyLoanCare at 8448389600 or care@myloancare.in.


Which Bank is best for Loan against property?

A number of leading banks and NBFCs offer loans against property in India. Currently, Citibank offers the most affordable Loan against property at an interest rate of 6.90.

How much Loan can I get against my property?

Loan against property can be borrowed for loan amounts up to ₹ 15 Cr. Currently, South Indian Bank offers the highest loan amount on Loan against property.

What are the prepayment charges on Loan against property?

As per the current RBI regulations, Individuals can foreclose and prepay their Loan against property without paying any foreclosure and prepayment charge. This, however, is applicable when the Loan is borrowed at a floating rate of interest by individuals and not by company or entities. In case of a fixed rate of interest, the prepayment charge on Loan against property may vary across all lenders.

Notification ×
  • Home Loan

    Home Loan at all-time low rates starting at 6.50%. Cashback of up to ₹ 1,000

    Apply Now
  • Personal Loan

    Instant Personal Loan starting at 10.25% with Cashback of up to ₹ 1,000.

    Check Offers
  • Gold Loan

    Instant Gold Loan starting at 9.00% with Cashback of up to ₹ 500

    Apply Now
  • Loan Against Property

    Best Loan Against Property Offers starting @ 6.90%. Cashback of up to ₹ 1,000*.

    Apply Now
  • Business Loan

    Collateral Free Business Loan Rates starting at 14.00% with Overdraft facility.

    Apply Now
  • Fixed Deposit

    AAA rated FDs with returns as high as 7.05%.

    Invest Now
Loan Against Property News - Jan 2022
  • 2022-01-19 : Bajaj Finance Q3 Net up 84% on Income Growth.
    Bajaj Finance Ltd (BFL) has reported an 84 per cent year-on-year (YoY) jump in third-quarter standalone net profit. The growth has been seen on the back of healthy growth in net interest income, fees and commission income and other operating income.
  • 2022-01-14 : Equitas Small Finance Bank Profit Grows by 13% in Gross Loan Portfolio
    Equitas Small Finance Bank has seen a 13 per cent year-on-year rise in gross loan portfolio to Rs 19,642 crore. The growth is in line with the recovery in economic activities in the informal sector.
  • 2022-01-07 : Tata Capital Launches Flexi Plus Loans for Different Categories
    Tata Capital has launched Flexi Plus loans across different products including, personal, business, loan Against Property, two-Wheeler and home Loans. The loan comes with longer tenure, overdraft facility and a step-up plan.
  • 2022-01-06 : Canara Bank Q3 Net Profit Rises by 139.5%
    Canara Bank has reported a net profit of 139.5% to register a year-on-year profit of Rs. 1,667.3 cr in Q3.
  • 2022-01-05 : HDFC Bank Reports Growth by 16.4%
    The private lender HDFC Bank reported that its advances growth rose by more than 16.4% in the December quarter. As a result, the advances reached Rs 12.6 lakh crore compared to Rs 10.8 lakh crore in the same period last year.
*Terms and conditions apply. Credit at sole discretion of lender, which is subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and collected from public sources. Read More
Please wait while your information is being processed...