Loan against property, also known as LAP is a multi-purpose loan which helps an individual raise funds in the form of a bank loan keeping his or her property assets as collateral. Assets like property are purchased by an individual in order to secure his/her money through investment. However, there are times when despite having physical property, an individual faces cash crunch and looks for funds to weather such tough times. It is in times like these that Dhanlaxmi Bank’s LAP comes handy. LAP provides a loan against one’s property. It is the perfect way to unlock the value of one’s property and realise one’s dreams. This loan can be availed for business as well as personal needs. It can be used for various purposes such as expansion of one’s business, vacation, funding of children’s education and other important expenditure. Loan against property can be applied for by both salaried as well as self-employed individuals.
- It is a multi-purpose loan taken for business as well as personal requirements.
- It can be taken for personal needs such as wedding, home renovation, vacation or funding of certain educational courses.
- These loans can also be availed to meet business expenses such as funding needs, commercial activity, trade, and other bona fide requirements. In short, these loans are issued for expenses which are unavoidable and need to be made on an urgent basis.
- This loan provides a platform to generate extra income from an idle property.
- Simple Documentation: LAP being a secured loan, is issued easily with uncomplicated documentation. This saves the applicant from the unnecessary burden of arranging for papers.
- Fast Approval: The bank follows the practice of fast approval of a loan against property.
- The quantum of loan to be sanctioned varies depending on the applicant’s income, nature of business and other related factors.
- Loan can be availed against commercial, residential or industrial property.
- Loan Tenure: Loan against property in Dhanlaxmi Bank is issued for a period of 3 to 15 years.
- Lower EMIs: Owing to lower rate of interest, the EMI on property loan is comparatively lower than the EMI for a personal loan.
- The bank also provides the facility of step up and step down EMIs.
- The bank also provides door step services to its customers if required.
- The bank offers special loan against property scheme to self employed people as a surrogate income program
- Mortgage Reducing Term Assurance (MRTA): MRTA protects the applicant’s family from paying off the applicant’s debt in case of the sudden demise of the applicant.
- The bank also provides balance transfer options, which allows the customer to transfer his existing home loans in other banks to Dhanlaxmi Bank at comparatively lower interest rates.
- It also gives customers an option of applying for top up loans along with the balance transfer option for personal and business use.
- The bank charges only a one time processing fee at the time of disbursement of the loan. This ensures no other charges are included in the form of hidden cost, thereby, saving the applicant from post loan hassles.
The eligibility of the applicant/borrower for availing a loan depends upon his/her repayment capacity along with other relevant factors such as income, age, qualifications, number of dependents, spouse’s income, assets, liabilities, savings history and stability, value of the property in question and the steadiness of the applicant’s job or business.
The bank levies certain fees and charges on all its loans that are issued. Given below is a detailed list of the charges:
Processing Fees: The bank charges a processing fee towards loan against property of 1.50% of the loan amount sanctioned, subject to a minimum of Rs. 10,000. However, these charges are exclusive of service taxes. Service tax, as applicable, is levied over and above the mentioned charges.
The bank also charges a non-refundable processing fee of Rs. 3,500 + service tax for loan amounts up to Rs. 20 lakh and a processing fee of Rs. 5,000 + service tax in case of loans amounting to more than Rs. 20 lakh. These non-refundable charges are included in the processing fee and levied at the time of application.
Foreclosure Charges: Foreclosure charges are levied by the lender, Dhanlaxmi Bank in this case, to recover the remainder of the loan from a borrower who has stopped making payments by forcing the sale of the asset used as collateral for the loan - property in this case. The rate of interest charged for foreclosure of a loan depends on the period of loan within which the loan is being foreclosed. For loans pre-closed within 12 months of the first loan instalment disbursement, the bank levies a charge of 5% + service tax on the principal outstanding amount i.e. the outstanding amount at the time of closure.
For loans pre-closed between 12-24 months from the first loan instalment disbursement, the bank levies a charge of 3% + service tax on the principal outstanding amount.
For loans pre-closed post 24 months, a charge of 2% + service tax is levied on the principal outstanding amount.
- Part Pre-payment Charges: Part prepayment charges is 2% of the amount partly paid.
- Foreclosure Statement Charges: The bank issues a foreclosure statement by charging Rs. 200 + service tax from the applicant.
- Cheque Bounce Charges: The bank levies a penalty of Rs. 500 + service tax per instance of cheque dishonour.
- Late Payment Charge: This charges stands at 3% per month.
- Cheque Swap Charges: The bank charges Rs. 500 + service tax for every instance of cheque swapping.
- Facility Statement Charges: The bank does not levy any kind of charge towards issuance of the first statement. However, it levies a statement charge Rs. 500 + service tax for subsequent statements.
- Document Retrieval Charges: The bank charges Rs. 500 + service tax for retrieval of property documents.
- NOC Issuance Charges: The bank issues a No Objection Certificate (NOC) on the customer’s request. However, it has to be kept in mind that this facility is free only for the first NOC issued. Post that, a charge of Rs. 500 + service tax is levied for every NOC that the bank issues.
- EMI Cycle Change: The applicant can opt for a change in his or her existing EMI cycle to a suitable date by bearing a minimal charge of Rs. 500 + service tax.
- Switch Charges: The applicant can also opt to switch from a floating rate of interest type loan to a fixed interest type of loan and vice-versa by paying a charge of 3% + service tax on the outstanding loan amount.
- Escrow Account Charges: The bank levies a charge of Rs. 10,000 + service tax per annum wherever applicable. The first year charges have to be borne by the applicant at the time of disbursement of the loan. Post that, the amount towards this charge is debited from the applicant’s account at the beginning of each financial year.
- Facility Cancellation Charges: The applicant can also opt to cancel his or her loan with the bank before the disbursement of the entire loan amount is completed. However, the charge for this facility stands at Rs. 2,000 + service tax + interest charges, as applicable from the date of first loan disbursement till the cancellation request date.
- Stamp Duty (Facility Documentation & Property) + Registration: These charges are levied on actual basis.
- Legal, Repossession and Incidental Charges: These charges are levied on actual basis.
- Insurance Premium: These charges are levied on actual basis.
- Creation of Charge with ROC: These charges are levied on actual basis.
- Customer Credit Information Report (Credit Bureau): The bank issues a CIBIL report at the rate of Rs. 200 per report for individual customers and charges Rs. 750 per report from non-individual customers.
- Any Other Charge: The bank may levy other charges as applicable, binding by the loan agreement and the sanction letter.
- Signed Application Form with Self-attested Photograph: This is mandatorily required for all applicants whether salaried, self-employed (non-salaried), sole proprietorship, private limited company or a partnership firm.
- Identity Proof accepted by Dhanalakshmi Bank.
- Bank acceptable Address Proof
- Last 6 month’s bank statement or latest Income Tax Return (ITR) or Form 16. These documents help verify the applicant’s income status prior to making an application for Dhanlaxmi Bank property loan. They also demonstrate an individual’s credit worthiness and financial status. In case of salaried applicants, last 6 month’s bank statement where the salary is credited is also required.
- Latest salary slip/salary certificate with most recent Form 16 is required to. This is a requirement in case of salaried applicants only.
- Repayment Track Record (if any): The applicant has to submit a detailed payment record of his/her existing and/or past loans, if any, with the bank itself or with any other financial institution. This bolsters the applicant’s case in repayment of the loan and is required for all applicant types – salaried, self-employed (non-salaried), proprietorship firms, private limited companies and partnership firms.
- Copy of Property Papers: The applicant has to submit a copy of the legal documents pertaining to the property in question. This is a mandatory requirement for all types of applicants, whether salaried, self-employed (non-salaried), proprietorship firm, private limited company or a partnership firm.
- Photographs: Passport size photographs in case of both salaried and non-salaried applicants.
- Processing Fee Cheque: The bank charges a minimum fee for processing the loan application. An applicant has to submit the same in the form of a cheque along with other documents at the time of application. This is required for all applicants, whether salaried, self-employed (non-salaried), proprietorship firm, private limited company or a partnership firm.
In addition to the above mentioned documents, self-employed professionals, sole proprietorship firms, private limited companies and partnership firms have to also submit the following documents:
- Income tax returns of the past 2 years of the directors and/or partners of the firm.
- Bank statement of last 12 months of the business’s main operating bank account.
- Audited financials such as the profit and loss account and balance sheet of the firm.
- Certified copies of Memorandum of Association (MOA)/ Articles of Association (AOA)/Partnership Deed (if applicable).
- Professional qualification certificate of the highest degree availed by the applicant (if applicable).
- The applicant has to submit a duly filled and signed loan application form along with all the required documents to the bank.
- The bank officials on receiving the documents undertake internal verification of the documents. This verification process is done to make sure that all the submitted documents are authentic and that the loan applicant is a genuine candidate.
- On being satisfied with the legitimacy of the documents and credit worthiness of the applicant, the bank then arranges for a personal interview with the applicant.
- The terms and conditions of the loan agreement including loan liability and interest rate are then decided between both the parties.
- The bank then issues a sanction letter. However, this sanction letter is issued only after the bank receives title clearance and correct value of the property.
- The process of title clearance, valuation and inspection is done by the bank’s empanelled advocate, valuer, and bank official respectively.
- Once the above mentioned processes are complete, the bank demands the submission of pre-disbursement letters.
- On having completed all the formalities, the bank disburses the loan to the applicant.
Desirous customers can take the help of the ‘EMI Calculator’ present on the bank’s website to get an idea about the value and frequency of the Equated Monthly Instalments (EMIs). One has to enter the desired loan amount, interest rate and loan tenure to find out the tentative EMI. These 3 fields can be tweaked to arrive at an EMI that is comfortable for the customer to repay.
You can apply for Dhanlaxmi Bank’s loan against property either by logging on to their website or by visiting a bank branch. You can also apply for this loan through Paisabazaar.com. Just log on to the website and navigate to the loan against property section. You will be asked to provide a few key details about yourself including age, occupation, etc. in order to unlock the best LAP offers available to you. From among the available offers, you can choose the offer provided from Dhanlaxmi Bank and submit your application electronically. After your application passes the first round of checks, a Dhanlakshmi Bank representative will get in touch with you for completion of other formalities.
Even after opting for a loan, it takes some time for the loan to be sanctioned and money to be credited in the customer’s account. The bank provides such a facility where if the customer wants to check the status of the loan application, he/she can do that. For checking the loan status, the applicant needs to visit the bank’s website and use the internet banking facility to check the status of the loan applied for.
The bank deals with customer loan related queries in a systematic way. Customers can call the bank on their helpline numbers. The customers can also use the bank’s website to connect with the bank online by filling an online form with their queries, requests or feedback. Lastly, the customers can also write to the bank at its registered office in Kerala.
Q. Who can avail a loan against property from Dhanalaxmi Bank?
A. Individuals as well as non-individual entities can avail a loan against property from Dhanlaxmi Bank. Individuals are divided into 3 categories – salaried people, professionals and self-employed people.
- Salaried Individuals including NRIs.
- Self employed Professionals – CA, Architects
- Non-Individual Entities: This category consists of proprietorship firms, partnership firms, private limited companies, public limited companies, and so forth.
Q. How much finance can one avail against the property value?
A. The bank allows one to borrow up to 65% of the market value of one’s property, provided one meets the required income eligibility criteria set by the bank.
Q. What happens if one does not have the required financial documents but has the capacity to repay the loan? Does such an applicant receive a loan?
A. The bank offers loan against property in a variety of cases, namely income based loans and surrogate income based loans. The bank has understanding of many types of businesses and determines the loan eligibility according to the nature of the applicant’s business.
Q. What is the min. and max. tenure of Dhanlaxmi Bank’s loan against property offering?
A. Dhanlaxmi Bank grants loans against properties from a period of minimum 3 years to maximum 15 years. The tenure for the loan is restricted to the retirement age or 60 years at loan maturity for salaried individuals and 65 years for self employed individuals.
Q. Does one require a co-applicant to avail loan against property?
A. Yes, all the co-owners of the property have to sign up as co-applicants. For single owner properties, 1 adult family member has to sign up as the co-applicant. In case of a partnership firm, the partners will be the co-applicants. While the promoter directors will be co-applicants in case of a company.
Q. What is the applicable rate of interest?
A. The rate of interest differs based on factors like the loan amount applied for, property type, income etc. The same is communicated to the applicant by the sales representatives of the bank.
Q. How does one repay the loan taken against property?
A. There are 2 ways to repay the loan taken against property. One can either pay by way of Electronic Clearing System (ECS) or by issuing post-dated cheques (PDCs).