Are you facing a financial crunch in your business or personal life? Do you own a property that can be leveraged? Then a loan against property can help with immediate funds while retaining ownership.

Whether you’re trying to expand a business, fund education, or consolidate debt, it’s important to choose the best bank for loan against property. You need to look for competitive interest rates, flexible repayment, and minimal processing delays.

To that end, this blog analyzes the best banks for loan against property based on a range of factors. So you can get the best LAP when you need it the most.

Best Banks for Loans Against Property

Unlike personal loans, LAP offers lower interest rates since your property secures the loan. However, choosing the right bank is crucial for favorable terms, quick disbursal, and hassle-free repayment.

So let’s look at the top options.

SBI

SBI, India’s largest public sector bank, offers competitive interest rates on loans against property, starting as low as 10.90% p.a. With high loan-to-value (LTV) ratios—up to 70% of the property’s market value—SBI ensures quick processing and flexible repayment tenures up to 15 years.

  • Interest Rate: 10.90% p.a. onwards
  • Max Loan Amount: Up to ₹15 crore
  • LTV Ratio: Up to 70%
  • Processing Fee: 0.35% of loan amount + GST

ICICI Bank

ICICI Bank provides loans against property with interest rates from 10.85% p.a., catering to salaried and self-employed borrowers. With loan amounts up to ₹10 crore and tenures extending to 20 years, ICICI ensures swift approvals through digital processes.

Its balance transfer facility and doorstep service make it a preferred choice for hassle-free funding.

  • Interest Rate: 10.85% p.a. onwards
  • Max Loan Amount: Up to ₹10 crore
  • LTV Ratio: Up to 70%
  • Processing Fee: Up to 2% of loan amount + GST

HDFC Bank

HDFC Bank’s loan against property offers attractive rates (starting at 9.35% p.a.), with loan amounts up to ₹15 crore and flexible repayment options. This bank is known for quick disbursal (72 hours post approval). It provides customized solutions for business needs, education, or weddings, backed by seamless online tracking.

  • Interest Rate: 9.35% p.a. onwards
  • Max Loan Amount: Up to ₹15 crore
  • LTV Ratio: Up to 70%
  • Processing Fee: Up to 1.5% of loan amount + GST

Axis Bank

Axis Bank’s LAP comes with interest rates from 9.90% p.a., offering loans up to ₹5 crore with tenures up to 20 years. Features like part-prepayment without penalties, minimal documentation, and doorstep assistance make it a strong contender for entrepreneurs and professionals seeking liquidity against property.

  • Interest Rate: 9.90% p.a. onwards
  • Max Loan Amount: Up to ₹5 crore
  • LTV Ratio: Up to 70%
  • Processing Fee: 1% of loan amount + GST

Kotak Mahindra Bank

Kotak Mahindra Bank’s loan against property starts at 9.15% p.a., with funding up to ₹5 crore and tenures up to 15 years. Its instant in-principle approval, flexible repayment plans, and dedicated relationship managers cater to both salaried and self-employed individuals efficiently.

  • Interest Rate: 9.15% p.a. onwards
  • Max Loan Amount: Up to ₹5 crore
  • LTV Ratio: Up to 65%
  • Processing Fee: Up to 2.5% of loan amount + GST

Bank of Baroda

Bank of Baroda offers LAP at competitive rates (from 9.70% p.a.), with loans up to ₹10 crore and tenures up to 15 years. Bob’s low processing fees, transparent policies, and quick sanctioning make it a reliable choice for property-backed financing.

  • Interest Rate: 9.70% p.a. onwards
  • Max Loan Amount: Up to ₹10 crore
  • LTV Ratio: Up to 70%
  • Processing Fee: 0.5% of loan amount + GST

IDFC First Bank

IDFC First Bank provides loans against property starting at 9.25% p.a., with high LTV (up to 70%) and tenures up to 20 years. Its digital application process, doorstep service, and flexible EMI options make it ideal for urgent funding needs.

  • Interest Rate: 9.25% p.a. onwards
  • Max Loan Amount: Up to ₹10 crore
  • LTV Ratio: Up to 70%
  • Processing Fee: Up to 1.5% of loan amount + GST

Union Bank of India

Union Bank’s LAP comes with interest rates from 10.20% p.a., offering loans up to ₹7.5 crore with minimal paperwork. With long tenures (up to 15 years) and government-backed reliability, it’s a solid option for low-cost secured loans.

  • Interest Rate: 10.20% p.a. onwards
  • Max Loan Amount: Up to ₹7.5 crore
  • LTV Ratio: Up to 70%
  • Processing Fee: 0.50% of loan amount + GST

Punjab National Bank

PNB offers loans against property at rates from 10.15% p.a., with loan amounts up to ₹10 crore and tenures up to 15 years. Its low processing charges and quick disbursal benefit small business owners and professionals.

  • Interest Rate: 10.15% p.a. onwards
  • Max Loan Amount: Up to ₹10 crore
  • LTV Ratio: Up to 70%
  • Processing Fee: 0.35% of loan amount + GST

Central Bank of India

Central Bank of India’s LAP starts at 9.50% p.a., with loans up to ₹5 crore and flexible repayment options. Known for easy eligibility norms, it’s a preferred choice for borrowers seeking affordable property-backed loans.

  • Interest Rate: 9.50% p.a. onwards
  • Max Loan Amount: Up to ₹5 crore
  • LTV Ratio: Up to 65%
  • Processing Fee: 0.50% of loan amount + GST

Federal Bank

Federal Bank’s loan against property offers rates from 12.35% p.a., with high LTV (up to 60%) and quick processing. Its customized solutions for NRIs and resident Indians make it a versatile option for diverse funding needs.

  • Interest Rate: 12.35% p.a. onwards
  • Max Loan Amount: Up to ₹10 crore
  • LTV Ratio: Up to 60%
  • Processing Fee: Up to 1% of loan amount + GST

Tata Capital Housing Finance

Tata Capital provides LAP at competitive rates (from 9.00% p.a.), with loans up to ₹5 crore and tenures up to 20 years. Its tailored solutions for self-employed individuals and fast approvals enhance borrower convenience.

  • Interest Rate: 9.00% p.a. onwards
  • Max Loan Amount: Up to ₹5 crore
  • LTV Ratio: Up to 70%
  • Processing Fee: Up to 2% of loan amount + GST

LIC Housing Finance

LIC Housing Finance offers loans against property starting at 9.25% p.a., with loan amounts up to ₹10 crore and tenures up to 15 years. Backed by LIC’s credibility, it ensures transparent terms and steady customer support.

  • Interest Rate: 9.25% p.a. onwards
  • Max Loan Amount: Up to ₹10 crore
  • LTV Ratio: Up to 70%
  • Processing Fee: Up to 1.5% of loan amount + GST

Godrej Housing Finance

Godrej Housing Finance’s LAP comes with rates from 9.75% p.a., offering loans up to ₹5 crore with quick disbursal. Its flexible repayment plans and customer-centric approach make it ideal for property owners seeking liquidity.

  • Interest Rate: 9.75% p.a. onwards
  • Max Loan Amount: Up to ₹5 crore
  • LTV Ratio: Up to 65%
  • Processing Fee: Up to 2% of loan amount + GST

L&T Finance

L&T Finance provides loans against property at rates from 9.50% p.a., with high LTV (up to 65%) and tenures up to 15 years. Its hassle-free documentation and fast processing cater to urgent financial requirements.

  • Interest Rate: 9.50% p.a. onwards
  • Max Loan Amount: Up to ₹5 crore
  • LTV Ratio: Up to 65%
  • Processing Fee: Up to 2% of loan amount + GST

Each of these banks and NBFCs has distinct advantages—whether it’s lower interest rates, faster processing, or higher loan amounts. Select the right one as per your requirements and repayment capacity. To that end, a great option for you is Nihal Fintech’s loan against property solutions.

What to Consider When Applying for Loan Against Property?

In a Loan Against Property, your residential or commercial property acts as collateral against a secured loan. While it offers lower interest rates than personal loans, choosing the right lender and terms is crucial. Here are the key factors to consider.

Interest Rates & Type

Compare fixed vs. floating rates—fixed offers stability, while floating may decrease over time. Banks like SBI (9.15%) and PNB (9.25%) offer the lowest rates. Always check if the rate is repo-linked or MCLR-based for transparency.

Loan-to-Value (LTV) Ratio

LTV determines how much you can borrow against your property’s value. Higher LTV (up to 70% at HDFC, ICICI) means more funds, but may come with stricter terms. Lower LTV (60-65%) often has better rates.

Loan Tenure & EMI Affordability

Longer tenures (up to 20 years at ICICI, HDFC) reduce EMI burden but increase interest costs. Use an EMI calculator to balance affordability with total repayment—shorter tenures save on interest.

Processing Fees & Hidden Charges

Processing fees range from 0.35% (SBI) to 2.5% (Kotak) + GST. Watch for legal, valuation, and prepayment charges. Some banks (e.g., BoB, PNB) have minimal fees, reducing upfront costs.

Prepayment & Foreclosure Terms

Check for prepayment penalties—some banks (e.g., Axis) allow partial prepayment without fees, while others charge 2-5%. Floating-rate loans often permit free foreclosure after 1 year.

Disbursal Time & Customer Service

Faster disbursal (72 hours at HDFC, 5-7 days at PSU banks) is crucial for urgent needs. Private banks score higher on digital tracking & support, while PSUs offer reliability but slower processes.

Try to prioritize lowest total cost (interest + fees) over just low EMIs. Try to negotiate terms with the bank or NBFC based on credit profile and property value.

FAQs on Banks for Loans Against Property

What is a Loan Against Property (LAP)?

A secured loan where you pledge your residential or commercial property to avail funds. The loan amount depends on the property’s market value, with interest rates lower than personal loans.

Are there prepayment penalties on LAP?

Most banks allow free foreclosure after 1 year for floating-rate loans. Fixed-rate loans may attract 2-5% prepayment charges—check terms before signing.

What documents are required for a LAP?

Basic KYC, property papers (title deed, NOC), income proof (ITR, salary slips), and bank statements. Self-employed applicants may need business financials.

Can I get a LAP if my property is jointly owned?

Yes, but all owners must be co-applicants. Some banks may require additional documentation for joint properties.

Is LAP better than a personal loan?

Yes, if you need higher amounts (₹10L+) and lower rates (9-12% vs. 10-24% for personal loans). However, LAP requires collateral, while personal loans are unsecured.

Can I use LAP funds for any purpose?

Yes—common uses include business expansion, medical emergencies, education, or debt consolidation. Some banks may ask for end-use declarations.

Let’s Conclude

A Loan Against Property can be a smart way to unlock funds when you need liquidity without selling your asset. Whether you prioritize low interest rates, quick disbursal, or flexible repayment, the right lender depends on your financial needs and property value.

Before applying, compare interest rates, processing fees, LTV ratios, and foreclosure terms. Even small differences can significantly impact your total repayment. Also, assess your EMI affordability to avoid financial strain.

Ultimately, the best bank or NBFC for your LAP is one that balances cost, convenience, and reliability. For the best terms of financing, check out Nihal Fintech’s financing services and reach out to our experts today!