LIC Loan Against Property: Interest Rates, EMIs, and Eligibility Criteria

Looking to unlock the value of your property for financial growth? LIC‘s Loan Against Property offers competitive interest rates starting at 9.25% p.a. and flexible tenures up to 15 years, empowering you to achieve your personal and business aspirations.

LIC Loan Against Property – All Details

Feature	Details
Loan Amount	Minimum: ₹2 lakhs Maximum: ₹15 crores (based on eligibility and property value)
Repayment Tenure	5 to 15 years
Interest Rate	Starts from 9.25% to 11.55% per annum (varies based on loan amount and borrower profile)
Eligible Properties	Residential, commercial, or industrial properties with clear titles
Eligibility	Salaried and self-employed individuals
Processing Fee	Around 1% of the loan amount + applicable taxes
Prepayment Charges	– Floating Rate: No prepayment penalty – Fixed Rate: Nominal fee after six months
Insurance Coverage	Optional insurance coverage may be included
Application Process	– Online application – Document submission – Property valuation – Approval & disbursement
Purpose of Loan	Personal or business financial needs

Also Check: LIC Housing Finance EMI Calculator

Types of LIC Loan Against Property

LIC recognizes that leveraging your property can unlock significant financial potential, enabling you to achieve both personal aspirations and business expansion.

LIC Loan Against Property for Individuals – Griha Vikas

• Designed to address both business and personal financial requirements.
• Secured against a residential house or flat.
• The property should not be older than 35 years.

Suggested Read: Loan Against Property Tax Benefits

LIC Loan Against Property for Listed/ Unlisted Companies

• Tailored to meet the financial needs of businesses.
• Provides financial assistance against the security of commercial property (office premises), either already owned or acquired using the loan.
• The loan amount may be utilized for repaying existing loans (including takeovers) or for the purchase of fixed assets.
• Applicable only for properties that are fully completed.

LIC Loan Against Rental Securitization (Lease Rental Discounting)

• Enables property owners to unlock the value of their rental income by using their leased property as collateral.
• Allows borrowers to maintain ownership and ongoing rental income from the property while benefiting from the loan.

Summary Table

Type of LIC Loan Against Property	Purpose	Security/Collateral	Key Eligibility Conditions
For Individuals – Griha Vikas	Meets both personal and business financial needs	Residential house or flat	Property age not exceeding 35 years
For Listed/Unlisted Companies	Business financial requirements, including debt repayment or asset acquisition	Commercial property (office premises)	Property must be fully completed
Loan Against Rental Securitization (Lease Rental Discounting)	To leverage rental income without losing property ownership or income	Leased property with ongoing rental income	Property should have an active lease generating rental income

Suggested Read: What is Lease Rental Discounting?

LIC Loan Against Property Interest Rates 2025

LIC offers loan against property at interest rates starting from 10.85% p.a. These rates vary based on factors such as CIBIL score, loan amount, occupation profile, and the specific home loan scheme you choose.

LIC Loan Against Property for Individuals – Griha Vikas

CIBIL Score	Interest Rates
750 > CIBIL >= 700	₹10 Lakh – ₹5 Crore: 10.85% p.a. onwards ₹5 Core – ₹15 Crore: 11.10% p.a. onwards

LIC Loan Against Property for Companies/ Loan Against Rental Securitization

CIBIL Score	Interest Rates (Up to ₹5 Crore)	Interest Rates ( ₹5 Crore – ₹20 Crore)
800+	11.35% p.a. onwards	11.85% p.a. onwards
700+	11.85% p.a. onwards	12.35% p.a. onwards
600+	12.35% p.a. onwards	12.85% p.a. onwards

Suggested Read: Personal Loan vs. Loan Against Property

LIC Loan Against Property: Eligibility Criteria

To be eligible for a LIC Loan Against Property, applicants must meet several criteria. Here are the key eligibility requirements:

Eligibility Criteria	Details
Age	Applicants must be between 25 and 75 years at the time of application.
Citizenship	Must be an Indian citizen and resident of India.
Occupation	Eligible applicants include salaried employees, self-employed professionals, and businesspersons.
Income Stability	A stable income that is sufficient to repay the loan is required.
Property Location	The property offered as collateral must be located in a city where LIC Housing Finance has a branch.
CIBIL Score	A good credit score (typically 700 or higher) is preferred for better loan terms.
Business Experience (for self-employed)	Self-employed individuals should have a business that has been operational for a minimum of 3 years and demonstrate profitability.

Suggested Read: Loan Against Property without Income Proof

LIC Loan Against Property: Security Requirements

Borrower Type	Security Requirements
For Individuals	Age of the property: Less than 35 years Demand Promissory Note
For Companies/ LRD	Applicable only to fully-completed properties. Loan proceeds can be used for repaying existing loans (including takeovers) or purchasing fixed assets.

Suggested Read: LIC Housing Finance LAP Customer Care

Compare Top Banks Loan Against Property Interest Rates

Comparing loan against property interest rates from leading banks helps you identify affordable financing options. Get a clearer view of each lender’s terms and choose the best home loan that matches your budget and financial goals.

Banks/ NBFCs	Rate of Interest	Maximum Loan Amount
SBI	10.60% p.a. – 11.30% p.a.	Rs. 7.5 Crore
HDFC	9.50% p.a. – 11.00% p.a.	65% of the market value of the property
IDFC	9.25% p.a. onwards	50% – 70% of the market value of the property
Tata Capital	14.25% p.a. onwards	Depending on the market value of the property
Axis Bank	10.50% p.a. – 10.90% p.a.	Rs. 5 Crore
Kotak Mahindra Bank	9.50% p.a. onwards	Rs. 5 Crore
Bank of India	10.10% p.a. Per lakh	Rs. 5 Crore
LIC Housing Finance	9.70% p.a. – 11.55% p.a.	Rs. 2 lakhs onwards
PNB Housing Finance	9.24% p.a. – 12.75% p.a.	70% of the market value of the property
ICICI Bank	10.85% p.a. – 12.50% p.a.	75% of the market value of the property

How does the loan-to-value ratio work for LIC loans against property?

The Loan-to-Value (LTV) ratio is a critical metric used by lenders, including LIC, to determine the maximum loan amount that can be sanctioned against a property. Here’s how it works specifically for LIC loans against property:

Understanding Loan-to-Value Ratio

• Definition: The LTV ratio measures the proportion of the loan amount to the appraised value of the property being mortgaged. It is expressed as a percentage.
• Calculation Formula:
  
  LTV = {Loan Amount}/{Market Value of Property}*100

LTV Ratio Ranges for LIC Loans

• For LIC loans against property, the LTV ratio typically ranges from 40% to 75% of the property’s market value. This means if your property is valued at ₹1 crore, you could potentially borrow between ₹40 lakhs and ₹75 lakhs depending on various factors.
• Some lenders may offer higher LTV ratios, up to 85%, but this can vary based on the lender’s policies and the type of property.

Importance of LTV Ratio

• Risk Assessment: A lower LTV indicates less risk for the lender, as there is more equity in the property compared to the loan amount. This can lead to better interest rates and terms for borrowers.
• Eligibility Determination: The LTV ratio is a key factor in assessing a borrower’s eligibility for a loan. A high LTV may suggest higher risk, potentially leading to higher interest rates or denial of the loan.
• Regulatory Guidelines: The Reserve Bank of India has set guidelines for maximum LTV ratios based on the loan amount:
• Loans up to ₹30 lakhs: Maximum LTV of 90%
• Loans between ₹30 lakhs and ₹75 lakhs: Maximum LTV of 80%
• Loans above ₹75 lakhs: Maximum LTV of 75%.

Can I use the loan for business purposes?

Yes, you can use a LIC Loan Against Property for business purposes. This type of loan is designed to provide financial support for various needs, including business expenses. Here are some key points regarding the use of the loan for business:

• Flexibility in Use: The funds from a loan against property can be utilized for a wide range of business-related expenses, such as purchasing equipment, expanding operations, managing cash flow, or covering startup costs.
• Loan Terms: When applying for the loan, you may need to specify the intended use of the funds. Transparency is important, as lenders may have specific guidelines regarding how the loan should be used.
• Eligibility Criteria: To qualify for a loan against property, you typically need to meet certain eligibility criteria, including having a clear title to the property being mortgaged and demonstrating your ability to repay the loan.
• Documentation: You may be required to provide documentation that outlines your business plan and financial projections to assure the lender of your repayment capability.

Using a loan against property for business purposes can be a strategic way to leverage your assets while obtaining necessary funding. However, it’s essential to ensure that the loan terms align with your business goals and financial situation.

How do interest rates compare between different types of business loans?

Interest rates for business loans vary significantly based on several factors, including the type of loan, collateral, and the borrower’s financial profile. Here’s a comparison of interest rates between different types of business loans:

Type of Loan	Interest Rate Range	Key Characteristics
Secured Business Loans	7% – 13%	Lower interest rates due to collateral (e.g., real estate, equipment) reducing lender risk.
Unsecured Business Loans	13% – 25%	Higher interest rates as no collateral is required, increasing lender risk.
Term Loans	8% – 20%	Fixed or variable rates; terms can range from short to long, affecting overall cost.
Business Line of Credit	10% – 20%	Typically variable rates; flexible borrowing against a credit limit for operational needs.
Microloans	8% – 18%	Smaller amounts for startups or small businesses; often have higher rates due to risk.
Equipment Financing	7% – 15%	Secured by the equipment being purchased; generally lower rates compared to unsecured loans.

Key Factors Influencing Interest Rates:

• Credit Score: Higher scores usually lead to lower rates as they indicate lower risk to lenders.
• Loan Amount and Duration: Larger and longer-term loans may have lower rates due to fixed costs being spread over a larger principal.
• Collateral: Secured loans typically offer lower interest rates compared to unsecured loans due to reduced risk for lenders.
• Business Age and Financial History: Established businesses with stable financial histories may qualify for better rates than newer or less stable businesses.

Understanding these differences can help borrowers choose the right type of loan that aligns with their business needs and financial situation.

What documents are required for the application process of LIC Loan Against Property?

To apply for a LIC Loan Against Property, you will need to submit a variety of documents that verify your identity, financial status, and the property being mortgaged.

Here’s a comprehensive list of the typical documents required for the application process:

Document Type	Details
Application Form	Completed application form specific to LIC Housing Finance.
Identity Proof	PAN Card, Aadhaar Card, or any government-issued ID.
Address Proof	Utility bills, bank statements, or rental agreements in the applicant’s name.
Property Documents	Title deed, property tax receipts, and encumbrance certificate to prove ownership and clear title.
Income Proof	Salary slips for salaried individuals or income tax returns for self-employed individuals (last 2-3 years).
Bank Statements	Recent bank statements (usually last 6 months) to demonstrate financial stability.
Property Valuation Report	A report from a certified valuer assessing the market value of the property being mortgaged.
Business Profile (if applicable)	For self-employed applicants, a brief profile of the business along with audited financial statements for the last 2-3 years.
Partnership Deed/Company Registration	If applicable, provide partnership deed or company incorporation certificate.
Proof of Existing Loans (if any)	Details of any existing loans or liabilities that may affect repayment capacity.

Additional Notes:

• Ensure that all documents are self-attested where required.
• It may be beneficial to have additional documentation ready for specific cases, such as a business plan if applying as a business entity.
• The exact requirements may vary slightly based on individual circumstances and the specific policies of LIC Housing Finance.

This documentation helps LIC assess your eligibility and the risk associated with lending against your property.

Conclusion

Taking a loan against property is a big step. Putting your property as collateral can be hard, but we make it easy. Choosing Credit Dharma for your home loan simplifies this process. We offer expert advice and personalized assistance to make everything hassle-free. You’ll receive timely updates on your loan application and disbursement progress.

From the initial application to the final disbursement, we provide comprehensive support. Enjoy clear and honest communication at every stage, with no hidden surprises.

Frequently Asked Questions