HDFC Loan Against Property 
Eligibility Criteria

HDFC, India's premier home loan financing institution, offers non-housing loans to go along with its popular home loans. The non-housing loan products include the following:

• Commercial Property Loan: Loan for purchase of commercial property like industrial galas, shops, and so on.
• Loan Against Property: Personal Loan Against Property for meeting urgent business and individual requirements.
• Commercial Plot Loan: Loan to purchase a plot of non-residential land for constructing a factory, shop, and similar other activity.

Following are some attractive features and benefits of HDFC Loan Against Property:

• Loans available against entirely constructed and freehold, residential, and commercial properties.
• Loan Against Property is available for meeting business and personal requirements
• Business needs can be meeting working capital requirements, financing long-term business assets, or business expansion.
• Personal requirements can be anything from medical expenses, marriage, education, travel, and any other individual needs.
• Facility to transfer similar loans from other banks to HDFC to get the benefit of interest rates
• An extensive network of offices for availing and servicing the loan from anywhere in India
• Extended repayment tenures resulting in smaller EMIs
• Attractive and reasonable rates of interest
• Simplified eligibility norms
• Hassle-free documentation formalities
• Facility to check out the eligibility and apply for a Loan Against Property online
• A fixed-rate of interest and floating rates of interest options available
• Single and joint applications allowed
• Funding up to 60% of the property value for existing HDFC customers and up to 50% for new customers.

Note: The bank has launched the consent-based Video KYC facility for personal loan and saving accounts to verify the customer’s identity digitally.

The details of the loan are given below:

To apply for the loan, applicants must meet the eligibility criteria mentioned below:

HDFC Loan Against Property Documents Required

Following documents need to be submitted when applying for the loan:

Following factors determine the borrower's eligibility for HDFC Loan Against Property:

• The applicant's income is the prime requirement. The Loan Against Property is available only to those who have a regular source of income.
• The repayment capacity is another essential requirement for determining eligibility. The borrower should be in a position to repay the loan. HDFC considers all the repayments, including the proposed EMI for the Loan Against Property, to determine the EMI/NMI ratio. The actual loan amount depends on this calculation.
• The value of the property is a crucial aspect that determines loan eligibility. New customers have to provide a margin of 50% on the value of the property. Existing customers have an advantage, as HDFC finances up to 60% of the realisable value of the property.
• The credit rating of the borrower has an impact on the eligibility, as well. HDFC usually stipulates a minimum CIBIL score of 650 for considering the loan application. However, if your credit score is an excellent one, you get the benefit of a lower spread on the interest.

Applicants can improve their eligibility for the loan by following these tips:

• The best way to enhance your eligibility is to show a higher level of income. You can add other income if it is a regular one. Rental income is a steady income. Interest on deposits is also an acceptable source of income. If you receive any pension besides your salary, it is a source of regular income.
• You can bring in an eligible co-applicant having a regular income. Such a co-applicant can be your spouse, parents, children, and even siblings.
• Close your credit cards and other short-term loans so that you have higher disposable income on your hands for servicing the loan EMI.
• Improve your CIBIL score so that you end up with a lower spread on the interest rate

The rate of interest on individual loan plays a vital role in deciding the eligibility. It is because your EMI depends on the rate of interest. The following factors affect on your Loan Against Property Interest Rate:

• The nature of the property: Residential property has a lower rate when compared to a commercial property.
• The status of the property: Self-occupied residential property attracts a lower rate of interest when compared to non-self-occupied ones.
• The amount of the loan: Loans less than 50 lakhs have a better rate of interest when compared to the big-ticket investments.
• The type of interest: Loans with a floating rate of interest are cheaper when compared to the loans with the Fixed Rate of Interest.

Following are some key differences between HDFC Loan Against Property and HDFC Home Loan:

• When it comes to offering security for the loan, the Loan Against Property is similar to the home loan. Both these loans provide an equitable mortgage of the property as security.
• The significant difference between a home loan and a Loan Against Property is the asset creation aspect. You avail a home loan for purchasing or constructing your house. In the Loan Against Property, you avail a loan against the house.
• Therefore, the rate of interest on a home loan is comparatively less than the Loan Against Property.
• The home loan has an extended tenure for up to 30 years, whereas the Loan Against Property is for 15 years.
• The LTV ratio for a home loan is in the range of 75% to 90%, whereas it is 50% to 60% in the case of loans against property.