5 Banks Offering High Loan Amounts Against Property in India

Your property can serve a purpose beyond being a home, office or commercial space. If you own an eligible property, you can use it as collateral to raise funds through a Loan Against Property (LAP).

A Loan Against Property is a secured borrowing facility where the property is mortgaged to the lender. The funds may be used for various permitted requirements, including business expansion, working capital, education, medical expenses and other financial needs, depending on the lender and loan terms.

One of the most important questions for a borrower is how much loan can be raised against a property. The answer depends on several factors. Banks generally consider the property's value, location and type, the applicable loan-to-value ratio, income, existing liabilities, credit history and repayment capacity before deciding the final loan amount.

While the amount sanctioned differs from one applicant to another, some banks offer relatively high loan limits. Here are five banks to consider when comparing Loan Against Property options in India.

1. Federal Bank

Federal Bank offers Loan Against Property with a loan amount of up to ₹20 crore, subject to applicable terms and conditions. Its Property Power facility can be availed against eligible residential premises, plots of land and commercial properties. Borrowers can choose between a Term Loan and an Overdraft facility, depending on their requirements and eligibility.

The facility comes with a maximum repayment tenure of up to 15 years. This combination of a high loan limit and multiple facility options can be relevant for borrowers with substantial funding requirements.

Learn more at: https://www.federal.bank.in/loan-against-property

2. State Bank of India

State Bank of India (SBI) offers an Asset Backed Loan for eligible business units, self-employed and professional individuals, and other qualifying borrowers.

Under this facility, the published loan amount starts above ₹5 crore and goes up to ₹20 crore. SBI also states that a loan amount of up to ₹50 crore may be permitted on a case-to-case basis. The facility is available for business purposes such as working capital, capacity expansion and modernisation, subject to the applicable conditions.

Since SBI has multiple property-backed lending products, borrowers should check the specific scheme to understand the applicable loan amount, margin and eligibility requirements.

3. HDFC Bank

HDFC Bank provides Loan Against Property against residential and commercial properties. Its current LAP information allows loan calculations up to ₹10 crore, with a repayment tenure of up to 15 years.

For eligible MSMEs, HDFC Bank also offers an Overdraft Against Property of up to ₹10 crore against residential, commercial or industrial property. Under this structure, the borrower can use funds from the approved credit limit as required, with interest charged on the amount utilised.

For business owners, the difference between a standard LAP and an overdraft facility can be important when deciding which borrowing structure suits their cash-flow requirements.

4. Axis Bank

Axis Bank offers Loan Against Property starting from ₹5 lakh and going up to ₹5 crore. The facility is available against eligible residential and commercial properties.

The bank also provides an Overdraft Facility Against Property with a maximum limit of ₹5 crore. The actual amount available to a borrower depends on factors such as property value, eligibility and the applicable product terms.

Therefore, a borrower should not assume that the maximum advertised amount will automatically be sanctioned. The lender's assessment of the property and the applicant's repayment capacity plays an important role.

5. Kotak Mahindra Bank

Kotak Mahindra Bank offers Loan Against Property for both personal and business requirements. Its published LAP information states a loan range of ₹10 lakh to ₹5 crore.

The facility can be availed against eligible commercial, residential or industrial property. Kotak Mahindra Bank also provides the facility in different structures, including EMI-based loans and an overdraft facility.

The final loan amount is determined based on the applicant's eligibility, property value and other applicable lending conditions.

Is a Higher Loan Limit Always Better?

Not necessarily. A higher maximum loan amount can be useful when you have a large funding requirement, but the loan should still fit your repayment capacity. Borrowers should look beyond the maximum limit and compare factors such as interest rate, LTV, processing fee, tenure, prepayment or foreclosure conditions, eligible property types and repayment structure.

The type of facility can also make a difference. A Term Loan may suit a one-time funding requirement, while an Overdraft can be useful for borrowers who need access to funds periodically.

Since the property is provided as security, borrowers should also consider the consequences of non-payment. Failure to meet the repayment obligations can result in enforcement against the mortgaged property as per the loan agreement and applicable law.

Final Thoughts

The maximum Loan Against Property amount varies across banks and products. Among the lenders covered here, Federal Bank offers a loan amount of up to ₹20 crore, while SBI's Asset Backed Loan also provides financing of up to ₹20 crore, with higher amounts potentially available on a case-to-case basis. HDFC Bank's LAP and property-backed overdraft facilities go up to ₹10 crore, while Axis Bank and Kotak Mahindra Bank publish maximum amounts of ₹5 crore for their relevant facilities.

However, the highest published limit should not be the only consideration. The amount you can actually borrow depends on your property, financial profile, eligibility and the lender's assessment.

Before applying, compare the complete loan terms and select a borrowing amount that meets your requirement while remaining manageable within your repayment capacity.