A Loan Against Property can be an ideal funding solution for funding urgent business or housing expenses. A Loan Against Property is a secured mortgage loan that lets you mortgage your property and seek a loan of Rs.5 Crore* or higher, based on your eligibility and requirements.
The prime benefit of a Loan Against Property is that it comes with end-use flexibility. Therefore, the funds availed of through a Loan Against Property can be used for housing-related expenses such as home renovation or remodeling, or business-related expenses. You can also use the funds to consolidate your debts.
Another factor to consider is the tax benefits of a Loan Against Property. A Loan Against Property allows you at least two claims under the Income Tax Act, 1961.
| Tax Provision | Income Tax Implication on a Loan Against Property |
|---|---|
| Tax Exemptions Under 24(B) | Applicable for salaried borrowers who have used the Loan Against Property funds to buy a new residential property. The tax deductions are valid on the interest component of the repayment amount, up to Rs.2 Lakh. |
| Tax Exemptions Under 37(1) | Applicable for borrowers who have used the Loan Against Property sanction to meet business expenses. One may claim rebates on the interest component of the loan, the processing fees, and the documentation fees as business expenses while filing the claim. |
*Terms and conditions apply
Frequently Ask Questions
A Loan Against property is one of the most preferred funding solution to meet big-ticket expenses. There are several tax benefits that you can enjoy by availing of Loan Against Property. Tax exemptions under section 24(B) and 37(1) can be availed of. However, tax benefits are not applicable if Loan Against Property is used for personal purposes.
A Loan Against Property allows you to enjoy several tax benefits. Tax benefits for Loan Against Property are applicable under section 24(B) and 37(1). However, borrowers cannot seek tax benefits under section 80C.
A Home Loan and a Loan Against Property both are high ticket funding options. It is not possible to convert a Loan Against Property into a Home Loan. Both the loan types are different in nature and the conditions under which they are availed of.
The interest rate on a Loan Against Property starts from 9.75%* p.a. for self-employed applicants. The interest rates are determined by several factors including property’s value and CIBIL score. The tenor and your desired loan amount also decide the interest rate.
Disclaimer:
The information remains subject to change depending on the laws and government guidelines, applicable at the time being. However, Bajaj Housing Finance Limited (‘BHFL’) is under no obligation to update or keep the information current. Users are advised to seek independent legal and professional advice before acting on the basis of the information contained in the Website. Placing reliance on the aforementioned information shall always be the sole responsibility and decision of the User and the User shall assume the entire risk of any use made of this information.
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