A loan against property or mortgage loan considers your asset (real estate) and allows you to raise funding accordingly.
However, the borrower may have to incur additional costs apart from paying the principal and interest rate in full at the time of repayment. These additional costs usually make up for the services provided by your lender, deviation from the loan’s contract, penalties, or agreement fees.
Want to know how much would your final payment be?
Check out Kotak Mahindra bank’s loan against property EMI Calculator.
Kotak Mahindra bank practices the utmost transparency regarding the financial intricacies of our customers’ interests.
On this page, we list down the non-refundable LAP charges.
|FEES AND CHARGES - Loan Against Property|
|Stage||Fee/Charge Description||Payable at||Amount in Rs.|
|Pre-disbursement||Processing fee (PF)||Sanction||1% plus GST and Statutory dues. (Non refundable)|
|Documentation Charges||Application||INR 10000 plus GST and Statutory dues|
|Post-disbursement||Copy of Any Documents|
|Interest Certificate/ Statement of Account/ Amortisation Schedule||Event||Accessed via self service mode on Mobile Banking/Net Banking/Whatsapp Banking: Free
Physical/Soft copy request through Customer Service/Branch: Rs. 250 (plus taxes and any other applicable statutory dues)
|Charges for copy of any documents (Duplicate NOC, No dues, Copy of property documents, etc.)||Event||Rs. 500 (plus taxes and any other applicable statutory dues)|
|Any Other documents /letter (e.g. Subsidy Confirmation Letter, Credit Opinion Letter, Interest paid confirmation letter, etc.)||Event||Rs. 500 (plus taxes and any other applicable statutory dues)|
|Change in Repayment mode|
|Repayment mode/ Account swap charges||Repayment mode change||Rs. 500 (plus taxes and any other applicable statutory dues)|
|Switch Fee||On conversion||Switch to lower floating rate(with/without change in Benchmark): 0.5% of the principal outstanding and undisbursed amount(if any) at the time of conversion with a cap of Rs. 10,000 (plus taxes and any other applicable statutory dues)|
(For floating rate loans)
|Prepayment/Foreclosure||NIL for Term Loans given to Individual Borrowers for non-business end use.
For Micro & Small Enterprises (MSE):
MSE certified borrowers if loan is foreclosed from own source of fund: NIL
MSE certified borrowers loan closed from borrowed funds: 3% (plus taxes and any other applicable statutory dues) of the prepayment/foreclosure amount
Others (Individual borrowers for business end use and Non-individual borrowers) :
• No prepayment / foreclosure is allowed until a Lock-in Period of 6 months after EMI Commencement
• Post lock– in period, part prepayment of minimum Rs. 25,000 and maximum of up to 25% of outstanding loan amount can be made without any prepayment charges every 6 months
• The minimum period between any two prepayment shall be at least 6 months
• For any Part Prepayment in excess of 25% of outstanding loan amount: 3% (plus taxes and any other applicable statutory dues) of the excess prepayment amount
• For Full Prepayment any time after the Lock-in-Period: 3% (plus taxes and any other applicable statutory dues) of the Foreclosure Loan amount plus amounts prepaid during the last 12 months
|Instrument (Cheque/ECS/Mandate) dishonour charges||Instrument dishonour||Rs. 500 (plus taxes and any other applicable statutory dues)|
|Substitute Interest (Penal Interest)||Late payment||2% per month (plus taxes and any other applicable statutory dues) on unpaid EMI amount for delayed period|
|Collection charges (In case of default)||Late payment||30% (plus taxes and any other applicable statutory dues) of cheque/instrument dishonour charges plus penal interest
E.g. EMI amount due for 30 days (a month) - Rs. 1,00,000
Penal interest (I) - Rs. 2000
Instrument dishonour charge (II) - Rs. 500
Total (I)+(II) - Rs. 2500
Collection charge excluding taxes - Rs. 750 (30% of Rs. 2500)
|Legal charges||Event||As Incidental/ At Actuals|
|Levy of penal interest for non-compliance of sanction terms including but not restricted to increase in credit risk like non-submission of title documents, non-commencement of construction as per undertaking, adverse repayment behaviour, other breach of agreement terms||Event||2% incremental pricing over and above existing spread (plus taxes and any other applicable statutory dues)|
|Loan cancellation: Charges applicable in the event of customer opting to cancel the loan post disbursement without encashing the Disbursement Cheque.
(If encashed the same shall be treated as preclosure/foreclosure)
|Event||0.10% of Loan Amount or Rs. 25,000 whichever is higher (plus taxes and any other applicable statutory dues)
This will be over and above PF payable.
|Charges specific to OD (Overdraft) facility|
|Post-disbursement||Annual Renewal Charges||Renewal||0.25% (plus taxes and any other applicable statutory dues) of the OD limit (dropped limit after reduction of annual drop) shall be collected on the due date of renewal.
Not Applicable for Smart Home Loan OD product.
|Non-utilization Charges||Event||0.25% of the non-utilized OD limit or Rs. 1250 whichever is higher (plus taxes and any other applicable statutory dues).
Quarterly minimum OD Limit utilization threshold: 50%
E.g. OD Limit : Rs. 50,00,000
OD threshold for Utilization (50% of OD Limit) : Rs. 25,00,000
OD Limit Utilized : Rs. 10,00,000
Differential : Rs. 15,00,000
Charges : Rs. 3750 (0.25% of Rs. 15,00,000)
|Overline rate/Penal interest in case of overline accounts||Overwithdrawal||3% (plus taxes and any other applicable statutory dues) per month over and above normal OD rate.
This would be charged on the amount over the above OD limit.
|Stamp Duty on Loan Agreement, Overdraft Agreement, Guarantor Agreement, Registration Charges etc. varies from State to State. Stamping/Notarisation of RBI and other Affidavits as applicable.|
|Charges for other Services would be specified as applicable when the Customer applies for those services and the same shall be payable by the borrower alone e.g. Revalidation of Sanction, Change in Property, Reschedulement of Loan, Change in EMI Date, Solvency Charges etc.|
|Taxes/ other statutory levies may be charged to the Borrower if applicable as per Government/ RBI directives.|
Click here to refer to the General Schedule of Features and Charges (GSFC) for your loan against property (revised w.e.f. Nov 22, 2022).
As you can tell, the loan against property interest rate isn’t the only cost you have to pay while taking a LAP. Many lenders would lure in borrowers with quick disbursement promises or low-interest rates. However, they later charge them heavily with other costs, or worse, they refuse to cooperate. Consequently, you would not be able to do much else but play by their rules, given your real estate would now be in their seize.
It is, thus, a better idea to choose a lender who offers standard rates of interest but is transparent and reputed for proper borrower handling. Kotak Mahindra Bank is a reputed name in the banking and lending sector with thousands of happy customers in our lending books. We aspire to help you find your financial and business goals using our LAP, which comes at nominal and transparent fees.
We recommend our customers to not base their decision solely on the LAP interest rates. Secured loans have a lower interest rate. And since you have raised collateral, you would be getting a much lower interest on the loan than unsecured loans.
Please read the other applicable LAP charges. Given that you will pledge your hard-earned property’s documents in the mortgage loan, and your investment is in tow, you must read all the clauses and papers carefully.
To view the usual documents required for loan against property.
Various factors determine the principal and interest of a loan against property. The age and nature of your property, your income status and source, your age, and the amount you are seeking are some of the critical factors.
For more certainty, you can use the loan against property eligibility calculator here.
As you will have a pre-payment fee in most cases, borrowers often see pre-payment unfavorably.
Though a borrower may have the finances to retire the loan entirely, they would continue to pay interest on it simply to avoid the additional pre-payment charges. However, retiring your debts is always a smart financial move.
Therefore, Kotak Mahindra Bank offers an overdraft (OD) facility to those who would like to get free of all debt and pay off their liability early.
OD on loan allows you to withdraw or deposit as and when you want. It is ideal for those who have variable incomes and want to utilize their periodic surplus to pay off the loan. The best part is you can always withdraw your surplus whenever you need it. But, having paid it up in advance would not attract pre-payment fees if you have an OD facility from your lender.
However, please note that loans with OD facilities do not qualify for an income tax rebate under Section 80C of the Income Tax Act, 1961. Moreover, they would also have a higher interest rate than loans without overdrafts or term loans.
For a loan against property, Kotak Mahindra bank gives its customers an option to choose the OD facility.
Would you like to check your loan against property eligibilty?
The processing fee is a one-time non-refundable fee charged for the services provided to process the loan. It is payable at the time of application, and most banks in India charge 1-2% of the total loan amount as processing fees.
A loan applicant has to pay the documentation charges while submitting his paperwork for the loan application. At Kotak Mahindra Bank, we charge INR 10,000/- + GST + Statutory dues in documentation charges. The interest rate can be another decisive factor while choosing the right LAP loan.
The 2014 RBI Circular mandates that no foreclosure charges will be levied on individual borrowers seeking floating loan interest rates. However, for individual borrowers who have loans at fixed interest rates or joint borrowers with floating rates, there will be foreclosure charges applicable if the loan is retired before its schedule.
There are two types of loans against property available with Kotak Mahindra Bank: Overdraft and Term loan.