Property Loan Rates & Fees: Know Before You Borrow

Opting for a Loan Against Property can be a smart move to make the most of your assets, especially if you need a large amount for business growth, higher education, or medical needs, or for any other emergency funds . That said, before you agree to the loan, it’s important to look closely at the interest rates and additional charges involved.

In India, these costs can make a big difference to how much you end up repaying — so having complete clarity about all of it, upfront is absolutely essential.

Key Takeaways

• Interest rates vary based on lender, borrower profile, and loan tenure.
• Fees & charges include processing fees, legal charges, foreclosure penalties, and more.
• Transparency is key — compare lenders and read the fine print to avoid hidden charges.

What are the typical interest rates on loans against property in India?

Interest rates for property loans in India typically range from 8.50% to 11.50% per annum, depending on several factors such as:

• Loan-to-Value Ratio (LTV): A higher LTV may attract a higher rate.
• Credit Score: Better scores (750+) often get lower rates.
• Type of Property: Residential or commercial; owned or rented.
• Borrower Profile: Salaried or self-employed individuals may face different interest brackets.

What fees and hidden charges should I expect?

Besides the headline interest rate, lenders typically impose a host of fees, such as:

• Processing Fee: 0.5% to 2% of the loan amount, often non-refundable.
• Legal & Valuation Charges: Covers property verification and valuation reports.
• Administrative Fees: For paperwork and backend processes.
• Prepayment & Foreclosure Charges: Can range from 2% to 5% (especially for NBFCs).
• Late Payment Penalties: Typically 2% per month on overdue EMIs.

Tip: Some lenders waive off processing or legal charges as a promotional offer — always check.

How do I compare property loan offers effectively?

To make an informed decision, consider the total cost of borrowing, not just the interest rate. Here’s a checklist:

1. Use an EMI calculator – Quicklend has a free one to estimate repayments.
2. Ask for an amortization schedule – Understand how your EMI breaks down over the loan tenure.
3. Read the terms on foreclosure, top-ups, and partial payments.

Can I negotiate on rates and fees?

Yes, and you absolutely should. Most lenders are open to negotiation, especially if:

• You have a strong credit score and repayment history.
• You’re taking a high-value loan (₹50 lakh and above).
• You have a stable source of income or a long-standing banking relationship.

Final Thoughts

Taking a Loan Against Property can be a great way to get access to a big amount of money when you need it. But here’s the catch — it only really works in your favor if you know the full picture. It’s not just about the interest rate; there can be extra fees and hidden charges that add up. So, before you say yes, take a little time to compare lenders and carefully read the terms. 

This is general guidance. For personalized loan advice, contact our team at Quicklend.