Mortgage Loans

A mortgage loan, also known as a loan against property (LAP), is a secured loan where you pledge your existing residential or commercial property as collateral to borrow funds. Unlike a home loan, which is specifically for purchasing a new property, a mortgage loan can be used for various financial needs, such as business expansion, education expenses, medical emergencies, debt consolidation, or even home renovations.

Here's a breakdown of mortgage loans relevant to individuals and businesses in Nellore, Andhra Pradesh:

Key Features of Mortgage Loans:

• Collateral: The primary requirement is the ownership of a clear and marketable residential or commercial property. Agricultural land is usually not accepted.
• Loan Amount: Lenders typically offer 40-70% of the property's market value as the loan amount. This depends on the lender's policies, the property's condition, age, and marketability, as well as the borrower's repayment capacity. Some banks may offer up to ₹5 crore or even ₹10 crore.
• Tenure: Repayment periods for mortgage loans generally range from 10 to 15 years, but some lenders might offer tenures up to 20 years. Overdraft facilities against property might have shorter tenures.
• Interest Rates: Interest rates for mortgage loans are typically lower than unsecured loans like personal loans because the loan is secured by an asset, reducing the lender's risk. As of May 15, 2025, interest rates can range from around 9% to 20% per annum, depending on the lender, the borrower's credit profile, and the type of property. You can choose between fixed and floating interest rates.
• End-Use Flexibility: Unlike home loans, there are usually no restrictions on how you use the funds from a mortgage loan.
• Repayment Options: The most common repayment method is through Equated Monthly Installments (EMIs). Other options might be available depending on the lender.
• Processing Fees and Other Charges: These include application fees, processing fees (usually a percentage of the loan amount), documentation charges, property valuation fees, and potential charges for prepayment or late payments.