Government Policies and Regulations for Loan Against Property

Good day, everyone! Thinking of taking a Loan Against Property (LAP)? Let’s go over the government policies and regulations surrounding LAP in this video to help you make an informed choice.

First, we’ll discuss how the Reserve Bank of India (RBI) plays a central role in setting guidelines for LAP. The RBI regulates benchmark rates, like the repo rate, which lenders use to determine their own interest rates.

Next, you'll understand the Loan-to-Value (LTV) ratio set by the RBI. These dictate the maximum loan you can get based on your property’s value. Currently, LTV caps are set at 90% for loans up to ₹30 Lakhs, 80% for ₹30-75 Lakhs, and 75% for loans above ₹75 Lakhs.

Then, the video explores RBI-defined eligibility criteria like minimum income, a good credit score, and property type, ensuring only qualified applicants receive LAPs. Additionally, your repayment tenure must not exceed the property’s remaining lease, supporting responsible borrowing.

Lastly, we’ll go over some government initiatives like RERA and the Insolvency and Bankruptcy Code (IBC). These bring more transparency to real estate and help manage non-performing assets, thus indirectly impacting your loan.

Remember, knowing these regulations and comparing lenders carefully could empower you to choose a suitable Loan Against Property.