Loan on Property

Loan Against Property from NBFC: Benefits, Process, and Best Options

By Tata Capital
06 January 2026
10 mins read
2696

When trying to secure a loan against property, there are two main routes you can take: approaching a traditional bank or turning to a Non-Banking Financial Company (NBFC). While banks have been the traditional go-to for loans, NBFCs are a compelling alternative.

NBFCs are known for their quick, efficient, customer-centric services. Let’s explore why NBFCs can be a better choice for securing a loan against property.

What are NBFCs?

Non-Banking Financial Companies (NBFCs) are financial institutions that offer you various financial and banking services. However, unlike banks they do not accept your deposits or open accounts under your name.

NBFCs can provide a wide range of financial services including loans for homes, vehicles, businesses, investment solutions and wealth management services. NBFCs are fully regulated under the regulatory framework of the Reserve Bank of India. This framework ensures that they maintain transparency and reliability.

In many situations NBFCs are considered to be better than traditional public and private banks. This is because they offer flexible, efficient and tailored services. They usually have easier loan approvals, faster processes, and customisable terms for their services.

Loan Against Property by NBFCs: Definition and Key Features

An NBFC loan against property is a type of loan where you borrow money from a Non-Banking Financial Company by offering your property as collateral. This loan can be used for any personal or business need, like expanding your business, funding your child’s education, or covering medical expenses.

The amount you can borrow as loan against property depends on the property’s value. You can usually secure large amounts with this loan without having to sell your property. Some features of NBFC loan against property include:

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You can secure a significant amount of money, often up to 60-70% of the property’s current market value. This could be an amount ranging from Rs 5 lakhs to Rs 5 crore.

Interest rates are very competitive and start at 10.10%.

You get flexible repayment terms with a loan tenure ranging from 12 to 120 months.

You can use residential or commercial properties to secure a loan.

An NBFC loan against property is one of the most flexible loans you can avail as you can use it for any purpose.

Why Choose NBFCs for Loan Against Property?

When considering a loan against property, opting for a Non-Banking Financial Company (NBFC) can be a smart choice. This can offer you a range of benefits that can improve your overall financial well-being. The benefits of NBFC loan against property include:

High loan amounts

Firstly, NBFCs are known for offering higher loan amounts than traditional private banks. This means you can secure a large sum of money against your property. Whether you need funds for business expansion, education, medical emergencies, or any large-scale investment, NBFCs ensure you get the financial backing you require.

Simple and Fast Application Process

NBFCs specialise in making the loan process hassle-free and convenient. Unlike traditional banks, where the loan application process can be cumbersome and time-consuming, NBFCs streamline the process. You can initiate your loan application online, submit documents digitally, and even get pre-approved offers. This digital approach saves you time and reduces stress when applying for a loan.

Competitive Interest Rates & Flexible Repayment

While it’s a common misconception that loan against property NBFC interest rates are high, many offer competitive rates that are on par with or sometimes even better than those of banks. The interest rates are determined based on your loan amount, property value, and repayment capacity. For example, Tata Capital, the best NBFC for loan against property, offers the most competitive loan against property interest rates in the market.

Repayment flexibility

Flexibility in repayment is another compelling reason to go with an NBFC. You can choose a repayment plan that suits your financial situation. Options like flexible tenure, part-prepayment, and foreclosure without hefty charges allow you to manage your loan smartly.

Flexible Eligibility Criteria

NBFCs offer a more flexible set of eligibility criteria compared to traditional banks, which is beneficial for self-employed or individuals with fluctuating income. NBFCs consider criteria such as age, income, property value, and credit history, however, they do so with a broader acceptance rate. This makes loans from NBFCs more accessible.

Minimal Documentation Required

Private banks usually require submitting a hefty pile of documents for loan approval. NBFCs require minimal documentation to process your loan against property. Typically, documents required for NBFC LAP loans include identity proof, address proof, property papers, and proof of income.

Fast Approval & Disbursal

A notable feature of NBFC loans against property is the quick approval and disbursal process for loans against property. This efficiency is thanks to the fully digitalised application process as it streamlines all the steps from submission of the loan application form to approval. Fast approvals are especially beneficial when you need funds for emergencies.

Custom Loan Products

NBFCs offer a range of custom loan products tailored to meet specific needs. You can easily customise the tenure and loan amount you need based on your repayment capability and financial requirements. Whether you’re looking for a loan with a balloon payment option or a monthly payment plan, NBFCs can create customised solutions for you.

Personalised Service & Digital Support

Lastly, the personalised customer service offered by NBFCs makes the whole loan process less-daunting. With dedicated relationship managers and customer service teams, you receive individual attention and support throughout the loan process. This personalisation ensures a transparent process where all your queries are answered and issues are resolved.

Additionally, NBFC often provide specialised tools such as the loan against property emi calculator which help you understand the financial commitment of monthly repayments better. This helps you make informed decisions.

Also, read – Why NBFCs are the Best Choice for Loan Against Property?

Eligibility Criteria for NBFC Loan Against Property

Before applying, it is important to understand the eligibility norms that influence approval and loan value. A loan against property from NBFC offers greater flexibility, yet lenders follow defined criteria to assess repayment ability and asset security. Key eligibility parameters include:

Applicant profile: Salaried professionals, self employed individuals, and business owners can apply, provided they have a stable income source and repayment history.

Age requirements: Applicants generally need to fall within the prescribed age bracket at loan maturity to ensure continuity of income during the tenure.

Property ownership and type: The property must be legally owned, clear in title, and acceptable to the Lender. Residential and commercial properties are usually considered.

Income stability and credit score: Consistent income and a healthy credit profile improve approval chances and interest terms with an NBFC providing loan against property.

Property valuation and location: Loan eligibility depends on market value, condition, and location, as these factors influence risk assessment and loan to value ratios.

Also, read –How Is Loan Against Property Processed?

Documentation Required for NBFC Loan Against Property

Submitting the right documents ensures faster processing and accurate assessment of eligibility. Essential documents typically include:

Identity and address proof: Applicants must provide valid KYC documents such as Aadhaar, PAN, passport, or utility bills to establish identity and residential status.

Income and financial records: Salaried applicants submit salary slips and income statements, while self employed individuals provide income tax returns and financial statements.

Property related documents: Clear title deeds, sale agreements, and approved building plans are required to confirm legal ownership and property authenticity.

Business proof where applicable: Business owners may need registration certificates, GST filings, and bank statements for a loan against property by NBFC.

Credit and banking records: Recent bank statements help the Lender assess cash flow consistency and repayment capacity effectively.

While an NBFC loan against property offers flexibility, Lenders rely on clear paperwork to evaluate identity, income stability, and property ownership. Once documents are in place, the approval journey becomes smoother.

Also, read –Loan Against Property (LAP) Interest Rates & Charges

Best NBFCs for Loan Against Property in India

Selecting the right NBFC helps ensure competitive pricing, flexible terms, and dependable service. Leading NBFC options in India include:

Tata Capital: Known for transparent policies, flexible eligibility, and customised repayment options, Tata Capital is often considered the best NBFC for loan against property.

Bajaj Finserv: This lender offers quick approvals, attractive loan to value ratios, and digital friendly processes for salaried and self employed borrowers.

L&T Finance: L&T Finance focuses on stable interest structures and tailored solutions, particularly for business owners and professionals.

SMFG India Credit: As an NBFC providing loan against property, it is valued for streamlined documentation and responsive customer support.

Several established lenders in India are recognised for their customer centric approach and efficient processes, making them strong choices for property backed loans.

Common Differences Between NBFCs and Banks for LAP

When choosing a loan against property, understanding how NBFCs differ from traditional lenders helps borrowers make informed decisions. Below is a brief comparison to clarify the differences.

Eligibility flexibility: NBFCs usually apply relaxed income and credit criteria, making a loan against property by NBFC more accessible for self employed individuals and small businesses.

Processing and approval speed: NBFCs are known for faster turnaround times due to simplified internal processes and quicker credit assessment.

Documentation requirements: Compared to traditional lenders, an NBFC loan against property often involves fewer documents and less rigid verification.

Interest structure and pricing: NBFCs may offer customised pricing based on risk profiles, while traditional lenders follow more standardised rate structures.

Customer experience: NBFCs focus strongly on personalised service, providing tailored solutions and closer borrower support throughout the loan tenure.

Step-by-Step Process to Get a Loan Against Property from NBFC

Applying for a loan against property through an NBFC follows a structured yet borrower friendly approach. Understanding each stage helps ensure quicker approval and smoother coordination with the Lender.

Step 1: Application submission
The applicant submits basic personal, income, and property details to initiate the request for a loan against property from NBFC.

Step 2: Document verification
The Lender reviews KYC, income records, and property documents to confirm eligibility and legal ownership.

Step 3: Property valuation
An authorised assessment is conducted to determine the market value and loan eligibility.

Step 4: Credit appraisal
Income stability, repayment capacity, and credit profile are evaluated to finalise terms.

Step 5: Approval and disbursal
Once approved, the loan agreement is executed and funds are disbursed as per agreed timelines.

Tips to Choose the Right NBFC for Property Loans

Selecting the right NBFC is key to securing favourable terms and a smooth borrowing experience. Here are things to consider before choosing the best NBFC for property loans:

Assess eligibility criteria: Choose a Lender with flexible income and credit requirements that match your financial profile and repayment capacity.

Compare interest rates and charges: Review interest structures, processing fees, and other costs to avoid surprises during the loan tenure.

Check the loan-to-value ratios: Higher funding against property value improves liquidity while preserving ownership.

Evaluate repayment flexibility: The best NBFC for a loan against property usually offers longer tenures and customised EMI options.
Review service quality: Strong customer support and efficient processing ensure a dependable and stress-free loan journey.

Final thoughts

Choosing an NBFC loan against property has numerous benefits that cater to your financial needs and preferences. From high loan amounts and convenient processing to personalised customer service, they are an attractive option for securing funds against your property.

Tata Capital stands out as the best NBFC for loan against property with competitive interest rates, convenient online processes and top-notch customer service. Visit the Tata Capital website or download the Tata Capital App to apply for a Loan on Property today!

The details mentioned in this blog may change from time to time and from vendor to vendor or government policies.

FAQs

What is a loan against property from NBFC?

It is a secured loan where borrowers pledge residential or commercial property to a Lender in exchange for long term funding at competitive interest rates.

Who is eligible for a loan against property from NBFCs in India?

Salaried professionals, self employed individuals, and business owners with stable income, clear property ownership, and acceptable credit profiles can apply, subject to Lender criteria.

Which are the best NBFCs for loan against property in India?

Established lenders such as Tata Capital, Bajaj Finserv, L&T Finance, and SMFG India Credit are often regarded as the best NBFC for loan against property.

How does the interest rate of NBFC loan against property compare to banks?

NBFC rates may be slightly higher than traditional lenders, but they offer flexible eligibility, customised pricing, and faster approvals for diverse borrower profiles.

What documents are required for a loan against property from NBFC?

Applicants submit KYC documents, income proof, recent bank statements, and property ownership papers for assessment under a loan against property from NBFC.

How much time does it take for NBFCs to approve and disburse a loan against property?

Most NBFCs complete approval and disbursal within seven to ten working days, depending on document verification, property valuation, and internal credit appraisal processes.

Are NBFC loan against property products safe and regulated?

Yes, NBFCs operate under RBI regulations, ensuring structured lending practices, transparent disclosures, and borrower protection through defined compliance frameworks.

Are self-employed individuals eligible for NBFC loan against property?

Yes, self employed applicants are eligible, as an NBFC providing loan against property evaluates income stability, cash flows, and repayment capacity rather than fixed salaries alone.

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