Can processing fees vary depending on the loan amount?

Yes, processing fees as a percentage may be reduced with higher loan amounts. While the exact fee slabs differ by lender, generally, larger loans attract relatively lower percentage processing fees as economies of scale kick in.

Is stamp duty applicable on a Loan Against Property?

Yes, stamp duty is applicable on loan agreements as per state laws, typically ranging from 1-3% of the property value.

Is the processing fee refundable if my loan application is rejected?

No, processing fees are strictly non-refundable. These fees cover administrative efforts and due diligence involved in processing your application, whether or not the loan is ultimately sanctioned.

Transparent LAP Fees and Penalties Explained

When life demands financial support for education, marriage, healthcare, or business needs, a Loan Against Property (LAP) serves as a valuable funding option where your property acts as collateral. Borrowing from a regulated Non-Banking Financial Company (NBFC) like L&T Finance ensures transparency and adherence to RBI guidelines. This guide delves deep into the fees and charges associated with Loan Against Property, helping you understand every cost involved, from processing fees to foreclosure charges and penalties, ensuring a well-informed loan decision.

Fees and Charges for Loan Against Property at L&T Finance

Discover the fees and charges for a Loan Against Property at L&T Finance, including processing fees, interest rates, and other applicable costs.

Charge Type	Details
Processing Fee:	Up to 3% of sanctioned amount + applicable taxes
Login Fee:	Up to Rs.5000/- (inclusive of applicable taxes) (nonrefundable)
EMI Dishonour/Bounce Charge* *A bounce charge is a charge for (i) dishonour of any repayment instrument; or (ii) non-payment of instalment(s) on their respective due dates due to dishonour of payment mandate or non-registration of the payment mandate	As shown in the table below
Loan sanction amount (in INR)	Charges in (in INR)
< ₹ 5 Lakh	₹ 500
₹ 5 Lakh – ₹ 50 Lakh	₹ 1000
> ₹ 50 Lakh – ₹ 2 Crore	₹ 1500
> ₹ 2 Crore	₹ 2000
Penal Charge/Late Payment Charge (LPC):	Up to 2% per month (p.m.) on overdue EMI + applicable taxes
Annual Maintenance Charges (applicable only for Dropline Overdraft and Hybrid Overdraft)	Up to 0.25% + applicable taxes of Dropline Limit available at start of each year (i.e. first on 13th Month and then every anniversary thereon).
Document retrieval / Duplicate NOC charges	Duplicate NOC (charge is applicable for paper copy post 3 free copies per customer), list of documents, Photo copies of the documents (property & others) Up to Rs.1000/- + applicable taxes
Repayment instrument swap fee (per swap):	Up to Rs. 500/- + applicable taxes (applicable only for branch walk-ins)
Asset valuation and verification fee	Up to 1% of loan amount + applicable taxes
Documentation and repayment setup fee	Up to Rs.2,000/- + applicable taxes
Interest conversion fee	Floating interest rate to floating interest rate: 0.5% of balance Loan Amt. or Rs. 10,000/- whichever is higher + applicable taxes Floating interest rate to a fixed interest rate and vice versa: 1% of balance Loan Amt. or Rs. 10,000/- whichever is higher + applicable taxes
Charges incurred by LTF for initiating action under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002:	Issue of Loan Recall Notice = Up to Rs. 500/ –
	Issue of Demand Notice = Up to Rs. 1,000/ –
	Issue of Possession Notice = Up to Rs. 2,000/ –
	Applying District Magistrate Order = Up to Rs. 8,000/ –
	Taking Physical possession = Up to Rs. 20,000/ –
	Actual cost incurred will be debited for expenses pertaining to Publication of Possession Notice/ Publication Demand Notice/Publication of Sale cum Auction Notice. All applicable taxes will be added.
Loan Cancellation Charges:	Up to Rs. 5000/– + applicable taxes
Recovery of proportionate actual expenses from disbursement date(s), from individual borrower(s) in	LAP – Up to 1% of total disbursed loan amount + applicable taxes in case of closure within 24 months
Foreclosure / Full Prepayment Charges – Loan Against Property:	For Individual Borrowers –
	Floating Rate – Nil Charge
	Nil Charges where end use is not for business/commercial purpose For cases where end use is for business/commercial purpose
	i. Less than 1 year from disbursement – up to 3% principal outstanding + applicable taxes*
	ii. Post 1 year of disbursement – up to 2% on principal outstanding + applicable taxes*
	*Note: NIL for loans and advances sanctioned or renewed on or after January 1, 2026.
	Fixed Rate –
	i. Less than 1 year from disbursement – up to 4% principal outstanding + applicable taxes
	ii. Post 1 year of disbursement – up to 3% on principal outstanding + applicable taxes
	For Non – Individual Borrowers – (Applicant/Co – applicant)
	Fixed/Floating rate loan –
	i. Less than 1 year from disbursement – up to 4% principal outstanding + applicable taxes*
	ii. Post 1 year of disbursement – up to 3% on principal outstanding + applicable taxes*
	*Note: NIL for MSEs loans and advances, sanctioned or renewed on or after January 1, 2026 for floating rate loan.
Pre-payment Charges – Loan Against Property:	For Individual Borrowers –
	Floating Rate – Nil Charge
	Nil Charges where end use is not for business/commercial purpose. For cases where end use is for business/commercial purpose
	i. Less than 1 year from disbursement – up to 3% on Partial/Pre-payment amount + applicable taxes*
	ii. Post 1 year of disbursement – up to 2% on Partial/Prepayment amount + applicable taxes*
	*Note: NIL for loans and advances sanctioned or renewed on or after January 1, 2026.
	Fixed Rate –
	i. Less than 1 year from disbursement – up to 4% on Partial/Pre-payment amount + applicable taxes
	ii. Post 1 year of disbursement – up to 3% on Partial/Pre-payment amount + applicable taxes
	For Non – Individual Borrowers – (Applicant/Co – applicant)
	Fixed/Floating rate loan –
	i. Less than 1 year from disbursement – up to 4% on Partial/Prepayment + applicable taxes*
	ii. Post 1 year of disbursement – up to 3% on Partial/Prepayment amount + applicable taxes*
	*Note: NIL for MSEs loans and advances, sanctioned or renewed on or after January 1, 2026 for floating rate loan.
Foreclosure / Full Prepayment Charges – for Dropline Overdraft / Hybrid Overdraft	For Individual Borrowers –
	Floating Rate – Nil Charge
	Nil Charges where end use is not for business/commercial purpose. For cases where end use is for business/commercial purpose
	i. Less than 1 year from disbursement – up to 3% on Dropline Limit + applicable taxes*
	ii. Post 1 year of disbursement – up to 2% on Dropline Limit + applicable taxes*
	*Note: NIL for loans and advances sanctioned or renewed on or after January 1, 2026.
	Fixed Rate –
	i. Less than 1 year from disbursement – up to 4% on Dropline Limit + applicable taxes
	ii. Post 1 year of disbursement – up to 3% on Dropline Limit + applicable taxes
	For Non – Individual Borrowers – (Applicant/Co – applicant)
	Fixed/Floating rate loan –
	i. Less than 1 year from disbursement – up to 4% on Dropline Limit + applicable taxes*
	ii. Post 1 year of disbursement – up to 3% on Dropline Limit + applicable taxes*
	*Note: NIL for MSEs loans and advances, sanctioned or renewed on or after January 1, 2026 for floating rate loan.
Pre-payment Charges – – for Dropline Overdraft / Hybrid Overdraft:	Part pre-payment of Loan toward limit reduction is not available
Non-Compliance Charges:	Up to 1% p.a. of principal outstanding loan amount + applicable taxes
Breakup between Principal & Interest:	As per Repayment Schedule
Example of SMA/ NPA classification:	More particularly mentioned under “Classification of Assets” under the head “Miscellaneous”
Field collection service fee:	Up to Rs. 500/- per collection + applicable taxes
Legal fees and charges:	As per actuals or Up to Rs. 50,000/- whichever is lower + applicable taxes
Recovery charges:	As per actuals or Up to Rs. 1,00,000/- whichever is lower + applicable taxes
Auction fees:	Up to 1% of auction sale amount + applicable taxes

FAQs & Support

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The processing fee is usually a percentage of the sanctioned loan amount, varying from lender to lender. At L&T Finance, the processing fee can be up to 3% of the sanctioned loan amount plus applicable taxes. It includes initial charges for processing your loan application and is collected partially upfront and at the time of disbursement.

Apart from the disclosed fees like processing fees, legal and technical charges, and stamp duty, some lenders may impose additional charges such as penalties for late payments, document retrieval fees, or cheque bounce charges. Reviewing the full loan agreement and disclosures from the lender is crucial to avoid surprises and hidden charges.

Prepayment or foreclosure penalties may apply depending on the loan structure. Typically, these charges range from 2% to 5% on the outstanding principal or prepayment amount. However, recent RBI guidelines have mandated waiver of such charges on floating rate loans sanctioned or renewed after January 1, 2026, for individual borrowers with non-business usage and MSEs.

Yes, stamp duty is a mandatory state government tax on registering loan agreements secured by property. It typically ranges from 1% to 3% of the property value, varying by state. This cost must be borne by the borrower to ensure the loan document's legal validity.

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