Loan Against Property(LAP)

All About Loan Against Property

Loan against property, as the name suggests, is applicable for individuals applying for a loan for purchase of a land/property, be it for commercial or residential interests. This comes off as a better option during times of financial crisis. Loan against property remains one of the most sought after loans in India, mainly due to the ever increasing real-estate prices. A take-over of existing loan, with options of refinancing is also made available by most banks.

What purpose can one use loan against property funds for?

  • Funding business and working capital needs of individuals, partnerships, private companies and SME's
  • To purchase new property by pledging existing property
  • As lower cost alternative to personal use and uses such as marriages, education, vacation, home renovation, medical emergency

Benefit of availing Loan against Property (LAP) instead of other loans?

  • As loan against property is secured against property, banks offer lower rate of interest compared to unsecured business loans or personal loans
  • Loan tenure can be up to 18 years leading to lower EMI compared to unsecured loans where loan tenure can only be up to 5 years
  • No additional collateral or guarantee is required
  • Loan can be taken in name of company/ firm even if the property is owned in individual name of partners/ directors

Loan against property Details

Find Home Loan details of Amount Funded, Interest Rate, Prepayment charges, Processing Fee, Tenure, etc.,

  • Loan against property Amount Funded
  • Up to 40% to 75% of Property Value
  • Loan against property Tenure
  • 5 year to 15 years
  • Guarantor requirement
  • Not required
  • Interest Rate (Monthly Reducing Balance)
  • 10.50% to 16%
  • Processing Fees
  • 1% to 2% of Loan Amt
  • Prepayment charges
  • 0% to 4% on outstanding loan amount

Apply For Home Loan

Apply For Home Loan

List of Home Loan Documents Required

If you are looking for a Home Loan from a bank in India, you would require the following Home Loan Documents to process your Home loan application.

List of Home Loan Documents Checklist for Salaried Person.

  • Photo Identity Proof
  • Residence Address Proof
  • Bank Statement: Latest 1 year statement where your salary is getting credited
  • Property Documents: Property documents to be submitted based on the purchase of your dream home.
  • Job Continuity Proof:
  • Income Proof: Latest 6 months Salary Slips and Last 2 Year Form 16.
  • Photo Identity Proof
  • Copy of agreement executed / Sales Deed.
  • Share Certificate.
  • Latest Maintenance Bill.
  • List of documents & sanction letter given by Existing Banker (If Applicable).
  • Advance Processing Cheque required to process loan documents for sanction.
  • 2 passport size colour photograph
  • IF PROFESSIONAL: Please submit your Professional Degree Certificate.
  • IF EXISTING LOANS: If any existing loan, please submit sanction letter, Payment Track Record.

List of Home Loan Documents Checklist for Self Employed Business Person

  • Photo Identity Proof
  • Residence Address Proof
  • Bank Statement: Latest 1 year statement where your salary is getting credited
  • Property Documents: Property documents to be submitted based on the purchase of your dream home.
  • Office Address Proof
  • IF PROFESSIONAL: Please submit your Professional Degree Certificate.
  • Business Existence Proof
  • Copy of agreement executed / Sales Deed.
  • Share Certificate.
  • Latest Maintenance Bill.
  • List of documents & sanction letter given by Existing Banker (If Applicable).
  • Advance Processing Cheque required to process loan documents for sanction.
  • IF EXISTING LOANS: If any existing loan, please submit sanction letter, Payment Track Record.
  • Income Proof: Latest 3 years Income Tax Returns including Computation of Income, Profit and Loss Account, Balance Sheet, Audit Report, etc.,
  • 2 passport size colour photograph

Loan Against Property FAQs

The bank looks at your repayment capacity along with considering various other factors as income, age, spouse’s income, assets, liabilities etc. and then calculates the loan amount. Usually the eligibility of the loan does not exceed 60% of the market value of the property under consideration.
It’s usually your spouse. But of the property is co-owned, all co-owners are co-applicants.
Loans against property, though subject to not exceeding your retirement age, has a maximum tenure of 15 years. This condition is however flexible in certain cases.
Loans are repaid in the form of EMI (Equated Monthly Instalments).
Mortgaging of your property is mainly the security provided in this type of loan. Collateral security in the form of assignment of insurance policy or any such other financial instruments are also required, as deemed necessary by the bank.
Yes. Prepayment is possible and there is no prepayment fee if you repay the loan after six months of availing the loan. However, this should happen from your own source of funds without transferring the loan.
A revised repayment schedule is worked out after the repayment capacity of the applicant is reassessed. The new rate will be applicable as per the then current rates of resident Indian loans and the revised rates will be applicable on the outstanding balance.