Loan Against Property (LAP): Unlock the Value of Your Property
A Loan Against Property (LAP) is a secured loan where you can pledge your residential, commercial, or industrial property to get funds for business expansion, education, medical emergencies, or other financial needs. Since it is backed by property as collateral, it offers higher loan amounts and lower interest rates compared to unsecured loans.
Benefits of a Loan Against Property
✅ High Loan Amount – Avail up to 60-75% of your property's market value as a loan.
✅ Lower Interest Rates – Since it's a secured loan, interest rates are lower than personal or business loans.
✅ Flexible Repayment Tenure – Repayment terms range from 5 to 15 years, making EMIs manageable.
✅ Multi-Purpose Usage – Use funds for business expansion, education, medical emergencies, wedding expenses, or debt consolidation.
✅ Ownership Retained – You continue to own and use your property while getting financial support.
✅ Minimal Documentation – Quick and hassle-free approval with simple paperwork.
✅ Balance Transfer Facility – Transfer an existing LAP to another lender for lower interest rates and better terms.
✅ Tax Benefits – Interest paid may be tax-deductible if used for business purposes under the Income Tax Act, 1961.
Eligibility Criteria for a Loan Against Property
The eligibility depends on factors like income, property value, repayment capacity, and credit history. Below are the general requirements:
For Salaried Individuals
✔ Age: 21 – 60 years
✔ Employment: Minimum 2-3 years of stable job history
✔ Income: Minimum monthly salary as per lender’s criteria
✔ Credit Score: 700+ recommended for better loan terms
For Self-Employed Individuals & Business Owners
✔ Age: 25 – 65 years
✔ Business Stability: Minimum 3 years of profitable business operations
✔ Financial Strength: Sufficient income and revenue proof
✔ Credit Score: Strong repayment history for higher approval chances
For Companies & Firms
✔ Business Vintage: Minimum 3 years of operation
✔ Financial Health: Consistent profit and revenue records
✔ Property Ownership: Property should be in the company’s or promoter’s name.
Documents Required for a Loan Against Property
1. KYC Documents (Identity & Address Proof)
📌 Aadhaar Card / PAN Card / Passport / Voter ID
📌 Utility Bill / Rental Agreement / Passport for Address Proof
2. Income & Financial Documents
✔ For Salaried Individuals:
📌 Last 3 months’ salary slips
📌 Last 6 months’ bank statements
📌 Form 16 / Income Tax Returns (ITR) for the last 2 years
✔ For Self-Employed Individuals & Business Owners:
📌 Last 2-3 years’ ITR with audited financial statements
📌 Last 12 months’ business and personal bank statements
📌 Business Registration Certificate / GST Registration
3. Property Documents
📌 Title Deed of the property (Ownership Proof)
📌 Approved Building Plan & Property Tax Receipts
📌 Encumbrance Certificate (Ensures no legal disputes on the property)
4. Loan-Specific Documents
📌 Duly filled Loan Application Form
📌 Passport-size Photographs
📌 Existing Loan Statements (if any)