Loan against Property
A Loan Against Property (LAP) allows the consumers to raise funds against their residential, commercial, or industrial properties. These funds can be used for various personal or business financial needs, such as medical emergencies, business expansion, or home renovations. Even after getting LAP, you maintain the ownership and usage rights of your property. These bank loans come with the lower interest rates in comparison to unsecured bank loans.
Intrest Loan
Usually 10.49% p.a. onwards; some PSUs may offer lower rates
Loan Amount
Usually 10.49% p.a. onwards; some PSUs may offer lower rates
Tenure
Up to 5 years (some lenders offer repayment period till 8 years)
processing Fees
0.5% to 4% of loan amount (may vary across lenders)
Eligibility Criteria For Loan against Property
Age Requirements: Applicants must be aged between 18 and 70 years.
Residential Status: Both Resident and Non-Resident Indians (NRIs) can apply.
Eligible Applicants: Salaried individuals, self-employed professionals, and self-employed non-professionals..
Income Minimums: A monthly salary of at least ₹12,000 and a net annual income of ₹1.5 lakh or more.
Professional Experience: Minimum of 1 year with the current organization or in the current business.
Creditworthiness: A score of 750 or above is considered good.
Property Eligibility: Residential, commercial, and industrial properties qualify as collateral.
Documents Required to Apply for Loan against Property
Identity Proof: PAN Card, Passport, Voter ID Card, Driving License
Age Proof: PAN Card, Passport, Birth Certificate, or any official document from a statutory authority
Residence Proof: Passport, Ration Card, Rental Agreement, Utility Bills (Telephone/Electricity), Bank Passbook or Statement, Driving License
Income Proof
For Salaried Individuals: Form 16, Latest Salary Slips, Income Tax Returns for the past 3 years, Investment Proofs (if any)
For Self-Employed Individuals: Income Tax Returns for the last 3 years, Balance Sheet and Profit & Loss Account Statements, Business License Details, Proof of Business Address
Property-Related Documents:
Title Deeds, including the property's historical documents
Approved Building Plan (if applicable)
Nil Encumbrance Certificate for the property
Loan Against Property Processing Fees & Other Charges
Here are some general fees and charges that may be applicable to your mortgage loan:
| Processing Fees | 1% - 2% of loan amount |
|---|---|
| Part Prepayment Charges |
|
| Penal Interest | Usually at 24% p.a. (2% per month on the overdue installment/s) |
| Foreclosure Charges |
|
How to Apply for Loan Against Property at MybankingTips?
Step 1:
Provide basic details such as your mobile number, loan amount, property location, employment type, etc.
Step 2:
Compare and apply from the list of offers.
Step 3:
Wait for the loan experts to get in touch with you.
Features and Benefits Loan Against Property
- 1. Higher loan amount
- 2. Longer loan tenure
- 3. Lower interest rates
- 4. No end use restrictions
- 5. Higher chances of loan approval
- 6. Overdraft facility
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FAQs Loan Against Property
What is a Loan Against Property (LAP)?
A Loan Against Property is a type of secured loan where you pledge your property as collateral to borrow money from a bank or financial institution. You can put your residential, commercial, or industrial property as collateral. You can use this money for funding a wedding, expanding a business, or consolidating debts or other purposes.
What are the benefits of a Loan Against Property?
A Loan Against Property comes with several advantages. It comes with lower interest in comparison to unsecured bank loans. You can repay these loans for an extended period of 20 years.
Who is eligible for a Loan Against Property?
The lenders decide the eligibility for the Loan Against Property(LAP) based on various factors such as the borrower’s age, the location and condition of the property, repayment capacity, and credit score. The eligibility criteria vary for each lender or financial institute.
What kinds of properties are accepted for a Loan Against Property?
Properties such as residential, commercial, and industrial properties are accepted as collateral for the loan against property. Then the lender evaluates your loan application based on the condition, location, and age of your property.
What is the maximum repayment tenure for a Loan Against Property?
The maximum repayment tenure for the loan against property ranges from 15 to 20 years based on the different lenders. The longer tenure makes the monthly payment affordable but in the end, you end up paying the higher overall amount.
What happens if you cannot repay a Loan Against Property?
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