Loan Against Property (LAP): Overview
A Loan Against Property is a secured loan where an individual or business pledges a residential, commercial, or industrial property as collateral to borrow funds from a bank or financial institution. The funds can be used for business expansion, education, medical emergencies, home renovation, or any other personal or professional need.
Advantages of Loan Against Property
-
High Loan Amount
You can borrow up to 60%–75% of the property's market value, depending on the lender. -
Lower Interest Rates
Since it's a secured loan, interest rates are generally lower compared to personal loans. -
Flexible Tenure
Repayment periods can range from 5 to 20 years, reducing EMI burden. -
Multipurpose Usage
Funds can be used for any personal or business purpose, without restrictions. -
Continued Use of Property
You retain ownership and can continue to use the property during the loan tenure. -
Top-up Facility
Many lenders offer additional top-up loans on the existing LAP at competitive rates.
Eligibility Criteria for Loan Against Property
. Age
Salaried: 21 to 60 years
Self-employed: 21 to 65 years
2. Employment Status
Salaried individuals working with a stable income history
Self-employed professionals or business owners with regular income
3. Income & Repayment Capacity
Sufficient and stable income to repay the loan. Income proof is required.
4. Credit Score
A CIBIL score of 700 or above is usually preferred to get better terms.
5. Property Criteria
Property should be legally owned, marketable, and free from
encumbrances.
Can be residential, commercial, or industrial.
Documents Required for Loan Against Property
. KYC Documents
PAN Card (mandatory)
Aadhar Card
Voter ID / Passport / Driving License
2. Address Proof
Utility bills (electricity/water/gas)
Passport / Aadhar Card / Rent agreement
3. Income Proof
For Salaried Individuals:
Last 3–6 months’ salary slips
Form 16 or ITR (last 2 years)
Bank statements (last 6 months)
For Self-Employed Individuals:
ITRs (last 2–3 years)
Balance sheet and Profit & Loss account (CA audited)
Business registration proof
Bank statements (last 6–12 months)