Property Loan  Overview

A Loan Against Property (LAP), commonly known as a Property Loan, is a secured loan where you pledge a residential, commercial, or industrial property as collateral to get funds. It can be used for business expansion, education, medical needs, or any other personal or professional purpose.

Advantages of a Property Loan

  1. Large Loan Amounts
    Since it's secured, you can get a higher loan amount (typically up to 60–75% of the property's market value).

  2. Lower Interest Rates
    Interest rates are generally lower than unsecured loans like personal loans.

  3. Flexible End Use
    Funds can be used for any legitimate purpose—business, personal, or professional.

  4. Longer Repayment Tenure
    Repayment tenure can go up to 15–20 years, making EMIs more affordable.

  5. Ownership Retained
    You continue to own and use the property even though it's mortgaged.

  6. Tax Benefits (in specific cases)
    If used for business purposes, you may claim deductions on interest paid as a business expense.

Eligibility Criteria for a Property Loan

(Note: Varies by bank or financial institution)

  1. Age

  2. Self-employed: 21 to 65 years

  3. Salaried: 21 to 60 years

  4. Income & Repayment Capacity

  5. Stable and sufficient monthly income is required to meet EMI obligations.

  6. Type of Property

  7. Can be residential, commercial, or industrial.

  8. Should be owned, marketable, and free from legal disputes.

  9. Employment Status

  10. Salaried individuals, professionals, and business owners can apply.

  11. Credit Score

  12. A good credit history (preferably a CIBIL score of 700+) enhances approval chances.

Documents Required for a Property Loan

1. Identity Proof (any one)

Aadhar Card

PAN Card (mandatory)

Passport

Voter ID

Driving License

2. Address Proof (any one)

Aadhar Card

Utility Bills

Rent agreement

Passport

3. Income Proof

For Salaried Individuals:

Salary slips (last 3–6 months)

Form 16 or ITR (last 2 years)

Bank statements (6 months)

For Self-Employed Individuals:

ITRs (last 2–3 years)

Balance Sheets & P&L statement (CA certified)

Business license or registration

Bank account statements (6–12 months)

4. Property Documents

Property title deed (clear ownership proof)

Approved building plan

Sale deed or purchase agreement

Encumbrance certificate

Property tax receipts

NOC from society or builder (if applicable)

5. Other Documents

Passport-size photographs

Loan application form

Processing fee cheque