Loan Against Property


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What is Loan Against Property?


Loan against property (LAP) means a loan that is given or disbursed against the property. The loan is disbursed at a certain percentage of market value of the property, usually around 50% – 90%. Loan against property is the part of secured loan category where the borrower issues a guarantee by using property as security.

How to apply for Loan Against Property?

Advantages of Loan Against Property?

☞ Lower interest rates as its secured loan.

☞ The loan amount can be used for Business Working Capital.

☞ Greater Credit Eligibility.

Minimum Requirements for Loan against property

ANNUAL REVENUE

₹ 1 Crore

Credit Score

Time in Business

2 Years

Documents required for Loan Against Property or Mortgage Loan

PAN CARD/PASSPORT

PROCESSING FEE CHEQUE

BANK STATEMENT

CREDIT SCORE

AADHAR CARD/PASSPORT

COPY OF PROPERTY DOCUMENTS

LAST 3 YEARS BALANCE SHEET

LATEST OD/CC SANCTION LETTER

INCOME TAX RETURN OF LAST 3 YEARS

PROOF OF BUSINESS

PROFIT & LOSS STATEMENT

Frequently asked questions

1.What type of Property that can be Mortgaged?

☞ Lenders give loan against those property whether they are residential (rented out and self occupied) or commercial properties. A plot or land without construction can also be considered as collateral by the lender.

2.What is Loan against Property (LAP) EMI?

☞ LAP EMI is a defined amount you will pay for repayment of your loan monthly till the loan is completely paid.
☞ However, the EMI amounts stays the same, every month the part of interest keeps coming down and principal keeps on increasing, except when interest rate increases.
☞ LAP tenure in India ranges from 5 years to maximum of 18 years. Longer the tenure, lower the EMI.

3.How should one pay the EMI on loan against property?

☞ The easiest way of paying a mortgage loan EMI is by the way of ECS in favour of the bank. It is not necessary to have a bank account in the same bank from whom you have availed the loan.
☞ Other instruments can include post-dated cheques (PDCs) and by demand drafts, although, these are rarely used nowadays.

4.What are the benefit of paying Loan Against Property (LAP) EMI through ECS?

☞ Key benefit of paying LAP EMI through ECS is that, there is no signature mismatch risk for cheque bouncing or any other technical issue. Note heavy cheque bouncing charges are charged by the banks even for technical bounce and therefore, it is advisable to avoid this risk by availing ECS mode of debit.

5.How is the Loan against Property(LAP) EMI Calculated?

☞ Loan amount – Higher the loan amount, higher will be the EMI. Rate of interest – Lower the loan interest rate, lower the EMI. Loan Tenure – Longer the loan tenure, lower the EMI.

6.Can I repay the Loan Against Property ahead of schedule?

☞ Yes you can you can repay your loan ahead of schedule and there is no prepayment fee only if you repaying the loan from your own source of funds and without transferring the loan.

7.Who Qualifies for Loan Against Property?

☞ Your income, savings, debt obligations are considered.
☞ Cost/value of the property against which you want loan are considered
☞ Your track record for other loans, credit cards repayments are considered

See if you qualify

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