What is Loan Against Property (LAP)?

A Loan Against Property (LAP) is a secured loan in which a borrower mortgages a residential, commercial, or industrial property to obtain funds from a bank or financial institution. The loan amount depends on the market value of the property and the borrower’s repayment capacity. LAP can be used for business expansion, working capital, education, medical needs, or personal requirements.

Benefits of Loan Against Property

  • Higher Loan Amount: Avail up to 60–70% of the property’s market value.

  • Lower Interest Rates: Cheaper than unsecured loans due to property security.

  • Longer Repayment Tenure: Flexible repayment options up to 15–20 years.

  • Multi-Purpose Usage: Funds can be used for business or personal needs.

  • Continue Using the Property: Ownership and usage of the property remain with the borrower.

  • Better Cash Flow Management: Reduced EMI due to longer tenure.

  • Tax Benefits: Interest paid may be tax-deductible as per prevailing tax laws.

Eligibility Criteria for Loan Against Property

Eligibility varies by lender but generally includes:

  • Applicant must be an Indian citizen

  • Age: 25 to 65 years

  • Applicant Type: Salaried individuals, self-employed, professionals, business owners

  • Income Stability: Regular and verifiable income source

  • Credit Score: Ideally 650 or above

  • Property Type: Residential / Commercial / Industrial with clear title

  • Ownership: Applicant should be the legal owner of the property

Documents Required for Loan Against Property

KYC Documents

  • PAN Card

  • Aadhaar Card

  • Passport / Driving License / Voter ID

Income Documents

For Salaried Individuals:

  • Salary slips (last 3–6 months)

  • Bank statements (last 6 months)

  • Form 16 / Income Tax Returns

For Self-Employed / Business Owners:

  • Bank statements (last 6–12 months)

  • Income Tax Returns (last 2–3 years)

  • Profit & Loss Statement and Balance Sheet

Property Documents

  • Sale Deed / Title Deed

  • Approved Building Plan

  • Encumbrance Certificate

  • Property Tax Receipts

  • Occupancy / Completion Certificate (if applicable)

Other Documents

  • Passport-size photographs

  • Loan application form