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What is a Loan Against Property?

loan against property (LAP) is a secured loan that banks, housing finance companies and NBFCs provide against residential or commercial property. These loans are usually offered at a lower interest rate as compared to a personal loan or business loan and are disbursed at a reasonable time.

Features and Benefits of Loan Against property
  • 1. Easy to get – LAP is a secured loan. Banks maintain a margin in the range of 50-90% of the value of the property.

    2. Longer tenure – Usually banks sanction a LAP between 3 Lakhs to  100 Crores. It is the only loan facility other than the Housing Loan that allows banks to stipulate repayment periods exceeding 10 years. Banks are willing to sanction loans against property with tenures extending up to 15 years.

    3. Lower interest rate – In comparison to Personal Loans, LAPs have a lower rate of interest. The reason is the security offered to the banks.

    4. Lower EMI – When you have longer tenure and a lower interest rate than Personal Loans, the EMIs are bound to be lower.

    5. Flexibility – Various banks have flexible loan products in this category. They are the term loans and overdraft facilities. You do not have this flexibility with Personal Loans.

    6. Tax Benefits – You get benefits on the Income Tax front if you avail a LAP for home renovation purposes. Usually, customers go for home renovation loans if they have to carry out repairs to the same property to be mortgaged to the bank. You might carry out repairs to your home but avail a LAP by mortgaging another property. Under such circumstances, you have to prove that the end use of the loan is for carrying out renovations to the property you reside in.

Documents Required
  1. KYC Documents

The borrower should furnish KYC documents regarding identity proof and address proof. These documents include:

Identity Proof

  1. PAN Card
  2. Aadhaar Card
  3. Voter ID
  4. Passport
  5. Driving Licence 

Address proof

  1. Registered Rent agreement
  2. Aadhaar Card
  3. Driving Licence
  4. Lease agreement
  5. Passport
  6. Latest gas/Electricity bill

2.Income Proof – Financial Documents

  1. Salary slips for the last 6 months for salaried employees (In addition, IT returns for the previous 3 years along with Form 16)
  2. IT returns for the past 3 years for self-employed persons (Some banks accept 2 years IT returns as well)
  3. Statement of A/c for the past 1 year where your salary is credited (in the case of salaried people)
  4. Profit and Loss statement and Balance sheet for the last 2 years in the case of self-employed persons
  5. Sales tax, GST registration certificates, if applicable
  6. Partnership deed in case of partnership firms (if the applicant is one of the partners or the firm itself)
  7. Certificate of Incorporation for limited companies(if the applicant is one of the directors or the company itself)

Other Documents:

  1. Loan application form

Property Documents:

  1. Copies of all property documents that can establish the chain of ownership for the past 30 years
  2. Encumbrance certificate for 30 years
  3. Property tax paid receipt

Top Loan Against Property Providers

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IDFC first bank

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ICICI bank

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Citi bank

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HDFC bank

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Kotak Mahindra

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Tata Capital

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Yes Bank

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City bank

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PNB Housing Loan

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We’d Love to Help You With Your Loan Against Property

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