Loan Against Property – The Concept, Benefits, Eligibility and More!

A loan against property (or LAP) is an amount disbursed by a lender to a borrower against a mortgage of property. The loan is given as per the certain percentage of a mortgage property's market value. It is generally around 40% to 60%.

Benefits of availing loan against property:

Loan against property is attained for enjoying the following benefits:

> Funding a dream vacation
> Expanding business
> For son/daughter’s marriage
> Funding for children’s education 
> Funding medical treatments

Eligibility Criteria for Loan Against Property

The bank looks at the following factors as loan against property eligibility for attaining loan:

> Value/cost of the mortgaged property
> Your savings, income and debt obligations
> Your repayment track record for other credit cards or loans

The interest rate on LAP:

The interest rate on loan against property ranges from 12 to 15.75% with a long tenure of up to 15 years.

Documents required for applying for a loan against property

Here is the loan against property documents you need:

> Identity Proof: PAN card, Passport, Voters ID or Driving License
> Residence Proof: Ration Card, Passport, or Utility bills like water or electricity bills
> Income Proof: Show the past three months of salary slips, along with submitting the Form 16
> Proof of job continuation: Current employment certificate
> Work experience certificate
> Property documents
> Copy of executed agreement
> Latest maintenance Bill
> Share certificate
> Investment Proof: Shares, FD or Mutual Funds

After submitting these loan documents, the bank will go through the details and if everything is approved, you will get the loan within a few days.

Additional Read: Loan Against Property – The Concept, Benefits, Eligibility and More!