LAP( Loan Against Property)

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Loan Against Property

It is a loan where the borrower takes a loan from bank of financial institution where the security of the loan is the property owned by the borrower. It can be availed for variety of purposes such as purchase of machinery, working capital requirements, home renovation, medical needs, and so on. It can be availed against both residential and commercial property. Property needs to be approved for lending as per the respective lender’s policy.

This facility is one of the best options for borrowers as there is no requirement of selling the property. In spite of mortgaging the property borrower can utilize it. Lenders usually maintain a margin while sanctioning a Loan against Property (also known as LTV or Loan-to-Value).This margin usually ranges from 50-70% of the property value

Loan against property is an excellent debt consolidation tool. It is much cheaper than unsecured loans and can be used to consolidate all the existing loans at a much  lower EMI.

Features of Loan Against Property

    • No need to sell the property as it provides you with instant Liquidity
    • Excellent debt consolidation tool
    • Loan tenure upto 15 years
    • Attractive Rate of Interest
    • Flexible repayment options :  Emi based loan or Dropline Overdraft Facility
    • Funds can be used for Business as well as Personal needs
    • Residential and Commercial properties accepted as collateral

Documents Required for Loan Against Property

  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 13 years
  2. Property tax paid receipt
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