Beginner’s guide to loan against property

Loan against property is the most interested area of loan taking by the consumers as by its lower interest rate.Lending institution Interest for LAP ranges from 10% to 15%.

LAP stands for the most secured term of the loan for the bank as the guarantee is a property of the owner. This can be taken for the loan of educating the child, marriage. Business start-up, any other personal reasons. Most favorably by the banks too as it can be a no loss deal for them.When any person comes up with an idea of loan they have two options either to opt for the LAP or go for the personal loans. As personal loans security is less its interest is high and also the amount of loan is less, which is not in LAP because of which people do favor this one. LAP is a kind of loan which an illiterate also can take as well as a literate only ownership of a property is the criteria.


An owner can take a loan against his/her property if the property is:

  1. The place which you want to keep on the loan is a residential one means the area which the property belongs is residential.
  2. It can be the property where you reside.
  3. If you are the owner and you have put it on rent then also you can keep it on loan.
  4. If it is a plot.
  5. If it is a building on any economic means you are earning.
  6. Any commercial building which you gave it on rent is also eligible for the granting of the loan.

Now comes the topic of who all are will be the people who will be granted this loan:

  1. A person should be a regular income holder, he should have the earnings which will become a positive point for him to have the loan.
  2. He should have a property in his name, on which he is asking the loan from.
  3. The value of his property mortgaged will be taken into consideration during the calculation of loan.
  4. Past repayment record for loans, credit cards, will judge whether the person to whom the bank is providing the loan will be falling under the list of goods consumers.
  5. Any debt in past will be taken into consideration, so try to pay the interest on time without delay so that you can be counted in the good list of the bank.
  6. Savings amount will also be taken into consideration, which is a normal agenda to be verified to see your KYC (know your customer).


Documents to be as in attached with your application of getting the LAP:

  1. You need to have your id, (it can be adhaar card, driving license, voting card etc.)
  2. You need to have the right of possession letter, which will condemn the property is yours solely without any other partner and you are the sole owner.
  3. Your registry letter (property is in your name) by the tehsildar.
  4. Your income statement, in a month, what is your earning or you can state the income annually also.
  5. Bank statements for the previous six months if you are new to the bank then just the income letter and property ownership details will work.

Rest all the banks have different agenda to loans on the property, which will be met by you but the majority has been discussed above.

Advantages of LAP:

Loan Against Property comes with the long tenure of 30yrs which can profitable with low EMI’s.

In LAP maximum and minimum margins of loan is good enough to have it in for a personal (Rs. 5, 00,000 to Rs. 5, 00,00,000). It depends on the valuation of property

In the application for loan usually, it is been charged as 65%of the value of your property.

Loan Against Property is a secured loan because of which the interest rates are lower than the other ones.

New measures to reduce the load of consumers

Now the online application has been started by the banks for the very same loan on property scheme which will definitely help people by various means of saving time, money and paperwork. In their e form, you need to check your eligibility whether the loan can be provided to you or not, what will be the amount you are claiming against your property, tenure by which you will be returning the same and just submit the application.


Loans are the tricky part to go with when you need to risk your assets to grow the same, need to think a lot and hence check all the details given by banks for the very same. Loans as before described will be in the form of two- personal and against property, for emergency need choose personal as because the amount paid is less and tenure too you can cover the deal, and if you want to do for the factors of marriage, education, start-up, etc. which are mentioned before do go for loan against property(LAP).

By | 2018-01-04T13:49:00+00:00 November 2nd, 2017|Loan against Property|0 Comments

About the Author:

Pulkit Jain is the founder of LegalRaasta – India's top portal for registration, trademark, return filing and loans. Pulkit is a veteran CA with over 10+ of experience.

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