Loan Against Property (LAP) is a type of secured loan. A secured loan is a loan where the borrower mortgages his or her asset or property as collateral to the bank or the other lending institution. LAP could be used for several personal and professional needs such as house renovation, business expansion, purchase of a new machinery and other requirements. Typically the banks and other lending institutions offer loan against residential, commercial and industrial property. A borrower usually gets a fixed percentage of the property value known as LTV (Loan To Value) as loan amount against the property. The loan to value (LTV) varies from one bank to another. Usually, the loan to value ranges from 40% to 70% of the property value. The borrower can continue using the property that is mortgaged with the bank for its respective use.
However, both LAP and Personal Loan could be used for personal and professional needs but the interest rates of LAP are comparatively lower than a Personal Loan. This loan variant can be availed by salaried, self-employed professionals and self-employed business owners. The banks offer LAP either at the fixed rate of interest or at an adjustable rate.
Purpose of Loan Against property
Loan Against Property could be used for several purposes mentioned below:
Key Facts About Loan Against Property (LAP)
Loan Against Property can be further understood with the below mentioned key facts:
| Loan Against Property Interest Rate | Starting from 9% Per Annum Reducing |
| Loan to Value (LTV) |
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| Loan Tenure | Flexible loan tenure up to 15 years, however, the tenure varies depending on the age of the borrower |
| Processing Fee | Ranges from 0.50% to 1% of the loan amount |
| Loan Amount |
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| Who can Apply? |
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| Prepayment of Loan | Prepayment could vary from 2-5% (Read loan sanction terms carefully) |
Eligibility Criteria for Loan Against Property (LAP)
To obtain Loan Against Property the borrower should fulfil the eligibility criteria. The following factors affect the loan eligibility of the borrower:
| Eligibility Factor | |
| Age |
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| Job Experience or Business Stability |
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| Credit Score | Good Credit Score (650 and above is usually acceptable) |
Required Documents for Loan Against Property (LAP)
If borrowers are eligible for the loan, they are required to submit the required documents for a timely and hassle-free disbursal. Refer the below table to know more:
| Type of Document | Salaried Employee | Self-employed |
| Salary slips/ ITR |
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| Income Proof |
Any one of the following:
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| Identity proof |
Any one of the following:
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Any one of the following:
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| Job or Business stability | Full-Time job with a relevant number of years |
Proof of business registration:
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| Photographs | Two passport sized photographs signed across | Two passports sized photographs signed across |
| Residential address proof |
Any one of the following:
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Any one of the following:
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| Other documents |
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Cheque of processing fees in favour bank or NBFC |
Why Take a Loan Against Property through Pooja Consultancy?
The Pooja Consultancy team consists of experienced and service-oriented professionals who will help you choose the best loan offer to meet your specific requirement. They will analyze your financial and guide you throughout the loan process as well as any follow-up service requirements.
Contact Pooj Consultancy now and help us find the best loan for you.