What is a Loan Against Property (LAP)?
A Loan Against Property (LAP) is a secured loan where individuals or businesses pledge their residential, commercial, or industrial property as collateral to avail a loan. It is a cost-effective funding option offering higher loan amounts and lower interest rates.
Key Features & Benefits of LAP
✅ High Loan Amount – Get up to 60-80% of property value
✅ Low Interest Rates – Starting from 8.50% p.a.
✅ Flexible Tenure – Ranging from 5 to 20 years
✅ Usage Flexibility – Fund business expansion, education, medical emergencies, or debt consolidation
✅ Retain Ownership – Continue using your property while securing funds
✅ No Restrictions on Usage – Use the funds for any personal or business purpose
Types of Loan Against Property
For Individuals:
🏠 Residential Property Loan – Avail a loan by mortgaging your owned residential property.
🏢 Commercial Property Loan – Use commercial properties such as offices and shops as collateral.
🏡 Plot Loan – Mortgage land or plots for securing funds.
For Businesses:
🏭 Industrial Property Loan – Secure funds against factories or warehouses.
💼 Lease Rental Discounting (LRD) – Avail a loan against rental income from leased commercial properties.
🏘 Loan Against Multiple Properties – Pledge multiple properties for higher loan amounts.
Eligibility Criteria for Loan Against Property
| Criteria | Salaried Individuals | Self-Employed/Businesses |
|---|---|---|
| Age | 21 – 60 years | 21 – 70 years |
| Employment Type | Salaried professionals | Self-employed professionals, business owners |
| Income Stability | Minimum ₹25,000/month | Profitable business for at least 2 years |
| CIBIL Score | 650+ | 650+ |
| Property Type | Residential/Commercial | Commercial/Industrial |
Loan Against Property Interest Rates & Charges (2024)
| Lender | Interest Rate (p.a.) | Processing Fee |
|---|---|---|
| HDFC Bank | 8.50% – 10.75% | 1% of loan amount |
| ICICI Bank | 9.00% – 11.50% | ₹5,000 onwards |
| SBI | 8.40% – 10.25% | 0.50% of loan amount |
| Axis Bank | 8.75% – 12.00% | NIL |
| Bajaj Finserv | 9.50% – 14.00% | 1.25% of loan amount |
Note: Interest rates may vary based on credit profile and loan tenure.
Documents Required for Loan Against Property
📌 For Salaried Individuals:
- KYC Documents (Aadhaar Card, PAN Card, Passport)
- Salary Slips (Last 3 months)
- Bank Statements (Last 6 months)
- Property Ownership Documents
📌 For Self-Employed & Businesses:
- KYC Documents of Proprietor/Partners/Company Directors
- Business Registration Certificate
- Income Tax Returns (Last 2-3 years)
- Audited Financial Statements
- Property Ownership Documents
How to Apply for a Loan Against Property?
📌 Step 1: Check your eligibility and loan amount
📌 Step 2: Choose a lender offering the best interest rates
📌 Step 3: Submit the required documents for verification
📌 Step 4: Property valuation and loan approval process
📌 Step 5: Sign the agreement and get the funds disbursed
Repayment Options for LAP
- Standard EMI – Pay fixed monthly installments
- Overdraft Facility – Withdraw as needed & pay interest only on the used amount
- Balloon Repayment – Pay lower EMIs initially & higher towards the end
- Step-up EMI Plan – Increase EMI payments as income grows
Frequently Asked Questions (FAQs)
1. What is the maximum loan amount I can get under LAP?
You can avail up to ₹10 Cr or 60-80% of the property value, depending on lender policies.
2. Can I apply for a LAP with a low CIBIL score?
A CIBIL score of 650+ is preferred, but some lenders may consider lower scores with additional documents.
3. What happens if I fail to repay my LAP?
If you fail to repay, the lender may seize and auction your property after the legal notice period.
4. Can I prepay my LAP without any charges?
Some lenders allow zero prepayment charges, but confirm the terms before signing.
5. Is there any tax benefit on LAP?
LAP does not offer tax benefits, except in cases where funds are used for business or home renovation.
Apply for a Loan Against Property Today!
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📞 Need assistance? Contact us for expert guidance on the best LAP options.