Loan against Property is a secured type of financial product offered by banks and other lending institutions for multi-purpose uses while pledging your owned property as security. The property titled in your name is to be pledged as collateral for which you can obtain funds for up to 75-80% of the current market price of the property. One of the major benefits associated with this service is that you can continue using your pledged property while repaying the loan.

Loan seekers who plan to “APPLY FOR LOAN AGAINST PROPERTY“ might have some queries in their minds about this financial service which we have tried to answer in this blog post to clear all your doubts.

What is the difference between Home Loan and Loan against Property?
However, loan for purchasing a home is also a secured loan provided by the lender to buy a residential property but Loan against Property is a multi-purpose financial remedy which is availed by pledging your property to get the funds for anything varying from funding your children’s wedding to the expansion of your business organization.

What are the merits of Loan against Property?
A mortgage loan can be availed at lower rate of interest than any unsecured loan. Moreover, loan money available with LAP is much higher than any other loan product and can be availed for longer tenure. It is often true that interest rate and tenure of loan available to you depends upon several factors such as monthly earnings, loan amount, property evaluation etc.

Besides that, lenders also charge a low processing fee on the funds disbursed against residential or commercial property as compared to other loans.

What is the set of criteria for LAP?
The eligibility criteria for LAP will vary from lender to lender but there is a basic set of criteria. The funds can be availed by any salaried or self-employed person and one can also add co-applicant as in siblings, friends or partnership firms. The main loan applicant must be at 21 years of age and should be an India resident. Also, loan seeker must earn a regular income that ensures your repayment capacity to repay your loan.

What kind of properties can be pledged?
It is a common myth that a LAP can only be availed in lieu of residential property but many lenders offer loans on myriad of properties, such as commercial or residential property. Even a vacant land that has not been built yet can also be pledged as collateral to get the funds. Depending upon a specific lender, a loan applicant can access about 75-80% of the market price of property when they “APPLY FOR LOAN AGAINST PROPERTY ONLINE“ or offline.

Which documentation is required to apply for LAP?
The paperwork also varies from lender to lender and depends upon loan applicant whether he/she is salaried or self-employed. Usually, one needs to submit their Identity and residential proof, salary slips as well as income tax return slips etc. apart from this, lender might ask for credit history and bank balance sheets amongst documents. Keep all these required papers in hand to get instant approval on Loan against Property.