Loan Against Property
Document Criteria
A Loan Against Property (LAP) is a secured loan that allows you to leverage the market value of your property to fulfill your financial requirements. Whether you need funds for business expansion, education expenses, medical emergencies, or any other purpose, LAP offers a convenient financing option.
Features
- Secured financing: Real estate loans are secured loans where the real estate (commercial, residential or industrial property) serves as collateral. This lowers the risk for the lender and allows borrowers access to higher loan amounts at relatively lower interest rates compared to unsecured loans.
- Flexible loan amount: Borrowers can avail loans for a wide range of properties including commercial complexes, residential houses, apartments, industrial units, land, etc. The loan amount approved is based on the market value of the property, with lenders typically offering up to a certain percentage (usually 50% to 70%) of the property value.
- Multi-purpose use: The funds obtained through a property loan can be used for various purposes such as business expansion, debt consolidation, education expenses, medical emergencies, home renovation, marriage expenses, etc. Borrowers have the flexibility to utilize the funds as per their needs.
- Longer tenure: A real estate loan offers longer repayment periods as compared to other types of loans, ranging from 5 to 20 years. This allows borrowers to repay the loan amount in smaller installments over a longer period of time, making repayment more manageable and affordable.
- Favourable interest rates: Because these loans are secured by collateral, lenders offer competitive interest rates, making them an attractive financing option for property owners. Interest rates can be fixed or variable, depending on the lender's guidelines and market conditions.
- Fast processing: thanks to streamlined documentation and minimal eligibility requirements, real estate loan applications are processed quickly by lenders. This ensures faster approval and disbursement of funds, allowing borrowers to meet their financial needs without delay.
Eligibility Criteria
| Occupation | Age | Income | Employment | Credit Score |
|---|---|---|---|---|
|
Salaried |
21 years to 58 years |
Minimum Rs. 8,000 per month |
Minimum 2 to 3 years of Experience |
650+ |
|
Self-Employed (SENP & SEP) |
25 years to 65 years |
Minimum Rs. 2,00,000 per year |
Minimum 3 years Business Vintage |
700+ |
- Ownership of commercial, residential, or industrial property
- Minimum and maximum age criteria as per lender's policy
- Stable income source (salaried, self-employed, or business income)
- Good credit history and repayment capacity
- Property valuation as per lender's standards
- Submission of required documents such as identity proof, address proof, income proof, property documents, etc.
Additional Documentation
| Income Proof | |
|---|---|
|
Salaried |
1. Latest 3 month’s salary slips. 2. Latest 2 years Form16. 3. Latest 6 month’s salary account Bank statement required. 4. Copy of increment letter (If applicable) 5. If current employment is less than 1 year then total 3 years work exp. Proof ‘required – Latest employment Appointment Letter/ CTC) 6. Copy of repayment track record / statement of account is required if any existing loan. |
|
Self-Employed (SENP/SENP) |
1. Latest 2 years Income Tax Returns along with 2. Copy of Computation of Income, Profit and Loss A/C, Balance Sheet & Audit Report attested by C.A 3. Company profile / Website 4. Updated 1 year Current A/C & Saving A/C Bank statement as mentioned in Balance Sheet. 5. Partnership Deed (In case of Partnership company) 6. MOA / AOA (In case of Pvt Ltd company) 7. TDS certificate (If applicable) 8. Copy of Degree Certificate in case of professional. 9. Shop Establishment License / Gumasta /Udyam Registration / GST / VAT for Business proof. 10. Copy of repayment track record / statement of account is required if any existing loan. |
Additional requirements with Application Form
- Processing fees cheque in favour of Banks/NBFC’s.
- Additional documents as per the Credit of Bank.
Documents required for Legal, Search & Valuation
Builder Purchase: - For individual legal / search & technical AND for APF
- Allotment letter along with draft agreement OR copy of registered purchase agreement.
- Copy of registered development agreement.
- Copy of power of attorney.
- Copy of ULC / NA order & IOD.
- Copy of latest title certificate along with search report.
- Approved plan / construction commencement certificate.
- Certificate of Occupancy (if any)
- Copy of extract 7/12 OR Property card.
- Additional documents as per legal requirements.
- Copy of registered tripartite agreement and registered lease agreement (in case of Navi Mumbai Property)
Resale Case : - For individual legal / search & technical
1. Copy of Previous chain of agreement/s along with stamp-duty receipt, registration receipt & Index II.
2. Copy of Current Draft Agreement.
3. Copy of Share Certificate (front and back).
4. Copy of Occupation certificate.
5. Copy of Society Registration Certificate.
6. Copy of latest property tax paid bill.
7. Copy of latest electricity bill and maintenance bill.
8. Additional documents as per the legal requirement.
Documents required for disbursement process:-
- Original Current agreement along with the stamp duty, registration receipt and Index II.
- Original Chain of agreement along with stamp duty and registration receipt (If Resale case)
- Original own contribution receipt together with the bank statement.
- Original share certificate. (In case of resale)
- Original NOC from Builder OR Society in Axis Bank format.
- Original demand letter from the developer.
- Letter / Mail from customer in favour of – Seller / Builder / Bank Name with Account No.
- Accepted Sanction Letter, all pages must be signed by all applicants.
- The loan agreement is to be signed by the applicant and co-applicant in BLACK INK only.
- In case of eNACH: 1 Pre EMI cheque, 1 security cheque, 1 cancelled
- Property insurance cheque along with form and calculation
- Life Insurance (completed form and calculation sheet required)
- Applicable Equitable Mortgage charges to be Banked & cleared prior to disbursement. (0.3% of the loan amount) fav. Bank/NBFC's
- Applicable Balance Processing fees & CERSAI charges of Rs. 118/- to be paid before disbursement. fav. Bank/NBFC's
- Additional documents are required according to legal requirements OR bank credit.
- PSD terms and conditions (if any – see 2nd page of sanction letter)
- OCR, NOC to verify (RCU)
- TDS undertaking
FAQs:
LAP is a secured loan where you pledge your property as collateral to borrow funds from a lender.
Residential, commercial, and industrial properties can be used as collateral for LAP.
Typically up to 50%-70% of the property’s market value.
Usually 5 to 20 years, depending on the lender and borrower’s preference.
Business expansion, debt consolidation, education, medical expenses, home renovation, etc.
Lower than unsecured loans; varies based on creditworthiness, market conditions, and lender’s policies.
ID proof, address proof, income proof, property documents, bank statements, etc.
Yes, usually allowed with or without prepayment charges depending on the lender.
The lender can seize and sell the property to recover the outstanding amount.
Varies; some lenders offer quick approval and disbursal, while others may take longer.
