A secured method to obtain finances for various purposes, Loan against Property (LAP) can be availed by individuals and businesses. As the name suggests, in this type of loan, you can acquire funds by mortgaging your property. The property being used as collateral can either be self-occupied, commercial property or even a piece of land. Based on the value of the property, the lender (financial institute or bank) will ascertain the percentage of the loan that you are eligible for. This will be followed by the payment terms and the set interest rate. Here, you have the freedom to choose the payment term (short or long tenure) as per your financial situation.
Unlike home loans, wherein the bank/financial institute takes full ownership of the house until the entire loan amount is paid off, in LAP, the borrower retains the ownership of the property at all times. So, in the event, a borrower is unable to repay the loan amount, he/she can sell the property and then repay the loan with whatever interest applicable.
Eligibility For Loan Against Property (LAP)
- The Applicant should be an India citizen.
- The Applicant should be at least 24 years of age.
- The Applicant should be residing at the current place of residence for a minimum of 3 years.
- Self-employed applicants should be in the business for at least 3 years.
- Salaried employees should have at least 3 years of work experience with the current employer.
Loan Against Property for Salaried Individuals (Documents Required)
- Proof of identity (PAN Card) of residence Applicant & Co-Applicant.
- Proof of address (Aadhaar Card or Passport) of residence Applicant & Co-Applicant.
- Proof of age (Birth Certificate, School leaving certificate, Aadhaar Card or Passport) of residence Applicant & Co-Applicant.
- Latest salary slips.
- Form-16 issued by the current employer.
- Bank statements for the last 3months (where the salary is credited).
- Photocopy of property documents to be mortgaged with OC and CC.
- Photocopy of existing loans
- Photo of Applicant & Co-Applicant.
Loan Against Property for Self-employed Professionals (Documents Required)
- Proof of identity (PAN Card) of residence Applicant & Co-Applicant.
- Proof of address (Aadhaar Card or Passport) of residence Applicant & Co-Applicant.
- Proof of age (Birth Certificate, School leaving certificate, Aadhaar Card or Passport) of residence Applicant & Co-Applicant.
- Photocopy of property documents to be mortgaged with OC and CC.
- Photocopy of existing loans.
- Photo of Applicant & Co-Applicant
- IT Returns of three years preceding the one in which loan is applied for.
Loan Against Property for Self-employed Businesspersons (Documents Required)
- Proof of identity (PAN Card) of residence Applicant & Co-Applicant.
- Proof of address (Aadhaar Card or Passport) of residence Applicant & Co-Applicant.
- Proof of age (Birth Certificate, School leaving certificate, Aadhaar Card or Passport) of residence Applicant & Co-Applicant.
- Proof of the existence of business.
- Detailed business profileincluding bank statements of the main account and other accounts.
- In case of a partnership firm, you would need to submit a partnership deed and partnership authority letter.
- Audited ITR Financials for the last 3 years
- In case of private/public limited company, you would need to submit; list of directors, AOA, MOA, Form 32, shareholding patterns, company PAN card, annual reports, and COR.
- Photo of Applicant & Co-Applicant.