Overview

A Loan Against Property (LAP), also known as a mortgage loan, is a secured loan where individuals can use their owned property as collateral. This property can be residential or commercial, and the loan amount is based on the property's market value and the borrower's eligibility.

Key Features of a Loan Against Property

• Secured Nature: It is a secured loan, meaning the borrower pledges their property (either residential or commercial) as collateral for the loan. This provides a level of security for the lender.
• Loan Amount: The loan amount is determined by the market value of the property offered as collateral. Typically, lenders may provide a loan amount ranging from 40% to 70% of the property's value.
• Purpose: Borrowers can use the loan against property for various purposes, including business expansion, debt consolidation, education expenses, medical emergencies, or other personal needs.
• Interest Rates: Interest rates for LAP can be either fixed or variable. They are generally lower than unsecured loans since the loan is backed by collateral.
• Repayment Terms: The repayment terms for a Loan Against Property can range from a few years to a couple of decades, depending on the lender's policies and the borrower's preferences. The borrower repays the loan amount in regular instalments.
• Credit Check: While the property serves as collateral, lenders still conduct a credit check to assess the borrower's creditworthiness. A good credit score may lead to more favourable loan terms.
• Ownership Continues: While the property is used as collateral, the borrower retains ownership and possession of the property during the loan tenure. If the borrower fails to repay, the lender may have the right to sell the property to recover the outstanding amount.
• Versatility: Loan Against Property offers versatility in terms of utilization. Borrowers can use the funds for a wide range of purposes, making it a flexible financing option.

Benefits of our Loan Against Property

• Secured Loan: The loan is secured against the value of your property. The property acts as collateral, reducing the risk for the lender. This generally leads to lower interest rates compared to unsecured loans.
• Loan Amount: The loan amount is determined based on the value of the property you pledge. Generally, you can get a higher loan amount compared to personal loans or other unsecured loans.
• Flexible Tenure: The tenure (repayment period) for a Loan Against Property is usually longer compared to other types of loans, often ranging from 5 to 20 years. This allows for lower monthly instalments.
• Multipurpose: The loan amount can be used for a wide range of purposes, giving you the flexibility to address various financial needs without any restrictions.
• Improves Credit Scores: Successfully repaying a Loan Against Property can positively impact your credit score, as it demonstrates responsible borrowing behaviour.

Eligibility Criteria for Loan Against Property

• Nationality: You need to be a Citizen of India with documents to prove your claim.
• Occupation and Income: Your lender will require you to furnish details regarding your occupation and income to prove your professional and financial stability to determine your creditworthiness.
• Credit History: Your three-digit Credit Score, indicative of your track record in respect of repayment of loans, and other forms of credit will be a deciding factor to prove your eligibility for a LAP.
• Banking Relationship: Should you have a healthy relationship with your lender, you will not be disapproved for a LAP. Additionally, your lender will offer you better terms and conditions in respect of loan value, interest rates, period of the loan, hidden charges, and processing fees.
• Market Value of Property: Your lender retains the right to decide the loan amount and terms and conditions of your mortgage loan based on the market value of your collateral property. Besides, the market value of the mortgaged property must be higher than the loan amount calculated on the current value of your property.
• Title of Property: Your lender will require you to be the current existent owner of the property, and in case of a co-application, you will require to prove multiple ownership clear title. Besides, the property must not be mortgaged with any other financial institution.

Documents Required to Apply for Loan Against Property

• Proof of identity/residence
• Proof of income
• Property-related documents
• Proof of Business (for self-employed)
• Account statement for the last 6 months