Loan Against Property

A Loan against Property or LAP is a secured loan that is sanctioned against a property (land, house or commercial premises) which is pledged as security. It is an ideal option for people with bad credit scores as it offers large sums of money at a low interest rate.

Eligibility for Loan Against Property

Individuals can avail a loan against property to meet their monetary requirements such as business expansion, child education, home renovation, child wedding and more. This is because it offers a high principal amount, lower rates of interest and convenient repayment tenure.

Unlike personal loans, you can avail a loan against your property only when it’s legal. This is because a lender will not offer this type of loan to anyone who owns an illegal property or a property that has no title or other government approvals.

What documents do I need to apply for a Loan Against Property?

The borrower must submit the following documents while applying for a loan against property: Registration Certificate, Sales Deed, Property Tax Receipts and a valid PAN Card. They must also provide proof of their income and repaying capacity.

Repayment of Loan Against Property

The loan against property is repaid in equal monthly installments or EMIs. During the initial stage, EMIs mostly include interest and are gradually reduced over a period of time. During the later stages, EMIs mostly consist of the principal loan amount.

When you apply for a loan against property, you must consider the market value of your property. This will help you make an informed decision and avoid paying high interest rates.