Loan Against Property Eligibility Criteria

Loan against Property

Looking for a solution to meet your immediate financial exigency? Well, fret not, now you can use your commercial or residential property to apply for a loan. Yes, this defines LAP, i.e. loan against property. As the name suggests, it is essentially a loan that any borrower can avail by mortgaging their property to the lender. If you are a property owner, you can pledge your residential or commercial unit to meet your personal or business financial needs. A borrower can borrow the amount on the basis of the market value of his or her property. Depending on the size, coordinates, and typology of borrower’s property, a lender approves the loan amount.

Factors that determine the eligibility for Loan against Property

A borrower’s current financial health information, repayment ability, the value of your property is the most commonly assessed. In addition to this, lenders also assess your current monthly income, savings, debt, the value of the property mortgaged, your past repayment record for credit cards, loans, etc.

How much loan can I get?

LAP comes under the category of secured loan, i.e. a form of guarantee of repayment using his or her property as a security to the lender. The loan amount you get all depends on the market value of borrower’s property. Usually, all lending institutions sanction loan amount of, approximately 60% to 65% on the basis of the market value of your property.  An applicant can borrow a large amount against his or her property as the worth of a property is quite high.

Loan against Property (LAP) Rate of Interest

How much rate of interest on loan against property a borrower can get, depends on several factors, and it depends on a lender to lender. Usually, the interest rate for LAP ranges from 12% to 16%.


The tenure of Loan against property depends upon an evaluation of current market trends, typography, age, and several other factors. Usually, a lender lends the loan against the property for up to 15 years.

Purpose of LAP

A borrower can use the sanctioned loan amount for several purposes. It is a fantastic way to arrange the funds in a short span of duration, and especially when you want to meet any type of high expenses. A borrower then can use the loan amount for setting up a business, wedding, studying abroad, or to purchase a land/commercial property, any medical emergency, travel, etc.

Type of Properties

So, for what type of properties a borrower can take a loan against? Well, you can apply for a loan against self-owned residential property, self-owned but rented commercial property, or self-owned piece of land.

Documentation for LAP

In order to avail loan against property, all your property documents should be in order. Keep in mind that your property documents are very important as it will help you to get a loan against your property. LAP can be availed by both salaried class and self-employed professionals, and the general set of documents are-

For Salaried Individuals

  • Residential Proof: Ration Card, Utility Bills (telephone or electricity bills), Voter ID card.
  • Identity Proof: – Driving License, Passport, Aadhar Card, etc.
  • Form 16 for the past 2 years
  • Employer’s card
  • Bank statement for the past 6 months that reflects your monthly income being credited
  • Copies of all property related documents to be pledged for the loan.

For Self Employed

  • A certified financial statement of the past 3 years
  • Residential Proof: copy of anyone (Ration Card, Utility Bills, Voter ID)
  • Identity Proof: such as Driver License, passport, Aadhar Card.