Loan Against Property

LOAN AGAINST PROPERTY

Best DSA in Delhi NCR for Loan Against Property

With a loan against property (LAP), you can use the money associated with the asset to pay for any bills you may have. Although the property’s valuation determines the LAP amount granted, you are free to choose how to use the money. Although it is collateral for the loan, you are still able to use your property normally.

LAP is, in essence, a secured loan offered by banks and other financial organizations in return for a pledge of real estate. The land, home, or business property of the applicant may be the pledged asset. Until the borrower pays back the entire debt, the property remains collateral owned by the credit provider.

However, the sanctioned funds are relatively higher, as the borrower can acquire a loan against property for up to 70 percent of the property costs. The loan against property interest rates are also lower than other loans, and its repayment terms are flexible.

Loan Against Property: Features and Benefits:

Following are the key features and benefits of a loan against property:

1. Up to 70% of the property’s market value is available as a loan.
2. The loan against property rates is attractive because of its flexible repayment terms.
3. Makes simple repayments possible with little monthly installments.
4. The applicant’s age must be between 21 years to 65 years old.
5. Flexible repayment tenure up to 20 years.
6. LAP available on plots, residential property and commercial property.
7. Lower interest rates, starting from 11 percent.
8. A loan amount of INR 5 lacs to INR 30 crores can be offered based on the property’s market value.
9. Availability of balance transfer on the existing loan.
10. Minimal prepayment penalties may vary from one bank to another.

Loan Against Property Eligibility Criteria

You must comply with the lender’s loan against property eligibility requirements in order to obtain an LAP as easily as possible. To find out if you qualify for a loan against property, you can also rely on an eligibility calculator. Nevertheless, the loan applicant or another family member’s name must be on the property. 

Here’s what you need to be prepared with:

List of Documents Required for a Loan Against Property:

A loan against property (LAP) is a secured loan where the borrower pledges their property as collateral to the lender. The documentation process is crucial to verify the borrower’s identity, income, and the legality of the property. Here’s a comprehensive list of documents typically required for a loan against property:

1. Identity Proof (Any one of the following)

   – Aadhaar Card

   – PAN Card

   – Passport

   – Voter ID Card

   – Driving License

   – Government-issued ID card (for government employees)

2. Address Proof (Any one of the following)

   – Aadhaar Card

   – Passport

   – Voter ID Card

   – Utility bills (Electricity bill, Water bill, Gas bill)

   – Ration Card

   – Rent agreement with registered deed

   – Property tax receipt

   – Driving License

3. Age Proof (Any one of the following)

   – Birth Certificate

   – Passport

   – School Leaving Certificate

   – PAN Card

   – Aadhaar Card

   – Voter ID Card

4. Income Proof

   – For Salaried Individuals:

     – Last 3 to 6 months’ salary slips

     – Latest Form 16 or Income Tax Return (ITR) of the last 2 years

     – Bank statements of the last 6 months (salary account)

     – Employment certificate from the employer

   – For Self-Employed Individuals:

     – Income Tax Returns of the last 2 to 3 years with computation of income

     – Profit and Loss (P&L) statement and Balance Sheet of the business, audited by a CA

     – Bank statements of the last 6 to 12 months (business account)

     – Business registration certificate or trade license

     – Proof of business existence (for the last 3 years)

     – Office address proof (rent agreement, utility bill, or ownership documents)

5. Property Documents

   – Property Title Deed: Legal document that proves ownership of the property being pledged.

   – Sale Deed: Original sale deed of the property.

   – Latest Property Tax Receipts: Proof that all property taxes are up to date.

   – Encumbrance Certificate: Confirms that the property is free from any legal dues or liabilities.

   – Approved Building Plan: Copy of the approved building plan from the local municipal authority.

   – Possession Certificate: For under-construction properties, issued by the builder upon completion.

   – NOC from Builder or Society: A No Objection Certificate from the builder or housing society confirming no dues are pending.

   – Lease Deed/Rent Agreement: If the property is leased out, a copy of the lease deed or rent agreement.

   – Occupancy Certificate: Issued by the local municipal authority, confirming the property is ready for occupation.

6. Employment Proof

   – For Salaried Individuals:

     – Employment Offer Letter/Appointment Letter

     – Employment Contract

     – ID card issued by the employer

   – For Self-Employed Individuals:

     – Professional degree certificate (for professionals like doctors, architects)

     – Business address proof (utility bills, rent agreement)

7. Photographs

   – Recent passport-sized photographs (2 to 4 copies)

8. Existing Loan Details (if any)

   – Details of any existing loans or liabilities, including loan statements, outstanding balance, and repayment history Sanctioned Letters.