What is Loan
Against Property

A Loan Against Property (LAP) is a secured loan, wherein you can mortgage your residential, commercial, or special-use property to get immediate funds for various purposes, ranging from business expenditure to personal needs. In LAP, the property you own, which has a clear title, is kept with the bank as collateral or security, helping you get financial assistance in the form of a secured loan against property.Whether you are looking for a secured loan against a house or a business loan against property, LAP offers you the flexibility to access substantial funds based on the value of your property.

Features of Loan Against Property

Lower rates

Loan against property, being a secured loan, carries a lower rate of interest than an unsecured loan

Higher borrowing limits

Due to its longer repayment tenure, an individual can opt for a higher amount of loan with the same EMI than an unsecured loan

Longer repayment terms

LAP is normally available for as long as 15 years. Thus the burden of cash outflow per month on the individual is lower, enabling him to manage his cashflow cycle better.

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against property now.

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Benefits of Loan Against Property

Lower interest rate

Since the loan is secured by collateral, typically a house or commercial property, the interest rates on a secured loan against property are generally lower than unsecured loa

Lower to Nil Prepayment Charges

You can close your LAP by making prepayments. Many lenders offer Loan Against Residential Property without or with minimal prepayment penalties.

Easy to get

Being a secured loan, banks and NBFCs are more inclined to approve such loans, making business loans against property or residential property easier to obtain.

Longer tenure

These loans are generally available for longer tenure going up to 15 years while the tenure in case of personal loan is generally up to 7 years.

Lower EMI

There is an inverse relationship between tenure and EMI. Longer the tenure lower will be the EMI and vice versa. As these are available for a longer tenure, these become suitable for people who can’t afford to pay higher EMIs. However, it is always advisable that a person should take a loan for the shortest tenure as the interest burden will be lower in the case of short tenure loan.

Tap into your property's equity. Opt for a loan against
property for financial flexibility.

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Eligibility criteria for Loan Against Property

Income of the applicant

The bank will assess whether your income is sufficient to pay the monthly EMI , net of all other expenses and financial obligations, if any

01
Age of the applicant

Age of applicant is important because the bank expects you to be paying your EMI within your working age, out of your monthly earnings. Hence the tenure of the loan is limited to the expected retirement age.

02
Value of property

A bank can recover its financed amount by sale of the property in question, if there is default in repayment of the loan. Hence, banks normally provide finance only upto 70-75% of the value of property being mortgaged, so that appropriate buffer is maintained to provide for price fluctuation and depreciation of the property over the period of the loan.

03
Existing Liabilities (if any)

If the applicant has any existing loans or any other financial obligations on a monthly basis, then the loan amount sanctioned reduces, because the EMI paying capacity on the new loan is reduced by the existing liability amount.

04

Dealplexus offers you

Maximum loan amount

You may be looking to get maximum loan amount irrespective of the rate of interest

Lowest Interest rate

Your first choice may be to take home loan from a Bank which offers the lowest interest rate

Minimum processing fee

At times you may want to choose a financing institution with minimum or Nil processing fees

Quick disbursement

You may be looking to get a quick disbursal of loan due to some urgency

Long repayment tenure

Some want to maximise the loan amount or want to pay smaller amount of EMIs per month. In that case, the first choice is the bank or NBFC which is offering the highest loan tenure.

Online process

You may want to choose a financing partner who offers an online application facility to minimise the paperwork and time for processing.

Documents Required for Loan Against Property

Typically the following documents are required to be submitted to the lending institution while applying for a loan against property:

  • Proof of identity:This should be an official document which contains your name and photograph. Could be either your driving license, passport, voter’s ID, PAN card, Employee ID (if the company is registered), etc.
  • Proof of residenceA document that verifies your residence address could be either your phone / internet bill, rental agreement, bank account statement, gas bill, electricity bill etc.
  • Bank statements of last 6 months
  • Salary Slips of last 3 months (for salaried individual) and financial statements (i.e Profit and Loss a/c and Balance Sheet (for business applicants) for last 3 years
  • Income proof:This can be your ITR/Form 16 of last 3 years
  • Property Documents

For more detail on documents required or the process, you may connect with our support team at : support@dealplexus.com

Frequently Asked Questions

What is a Loan against property?

A Loan against Property (LAP) is a type of secured loan where the borrower pledges residential or commercial property as collateral to avail funds. It’s commonly used for personal or business needs.

Where can I get a loan against my property?

You can get a loan against property from banks, NBFCs, credit unions, and housing finance companies. The loan approval depends on your creditworthiness and the current market value of the property.

What is the interest rate for loan against property?

Interest rates for LAP in India generally range from 8% to 15% per annum. The exact rate depends on your credit score, loan amount, tenure, and the property's market value.

Which Banks offer the best rates on LAP?

Top banks and institutions offering competitive LAP rates include:

  1. PNB Housing Finance
  2. HDFC Bank
  3. ICICI Bank
  4. Axis Bank
  5. IDFC First Bank

Rates range from 8.25% to 12.00%, depending on loan tenure, borrower profile, and property value.

Can I lend money against property?

Yes, you can lend or borrow money using property as security. It’s a form of secured lending where the borrower pledges their owned residential or commercial property as collateral.

Can I get a loan on 100% value of my property?

Typically, lenders do not provide 100% of the property's value as a loan. Most institutions offer a Loan-to-Value (LTV) ratio of 60% to 75%. A 100% LTV is rare and comes with strict eligibility requirements due to high risk.

What is the document process for LAP?

The documentation process for LAP typically involves submitting property papers, identity and address proofs, income proofs like salary slips or ITRs, and bank statements. The lender evaluates both the property and your credit profile before loan sanction. The example in your question seems to refer to project bids (not LAP), so you may want to revise that portion if it doesn't apply.

What is the maximum term for which I can avail a loan against property?

The maximum loan tenure for a Loan Against Property usually ranges between 10 to 15 years, depending on the lender's policy, borrower's profile, and property type.

Do I get tax benefits on a loan against property?

Tax benefits on LAP depend on the end-use of the loan. If used for business purposes, interest paid can be claimed under Section 37 of the Income Tax Act. If the property is rented, interest may also be claimed under Section 24. However, if the loan is used for personal expenses, tax benefits are not applicable.

Can I close my loan against property before tenure?

Yes, you can pre-close your LAP before the agreed tenure. However, check your loan agreement for any prepayment charges or conditions. Some lenders allow early closure without penalties, especially for floating-rate loans.

Can salaried employees also get Loan against property?

Yes, salaried employees who own residential or commercial property are eligible for LAP. The loan is provided against the mortgage of the property, and eligibility depends on income, job stability, and property valuation.

Can anyone help me with Document process of Home Loan?

Yes, Dealplexus or similar financial service platforms can guide you through the home loan documentation process, including preparation and verification of required documents, submission, and loan application follow-up.