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Loan against Property

With regards to financing the advanced education of your kid or financing the business start up or extension of existing business or getting the assets for your ward’s wedding, a solitary question flies up in everybody’s mind-where might he or she get the assets from? In any case, there are numerous approaches to get the required cash.

Individual Loan Vs Loan against Property

Loaning the assets from companions, family or relatives is the one alternative. Getting a credit from bank is another exit plan. As you more likely than not realized that cash ruins the connection so it ought to be avoidable. On the off chance that you need to end any connection simply loan some cash from them and the connection will end itself. There is another better choice that won’t demolish your connection and you will satisfy your necessities moreover. You can either profit individual credit or advance against property to meet your money related prerequisites. Individual credit is not recommendable as it is accessible at high loan fee though LAP is accessible at lower financing cost. In addition, you will get the higher advance sum.

Loan against Property?

As the name suggests it is a loan that you can avail by keeping your property as collateral. Loan is disbursed as certain percent of market value of property. Usually the loan amount lies between 40 percent and 60 percent. You can take LAP for the following purposes:

  • Start up of a business
  • Expansion of existing business
  • Sending your ward for higher education in abroad
  • Wedding of your children
  • Financing your dream vacation
  • Funds for medical treatments

Generally you can avail LAP against the self occupied or rented property of yours. The property can either be a house or a piece of land.

Eligibility Criteria

Loan eligibility is different for different banks. However, some of the common factors have been listed here-

  • Income, savings and debt obligations
  • Total cost or market value of the property to be mortgaged
  • Repayment record of existing or previously paid loans and credit cards etc.


It is one of the most important factors where you need to pay attention and be watchful. Documents required vary from lender to lender. A list of general documents is mentioned here-

  • Application form with passport size photographs
  • Identity proof and residence proof
  • Latest salary slips
  • Bank statements of last 6 months
  • Form 16
  • Processing fee cheque