Taking a loan can be a long and tedious process that depends on the type and amount of the loan.
For example, you can get a personal loan quickly, but the interest rates might be a bit on the higher side. A home loan may take longer and require more thorough documentation. There is also a restriction on how you can spend the money.
In simple words, taking a loan against property is referred to as a mortgage. This type of loan is secured by collateral i.e., the security against the loan.
By applying for a loan against a property one might be able to get some money without depositing any property in the lender’s hand.
The concept of mortgage can be explained in two ways selling of property or deposit of money for a fixed period.
A loan against property (LAP) is a good option with no restriction on how you spend the money. The loan approval process is quick, and the interest rates are reasonable compared with other loans.
How does a LAP benefit you?
LAP Benefits:
● You can get a loan against the property on residential, commercial, and industrial properties. A LAP can also be granted on a residential plot.
● There is no restriction on whether the residential and commercial properties are vacant, self-occupied, or rented.
● You can expect a loan of 75% to 90% of the market value of your property.
● There is no restriction on the end-use of the loan amount.
Eligibility Criteria For A Loan Against Property
There are different sets of documents required for a loan against your property. It depends on whether you are a salaried and self-employed individual.
The LAP is offered based on the borrower’s income and capacity to pay back the loan. To ascertain the ability of the borrower to return the money with interest, the bank or the lender asks for relevant documents.
Here are the documents you will need for a LAP:
| Eligibility Criteria | Salaried Person | Self-Employed |
| Age | 28-60 years | 25-70 years |
| Employment status | Should be working with public, private, multinational companies | Should be self-employed and have a steady source of income |
| Residential status | Indian | Should belong to one of the cities mentioned in the **Self-employment eligibility |
| Loan term | 2-20 years | Flexible up to 18 years |
| Maximum loan amount | Rs 1 crore | Rs 3.5 crore |
Required Documents For Salaried People:
● Copy of most recent salary slips
● Bank statements of previous 3 months
● Copy of Aadhar Card or Pan Card
● Address Proof
● Income Tax Returns
● Copy of documents against which loan is sought
● Applicant should be between 28 and 60 years
● Upper age will be determined based on the time of loan maturity.
Criteria For Self-employed People:
Self-employed individuals seeking a loan against property should be residents of a select group of cities. **These cities are Delhi, Mumbai, Kolkata, Pune, Thane, Bangalore, Chennai, Ahmadabad, Surat, Vizag, Cochin, Udaipur, Aurangabad, and Indore. Documents required include:
● Bank statements of the last 6 months
● Copy of the Aadhar card/Pan card
● Address Proof
● Copy of documents against which loan is sought
● Proof of a steady source of income
● Applicant should be between 25 and 70 years
● Upper age will be decided based on the time of loan maturity.
Using Co-applicants:
You can use a co-applicant in your loan application. With the income of a co-applicant pooled into your loan application, chances of loan approval become higher. Following individuals can become co-applicants. They will have to produce relevant documents required for a loan against your property.
● Spouse
● Brother
● Either of the parents
● Parent and unmarried daughters
How soon can you expect the loan?
If you fulfill all the eligibility criteria and make the application with all relevant documents, you can expect loan approval within 72 hours.
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