Loan against property
A loan against property (LAP) lets you borrow against a house, shop, office or land you already own, for almost any legitimate purpose — a business need, education, medical costs, or consolidating costlier loans. The rate is lower than a personal loan because the property is security; the property is at risk if you do not repay.
We explain what lenders usually ask for and help you get your papers in order — the first call is free.
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EMI calculator (estimate only)
Enter the amount, the yearly interest rate and the number of months. The estimate uses the reducing-balance method that most banks use for term loans.
Estimate only. Your lender sets the actual rate, EMI and charges.
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Details
What lenders usually check
- Clear, marketable title to the property, and whether it is residential, commercial or land.
- The property’s market value and condition; lenders fund a share of it.
- Your income and cash flow — salary or business — and existing EMIs.
- Credit report and score.
- The stated purpose of the loan.
Documents to keep ready
- Identity and address proof of all owners and applicants.
- Complete title documents, previous sale deeds, approved plan, tax receipts and encumbrance certificate.
- Income proof: salary slips and Form 16, or ITR, financial statements and GST returns for businesses.
- Bank statements for the last six to twelve months.
- Any existing loan statement on the property.
Repayment
Monthly EMIs, typically over 5 to 15 years. Longer than a personal loan, so the EMI is lower but the total interest higher.
Interest and charges
Usually floating. Processing fee, legal and valuation charges are higher than for unsecured loans because the property must be checked and valued. Ask about prepayment and foreclosure charges — they can apply to LAP even where they do not to home loans.
Security or own contribution
The property is mortgaged. Lenders fund a share of the market value, usually less than for a home loan, and less again for commercial property or land. All co-owners must sign.
How to prepare
Collect the full chain of title documents. Clear any small dues or disputes on the property. Be clear about the purpose — lenders will ask. Compare the total cost against a top-up on an existing home loan, if you have one.
Questions about loan against property
What can I use the loan for?
Most personal and business purposes. Lenders generally exclude speculation and, in some cases, buying another property.
How much can I borrow?
A share of the property’s market value, decided by the lender’s valuation, and limited by your ability to repay.
Can I mortgage a property that already has a home loan?
Sometimes, as a top-up or a second charge with the first lender’s consent. Ask both lenders.
Does the property need to be in my name?
Yes, or in the name of a co-applicant who signs the mortgage. All owners must agree.
Can I take LAP on land?
Some lenders lend against non-agricultural land; agricultural land is usually excluded.
How long does sanction take?
Longer than an unsecured loan — title checks and valuation can take weeks.
What if I cannot repay?
Late charges and credit reporting first; after 90 days overdue the account is an NPA, and the lender can begin recovery against the property after due notice under the SARFAESI Act.
What we do here: we explain what lenders usually ask for and help you get your documents in order. We do not lend, arrange loans or take commission. The first call is free. See what we do.
