Loan against property is a type of advance availed by mortgaging any commercial or residential building or a land as collateral with the financer. This is a secured loan and has no restriction on usage of the funds.
The funds can be utilised on various occasions like procuring real-estate property, financing higher education, business expansion, covering wedding expenses, and many more.
Several financial institutions in India offer this type of credit to eligible borrowers. Moreover, the loan against property application process is easy and time saving. You can apply for the credit online and submit minimum documents to receive approval for an LAP.
Borrowers should also check whether they meet the minimum eligibility criteria or not before applying for an advance. Here is a complete stepwise guideline on how to apply for an LAP.
Know the types of property that can be mortgaged
A property loan can be availed by mortgaging the following types of assets:
- Self-occupied residential buildings like houses, flats, apartments, etc.
- Rented houses.
- Commercial buildings like offices, shops, malls, etc.
- A plot of land owned by the applicant.
Select a lender
There are several Indian lenders that offer loan against property. However, an applicant should carefully go through the available options and select a financial institution that best meets their requirements and repayment capability.
Experts advise looking for fees and charges like the interest rate, processing fee, foreclosure charges, etc. before you apply for a mortgage loan.
Check the eligibility requirements
Every lender imposes some eligibility requirement for their customers. You can check your eligibility using various online eligibility calculators or visit the lender’s website to learn whether you qualify for a mortgage loan by meeting the eligibility requirements.
# For salaried individuals: You can avail a loan of up to Rs. 1 Crore against a maximum tenor of 2 and 20 years if you are a salaried individual.
- Your age should be between 33 and 58 years.
- You must be employed in an MNC, private or Public Sector Company.
- You must be residing in India.
# For self-employed individuals: You can avail a loan up to Rs. 3.5 Crore against a maximum tenor of up to 18 years.
- Your age must be between 25 and 70 years.
- You must have a regular source of income.
- You must be residing in a metropolitan city in India. Most lenders provide a list portraying all the cities where they extend their services.
Any applicant who fulfils the eligibility criteria should know about the required documents to apply for a loan against property. Similarly, the list can be found on a lender’s website.
Documents required to avail a loan against property
If you are applying for a Loan against property, you have to produce the following list of documents:
If you a salaried individual, you have to produce:
- Last salary slip.
- Bank statements of the last 3 months.
- KWC documents like PAN and Aadhaar Card.
- Residential address proof.
- Copy of the papers of the mortgaged property.
- Income Tax returns.
If you a self-employed individual, you have to produce:
- Bank statements of the last 6 months
- KWC documents like PAN and Aadhaar Card
- Residential address proof
- Copy of the papers of the mortgaged property
How to apply for the advance?
After fulfilling all the above-mentioned steps, you can apply for a loan against property either online or offline. While applying offline, you will have to visit the nearest branch office of your preferred financial institution and submit the filled application form along with the relevant documents.
For online application, you can visit the official website of the lender and select the type of credit you want to avail. Under loan against property, you will have to select the correct fields like the mortgaged asset’s details, some personal information, etc.
After completing this process and uploading the necessary documents, the application will go for verification.
It usually takes only a few minutes for verification, and a few working days for the loan disbursal. NBFCs even come with pre-approved offers that make the process of availing the loans easier and hassle-free.
These offers are available on various types of loans like home loans, personal loans, and business loans along with various other financial products. You can check your pre-approved offer by providing a few basic details like your name and contact information.
Following this above mentioned guidelines will help you avail a credit in a quick and effortless manner. You will be able to cater to all financial requirements with the large loan amount.