You may have heard of personal loans, home loans, and business loans, but a loan against property is also an important option you must consider. Here are some details regarding a LAP. 

What is a Loan Against Property? 

A loan against property (or LAP) is a type of loan wherein the vendor keeps the borrower’s asset with them as a mortgage until the loan is repaid. This is a type of secured loan, and may be used for properties like land, house, or other premises. 

Benefits of loan against property 

Here are some advantages of taking a loan against property: 

• You can get a higher loan amount. 
• The tenure may be longer, so you have more time to pay back the loan. 
• Loan against property interest rates is also considerably lower when compared to the interest rates of other types of loans. 
• Even though the loan provider may keep the asset with them for mortgage purposes, the ownership of the property remains with the borrower. 

Eligibility criteria and documents 

Here are some of the eligibility criteria and required documents to withdraw a loan against property:

• The borrower must be a salaried individual or self-employed. 
• A copy of the property documents must remain with the lender.
• The borrower must share their bank account statements for a timeframe with the vendor.
• Identification documents such as PAN or Aadhar card. 
• Proof of address. 
• Income proof to validate payback capability

Therefore, a loan against property is a pretty secure option if you’re looking to buy a house or commercial premises in India. 

Must Read: 5 Things to know before Applying for Loan Against Property