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Eligibility Criteria For Loan Against Property (LAP)

Taking a right decision to fulfill the financial need at the right time is all about the difference between a good step and a missed opportunity. Funds to meet urgent expenses like education, marriage, health care can be arranged with Loan Against Property (LAP). Property – Property is that asset that we not only own but it also holds a magical power to convert our dreams into reality. Both commercial & residential properties work as a security to provide shelter to our dreams.

As the name suggest it’s all about the money borrowed against the asset we own. Or we can say, taking loan by mortgaging your property -is a Loan Against Property. It’s a multi purpose loan that allows the consumer to use the borrowed amount for business as well as for personal use.


Loan Against Property can be availed by both salaried as well as self employed professional/ non professionals (SEP/SENP).This term differs from bank to bank but there are certain common eligibility conditions that a borrower needs to fulfill in order to get the loan sanctioned:


  • A salaried professional should be in a permanent job with a government or a private organization for more than 2 years.
  • An individual has to be an Indian resident with minimum of 25 years to apply for this loan.
  • Minimum net monthly income should be 18000pm
  • Good credit (CIBIL) Score is required.

Self Employed Professional/ Non Professional

  • A self employed individual like traders, manufacturers who files tax returns regularly atleast for last 3 years.
  • Self employed professionals like Doctors, Engineers, Architects, Chartered Accountants can also avail the facility of this product.
  • An individual has to be an Indian resident with minimum of 25 years to apply for this loan.
  • Minimum net monthly income should be 25000pm
  • Good credit (CIBIL) Score is required.

(To Know More About Credit Score)

Bank considers the monthly income and debt(fixed) obligations before approving the loan. Repayment of existing loans, previous loans and credit card bills will be tracked to evaluate the repayment details. If an individual is capable enough to manage the monthly proposed installments from the current earnings along with the current liabilities is eligible to avail this loan.

Eligible Property

  • Property to be mortgaged should have a clear legal title.
  • Loan eligibility is also calculated based on the value of the property to be mortgaged.
  • Property to be mortgaged has to be owned by the borrower or co-borrower.
  • If a property is in an under construction mode, the lender disburse the amount as per the stage of construction. Interest is charged on the amount being payed in advance i.e. You only need to pay the interest on amount received and not towards the undisbursed loan amount.

While considering a LAP, banks mostly look for the following factors:

  • Property value
  • Repayment capacity
  • Age & Qualification of the applicant
  • Number of dependents
  • Co-applicant/ spouse income
  • Total assets & liabilities
  • Legal & technical aspect of the property

 Key Features

 Loan Amount

The loan amount ranges from 5 Lac to 5 crores.

Interest Rates

When eligibility meets the standard criteria, attractive interest rates are offered by different lenders, starting from as low as 9.5% with an option of fixed and floating rates.

Faster Processing

Loan Against Property eligibility calculator at Mudra home calculates the loan amount and the monthly installments by giving the property value and your monthly income. With the complete set of evaluating reports and the required documents the processing becomes easier and within few weeks the loan amount get sanctioned.


Being a long term secured loan, repayment is easier as it is available for long tenure of 10 – 15 years. Pre-payment option is an easy way to repay the loan amount.

At times, lenders apply Pre-closure charges on foreclosure which can be discussed at the time of loan sanctioning agreement.

 Any kind of Property

Pre owned Residential, Industrial, Commercial, alternate properties (schools, hotels, hospitals, residential plots and industrial property) and loans for purchase of commercial properties.

 BT Available

Balance Transfer facility is available where one can easily transfer the loan amount to avail better interest rates and additional amount (known as Top Up) on better terms & conditions.

Apart from KYC documents like Identity proof, address proof, business proof, applicant has to serve various income proof documents as required by the lender. (To Know More About KYC & Its Importance)

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