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Loan Against Property (LAP)


Loan against property is a loan which you can take by keeping your commercial or residential property as a collateral. The value of your property is the deciding factor for the the amount of potential loan that can be sanctioned. Fast and easy loans online are readily available.

Property as collateral for a loan

Generally, when you own a property, you can give it as a collateral for availing a secured loan. When you mortgage your property, usually the banks will use some percentage of loan-to-value. This is to ensure that they are not giving you more than your property’s value. Says Gaurav Gaur, CEO and Founder, The loan given against the property, is usually around 40 – 60 % of the market value of the property. Check online loans to make a better assessment.

Is loan against property taxable

There is no tax benefits or exemption for Loan Against Property (LAP). But one can continue to claim the available tax exemptions on any existing home loan on the same property against which you have taken a LAP.

Documents Required for LAP

For salaried

  • Recent Salary Slips
  • Bank account statements of the past 3months
  • PAN Card or Adhaar Card
  • Address Proof
  • Valid Copy of the documents of the property to be mortgaged
  • IT Returns

For self-employed

  • Bank account statements of the past 6 months
  • PAN Card or Adhaar Card
  • Address Proof
  • Valid Copy of the documents of the property to be mortgaged

Options for NRI to take loan against property

The procedure for availing a loan against property for an NRI is similar to a resident Indian citizen. If you meet the eligibility criteria, are an NRI, banks will easily sanction LAP. For that you should to be either salaried and/or work for a recognised organization.

CIBIL score essential for loan against property

A CIBIL score any less than 750 is not considered good by any bank or NBFCs. First improve your CIBIL score and only then should one apply for Loan Against Property. Credit history carries most weight for a CIBIL Score. It also depends on Repayment History, so clear all your loan EMIs and credit card dues on time, too many loans and credit cards also affects your CIBIL score.

Do we need insurance for loan against property

Though essential, you are under no obligation to buy an insurance for LAP. No regulatory bodies such as RBI or IRDAI  or any law has made the purchase of Insurance with a LAP compulsory.

Personal house as collateral for a LAP

A residential house is most commonly used as a collateral as it comes under less risk factor as compared to a commercial establishment. For a house to qualify as collateral, it must be free and clear of any dues and mortgages and have enough equity to cover the loan amount. Check loans online

Can the loan against property be converted to home loan

No, you cannot convert LAP to home loan. Though one can increase the tenure of the loan to reduce the EMI. If you apply for a home loan your existing LAP might have an impact on your home loan amount. Opt for fast and easy loans online.


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