Loan Against Property will help you to raise capital based on the value of your property. LAP is available for both salaried as well as self-employed people. You can apply for LAP for both residential as well as commercial property. You don't have to sell your property in order to get a loan and you will get your property back as soon as you repay the loan.
Loan against Property is considered to be a secured personal loan that you can avail by mortgaging your property. As you are pledging your property as collateral, the rate of interest is low as compared to other personal loans.
Eligibility Criteria for Loan Against Property
Loan against property eligibility criteria has to be fulfilled by the person in order to receive a loan against property. Let us have a look at the eligibility criteria for loan against property.
- The applicant must be a self-employed, salaried individual or an Indian SME.
- The applicant’s age should be of 21 to 60 years for salaried individuals and between 25 to 65 years for self-employed individuals.
- The applicant should have a CIBIL score of at least 700.
- Documents like Form 16, Income Tax Returns of the last 2 years, KYC documents, bank statements, etc. of the applicant are required.
- Complete documents that have been authorized by the Government of India for the property to be mortgaged have to be provided.
Documents required while applying for Loan Against Property
- Identity Proof – Documents such as Driving License, Passport, and PAN Card.
- Address Proof – Aadhar Card, Electricity Bill, Passport.
- Property Documents – Copy of allotment-possession letter, No Objection Certificate from the society, and original sale deed.
- Income Proof – Form 16, audited financial sheet, qualification certificate, latest income tax return certificate, shop act license,
- certificate of practice, and tax certificate.
Steps involved in the application process
In the case of every loan, the entire process begins with the application. You have to fill an application form with personal and professional details along with several other details regarding loan requirements, property intended to be kept for a mortgage, and much more.
The next step is the processing of the loan. This step usually begins with a personal discussion that is followed by field investigation. While submitting the application form you will have to pay the processing fee that is up to 1-2 per cent of the intended loan.
When you go to the lender for personal discussion, you must carry all the original documents that are essential along with the application form. The lender will verify all the personal as well as employment details based on the documents submitted by you.
Loan sanctioning is the next process after the lending institution has verified all your financial credentials on the basis of your age, income, qualifications, nature of business, and experience. The lender works out the maximum eligibility of loan based on your documents. Later on, the financial institution sends a sanction letter that possesses all the relevant details of the loan. If you are ok with all the terms and conditions of the loan, then you can sign the acceptance copy.
- Valuation and Legal Check
The next stage is where the financial institution will make valuation and legal checks. The main focus of the lender will now shift towards the property that you are intending to a mortgage. Make sure that you have all the property papers as well as NOCs ready with you. After checking the legality of documents, the lending institution sends an appraiser to evaluate the market value of your property.
The lending institution will disburse the loan once it is ascertained with all the factors such as the client's repayment capacity as well as the property legality. You can use the loan money for various purposes including the expansion of business, child’s education or wedding.
