Frequently Asked Questions (FAQs) on Loan Against Property (LAP)
A Loan Against Property (LAP) is a secured loan where the borrower pledges a residential, commercial, or industrial property as collateral to borrow funds. The lender retains the property title until the loan is repaid.
Eligibility varies among lenders, but typically, salaried professionals, self-employed individuals, and businesses owning a property are eligible. The property must be free from legal disputes and must be in the name of the borrower.
You can pledge residential, commercial, or industrial property that you own. Some lenders also allow agricultural land, but this is less common.
The loan amount depends on several factors, including the market value of the property, the borrower’s repayment capacity, and the lender’s policies. Typically, lenders provide 50%-75% of the property’s current market value.
The tenure for LAP can range from 5 to 20 years, depending on the lender’s terms and the borrower’s eligibility.
The interest rates on LAP are generally lower than personal loans, as the loan is secured against property. The rates vary between 8% to 14%, depending on the lender and the borrower’s profile.
Yes, you can use the loan amount for various purposes such as business expansion, funding education, medical expenses, weddings, or even to consolidate debts.
Typically, the documents required include:
- Proof of identity and address
- Proof of income (salary slips, bank statements, ITRs)
- Property documents (title deeds, ownership proof)
- Employment or business details
- Financial statements (for businesses)
The processing time varies by lender but generally takes 10 to 15 working days. It could take longer if there are issues with property valuation or documentation.
Yes, most lenders allow prepayment of LAP, but they may charge a prepayment penalty. It’s important to check with the lender for specific terms and conditions regarding prepayment.
