What is a Property Loan?
A Property Loan, often called Loan Against Property (LAP), is a secured loan where you pledge your residential, commercial, or industrial property as collateral to borrow funds from a bank or financial institution. The loan amount is usually a percentage of the property’s market value (commonly 50%–70%).
Benefits of a Property Loan
Large Loan Amount – You can borrow a significant amount (often in crores) based on property value.
Lower Interest Rates – Being a secured loan, interest rates are generally lower than personal loans.
Flexible Tenure – Repayment period can go up to 15–20 years, making EMIs affordable.
Utilization Freedom – Funds can be used for business expansion, education, medical expenses, or debt consolidation.
Ownership Retained – You continue to own and use the property while it is mortgaged.
Top-up Facility – Some lenders allow additional funding on the same property.
Eligibility Criteria
Eligibility varies by lender, but typically:
Age:
Salaried: 21 to 60 years
Self-employed: 21 to 65 years
Income Stability:
Salaried: Regular monthly income from a reputed employer
Self-employed: Profitable business for 2–3 years
Property Ownership:
The property should have a clear title and legal ownership
Credit Score:
Usually 650+ for better interest rates
Employment/Business Continuity:
Salaried: Minimum 2–3 years of work experience
Self-employed: 3 years in current business
Documents Required
Documents differ for salaried and self-employed, but generally include:
1. Identity Proof
PAN Card
Aadhaar Card / Passport / Voter ID / Driving License
2. Address Proof
Utility Bill, Passport, or Rental Agreement
3. Property Documents
Title Deed (Clear Ownership)
Approved Building Plan
Previous Sale Deeds
Property Tax Receipts
4. Income Proof
For Salaried:
Salary Slips (last 3–6 months)
Form 16 / IT Returns (last 2 years)
Bank Statements (last 6 months)
For Self-Employed:
ITR (last 2–3 years)
Balance Sheet & Profit & Loss Account (audited)
Business Registration Proof
Bank Statements (last 12 months)
5. Other
Passport-size photographs
Cheque for processing fee.