Check the Loan Against Property Essentials List Before Applying for a Loan

A loan against property is a relatively uncomplicated loan offering tons of benefits. Borrowers love loans against property for several reasons. They can get a high loan amount and quick approval.

Additionally, the application process is seamless, and so are the repayment terms.

This article gives you more insights into a loan against property or LAP loanso you can decide whether to apply for it or not.

Why is a LAP Loan Unique?

A LAP loan is a secured loan, meaning you need to pledge a commercial or residential property to avail of the loan. When you submit your property papers to the lender, a transfer of interest happens.

This means that you can continue living in the pledged property, although the property's legal rights get transferred to the lender until the last EMI is paid. 

A LAP loan is unique for several reasons. The following are a few:

     Attractive Interest Rates - LAP loan interest ratesare much lower than other loans. Since the loan is secured, lenders do not mind offering the lowest rates for eligible borrowers.

     High Loan Amount - The loan amount of a LAP loan can be up to 60% of the property's market value. However, the effective loan amount also depends on your income and credit score.

     Convenient Application Process - The application process of a LAP loanis straightforward. You can visit the lender's website and place a request. Lenders like PNB Housing send a loan officer to your address, who verifies the original documents and approves the loan.

     Quick Approval - Since a LAP loan is collateral-based, lenders generally approve the loan faster than many other loans. You may expect the loan amount in your account within 24 hours of the loan approval.

     Multiple Property Types - You may pledge any commercial or residential freehold, rented, or vacant property to avail of a LAP loan.

     Long Repayment Tenure - The repayment term of a LAP loancan be up to twenty (20) years. An extended loan term means lower EMIs.

     Tax Benefits - A LAP loan also enables you to save taxes under Section 37(1) and 24(B) of the Income Tax Act. Section 37(1) applies for business expenditure, and Section 24(B) applies for house construction.

What are the Eligibility Criteria of a LAP Loan?

Almost all lenders have similar eligibility criteria for LAP loans. Your monthly income should be above the threshold set by the lender. And your credit score needs to be above 750.

However, if your credit score is lesser than 750, lenders may increase the LAP loan interest rate. You need to submit the original property papers while availing of the loan. The lender may also ask for photocopies of bank account statement, Income Tax Returns, and KYC documents along with the application form.

Should You opt for a LAP Loan?

When you low-interest funds urgently, a LAP loan can be your best bet. You may use the loan amount for both personal reasons and business. However, desist yourself from applying for this loan when you are not sure about repayments—not repaying the EMI before the due date might harm your credit score. In the worst case, the lender may sell your property to recover their loan dues.


A loan against property or LAP loan can make you financially stable. However, you need to exercise caution when your income is unstable. Contact reputed lenders like PNB Housing for getting the best LAP loan interest rates.

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