What is a loan against property?
A loan against property (LAP) is a secured loan where you mortgage a residential, commercial or industrial property you own and receive a lump sum in return. Because the loan is backed by collateral, interest rates are much lower than personal or unsecured business loans, amounts are larger and tenures run up to 15 years. You keep living in or using the property throughout the loan — the lender only holds a charge on it until the loan is repaid.
Key features & benefits
- Loan amount from ₹5 Lakh up to ₹10 Cr, depending on property value and income
- Loan-to-value (LTV) of 60–70% of the market value of the property
- Interest rates from 9.15% p.a. — far lower than unsecured loans
- Repayment tenure up to 15 years for lower EMIs
- No end-use restriction for business, education, wedding, medical or debt consolidation
- Balance transfer with top-up and overdraft (OD) against property options
Eligibility criteria
- Indian resident, salaried or self-employed, aged 25–70 years at loan maturity
- Clear, marketable title to a residential, commercial or industrial property in your or a co-owner's name
- Stable income — minimum ₹25,000 per month for salaried; 3 years of ITR for self-employed
- Credit score of 700+ (some NBFCs consider 650+)
- All property co-owners must be co-applicants
Documents required
| Purpose | Accepted documents |
|---|---|
| KYC | PAN card, Aadhaar, passport or voter ID |
| Income proof | Last 3 salary slips & Form 16 (salaried); 3 years ITR, P&L and balance sheet (self-employed) |
| Bank statements | Last 6–12 months |
| Property papers | Title deed / sale deed, chain documents, approved building plan, latest property tax receipt, encumbrance certificate |
| Business proof | GST registration, Udyam / shop act licence (self-employed) |
Interest rates, fees & charges
| Charge | Typical range |
|---|---|
| Interest rate | 9.15% – 15% p.a. |
| Processing fee | 0.5% – 2% of loan amount |
| Legal & technical valuation | ₹5,000 – ₹15,000 |
| Prepayment (floating rate, individuals) | Nil |
| Prepayment (fixed rate / business) | 2% – 4% of principal prepaid |
| Stamp duty & mortgage registration | As per state laws |
How to get the best LAP deal
- Offer a self-occupied residential property — it usually gets the highest LTV and lowest rate
- Add an earning co-applicant to increase eligibility
- Compare the effective cost including processing, legal and valuation fees
- Choose a floating rate to prepay without penalty when you have surplus funds