Planning to get a Loan Against Property (LAP) to meet your urgent financial needs? A LAP is a long-term commitment so, it is imperative to have a clear understanding of LAP and how it differs from a home loan. Doing so will help you make the most out of Loan Against Property. To know in detail about what a LAP loan is, keep reading.
What is a Loan Against Property?
Loan Against Property is a type of secured loan for salaried or
self-employed individuals to cover their substantial monetary
expenses. With this financial product, you can borrow funds from
lenders by collateralizing your property.
After assessing your
residential or commercial property, lenders will approve your loan
application and determine the applicable loan amount based on the LTV
(Loan-to-Value) ratio. To opt for LAP in finance, you can mortgage
any self-owned, piece of land or shop. However, the title and
ownership of the property involved must be made clear.
Features and Benefits of Loan Against Property Loan
Check out important features of Loan Against Property:
- Property Types: House, apartment, flat or commercial shop or building
- Eligibility: Salaried, Self-employed, Firm / Company Owners
- High Loan Amount: Depending on the property you are pledging as collateral and your repaying capacity, lenders sanction higher loan amounts as compared to other loan types. Lenders tend to provide up to ?5 Crore as loan amount.
-
Competitive Interest Rate: As LAP loans are
secured, lenders have a backup to raise the loan amount. Lenders are
thus open to offer competitive interest rates as opposed to
unsecured loans and other loans involving mortgages. These inter
Planning to get a Loan Against Property (LAP) to meet your urgent financial needs? A LAP is a long-term commitment so, it is imperative to have a clear understanding of LAP and how it differs from a home loan. Doing so will help you make the most out of Loan Against Property. To know in detail about what a LAP loan is, keep reading.
What is a Loan Against Property?
Loan Against Property is a type of secured loan for salaried or self-employed individuals to cover their substantial monetary expenses. With this financial product, you can borrow funds from lenders by collateralizing your property.
After assessing your residential or commercial property, lenders will approve your loan application and determine the applicable loan amount based on the LTV (Loan-to-Value) ratio. To opt for LAP in finance, you can mortgage any self-owned, piece of land or shop. However, the title and ownership of the property involved must be made clear.Features and Benefits of Loan Against Property Loan
Check out important features of Loan Against Property:
- Property Types: House, apartment, flat or commercial shop or building
- Eligibility: Salaried, Self-employed, Firm / Company Owners
- High Loan Amount: Depending on the property you are pledging as collateral and your repaying capacity, lenders sanction higher loan amounts as compared to other loan types. Lenders tend to provide up to ?5 Crore as loan amount.
- Competitive Interest Rate: As LAP loans are secured, lenders have a backup to raise the loan amount. Lenders are thus open to offer competitive interest rates as opposed to unsecured loans and other loans involving mortgages. These interest rates usually start from 9% p.a.
- Flexible Tenure for Repayment: The loan payment tenure for LAP is flexible for up to 180 months. With a longer period, the EMI amount is reduced, and it becomes affordable for borrowers to pay this amount on time.
- No End Use Restriction: Unlike other secured loans like Housing Loan or Machinery Loan, LAP loan does not have end use restriction. You can finance requirements like children's education, travel, wedding, home renovation, consolidation of debt and much more.
- Instant Approval: As it is a secured loan, the LAP loan is usually approved instantly. You just need to upload all the required documents for LAP.
ALSO READ :- Major factors to consider while applying for Loan Against Property
Documents Required for a Loan Against Property
To avail LAP product from your preferred lender, you must provide the below mentioned documents along with your application form:
- Proof of identity: PAN Card/Aadhaar Card/Driving License/Voter ID/Passport
- Address Proof: Electricity bill for owned premises, Rent agreement for Rented premises, Passport
- Bank Account Statement: 6 months
- Property Documents: If finalized along with legal and technical clearance of the property
- Salaried Individuals: Past 3 month's salary slip and Form 16
- Self-employed individuals: Proof of their IT returns of last three years and balance sheets and P and L statements of the same period.
- Firm/Company Owners: Business profile, IT returns proof of the last three years and balance sheet and P and L statement of the same span.
How to Apply for a LAP Online?
Basic steps to successfully apply for a Loan Against Property online are mentioned below:
- Step 1: Click on ‘Apply Now’ on the lender’s website.
- Step 2: Enter all the required details in the application form.
- Step 3: Upload the necessary documents and submit the application form for verification.
Loan Against Property vs Home Loan
Now that you have a brief idea of LAP meaning in finance, let’s take you through the differences between Loan Against Property (Mortgage Loan) and Home Loan.
Parameters
Loan Against Property
Home Loan
End Use
It does not have any end-user restrictions
You can only purchase, construct or renovate a house or commercial property
Loan Tenure
Up to 180 months (about 15 years)
Up to 360 months (about 30 years)
Documentation Process
Quite elaborate as lending institutions would need to conduct a thorough verification of the property
Less elaborate compared to a LAP loan
ALSO READ :- What If the Rate of Your Mortgaged Property Falls?
To Conclude
Remember, your home/property can give wings to your dreams or can come to your aid during any pressing time. So, if you are looking to avail a Loan against property, ensure that you commence the process by contacting a lender offering such a loan. With a thorough knowledge of what LAP loan is, you can conduct thorough research and make an informed decision regarding the Loan Against Property application.
Poonawalla Fincorp fulfils your loan requirements and extends best-in-class products and services that empower you to achieve your personal dreams and professional milestones.Frequently Asked Questions About Concept of LAP
1. Can I opt for Loan Against Property for a Co-owned property?
Yes, you can opt for a Loan Against Property for a co-owned property. However, both owners of this property must apply jointly.2. What are the different types of properties that I can pledge for LAP?
You can pledge for loan against residential property, commercial property, industrial property.3. What can I use a Loan Against Property for?
est rates usually start from 9% p.a.
There is no end-user restriction for Loan Against Property. Therefore, you can use this loan for any financial requirement. - Flexible Tenure for Repayment: The loan payment tenure for LAP is flexible for up to 180 months. With a longer period, the EMI amount is reduced, and it becomes affordable for borrowers to pay this amount on time.
- No End Use Restriction: Unlike other secured loans like Housing Loan or Machinery Loan, LAP loan does not have end use restriction. You can finance requirements like children's education, travel, wedding, home renovation, consolidation of debt and much more.
- Instant Approval: As it is a secured loan, the LAP loan is usually approved instantly. You just need to upload all the required documents for LAP.
ALSO READ :- Major factors to consider while applying for Loan Against Property
Documents Required for a Loan Against Property
To avail LAP product from your preferred lender, you must provide the below mentioned documents along with your application form:
- Proof of identity: PAN Card/Aadhaar Card/Driving License/Voter ID/Passport
- Address Proof: Electricity bill for owned premises, Rent agreement for Rented premises, Passport
- Bank Account Statement: 6 months
- Property Documents: If finalized along with legal and technical clearance of the property
- Salaried Individuals: Past 3 month's salary slip and Form 16
- Self-employed individuals: Proof of their IT returns of last three years and balance sheets and P and L statements of the same period.
- Firm/Company Owners: Business profile, IT returns proof of the last three years and balance sheet and P and L statement of the same span.
How to Apply for a LAP Online?
Basic steps to successfully apply for a Loan Against Property online are mentioned below:
- Step 1: Click on ‘Apply Now’ on the lender’s website.
- Step 2: Enter all the required details in the application form.
- Step 3: Upload the necessary documents and submit the application form for verification.
Loan Against Property vs Home Loan
Now that you have a brief idea of LAP meaning in finance, let’s take you through the differences between Loan Against Property (Mortgage Loan) and Home Loan.
| Parameters |
Loan Against Property | Home Loan |
|
End Use |
It does not have any end-user restrictions | You can only purchase, construct or renovate a house or commercial property |
| Loan Tenure | Up to 180 months (about 15 years) | Up to 360 months (about 30 years) |
| Documentation Process | Quite elaborate as lending institutions would need to conduct a thorough verification of the property | Less elaborate compared to a LAP loan |
ALSO READ :- What If the Rate of Your Mortgaged Property Falls?
To Conclude
Remember, your home/property can give wings to your dreams or can
come to your aid during any pressing time. So, if you are looking to
avail a Loan against property, ensure that you commence the process by
contacting a lender offering such a loan. With a thorough knowledge of
what LAP loan is, you can conduct thorough research and make an
informed decision regarding the Loan Against Property
application.
Poonawalla Fincorp fulfils your loan requirements
and extends best-in-class products and services that empower you to
achieve your personal dreams and professional milestones.
Frequently Asked Questions About Concept of LAP
1. Can I opt for Loan Against Property for a
Co-owned property?
Yes, you can opt for a Loan
Against Property for a co-owned property. However, both owners of
this property must apply jointly.
2. What are the different types of properties that
I can pledge for LAP?
You can pledge for loan
against residential property, commercial property, industrial property.
3. What can I use a Loan Against Property
for?
There is no end-user restriction for Loan Against
Property. Therefore, you can use this loan for any financial requirement.