What is Loan Against Property (LAP)?

LAP or Loan against property is a type of secured loan that is provided on personal, commercial property, or vacant land. Utilize your property and quench your financial thirst easily by mortgaging your land. The facility of loan against property is provided by all top banks and NBFCs at different rates of interest. Usually, the rate of interest depends on the eligibility of the customer. CIBIL score is the major consideration factor in getting a loan, maintain your CIBIL score and get the loan against land easily.

My Mudra is providing loans against land property within a day at 9.00% in online mode swiftly. The loan can be easily provided with three easy steps, starting with applying online, getting the documentation done, and the loan amount disbursal in your account. This type of loan can be provided on your agricultural land, private property, or commercial property. Opt for the OD limit and utilize the loan amount efficiently or choose the regular loan and make maximal use of your vacant land.

Where We Can Utilize The Loan Against Property?

The personal loan against property is considered to be the most secure form of loan. The loan against land can be utilized in the following ways.

Working Capital: Fulfill the working capital needs of the business by applying for LAP.
Expanding Business: Expanding a business requires a lot of money in hands which can be easily arranged through LAP.
Child Education: Funding children’s education in today's era is a cumbersome task because of inflation. Instead of taking the burden of asking for money from relatives or local money lenders opt for a mortgage loan against the land.
Monetary Crisis: Meeting an immediate personal or business monetary crisis opt for the LAP.
Medical Expenses
Expenses of a wedding.

Variants of Loan Against Property

Choose wisely in OD against property, or term loan whichever suits you the best and can quench your financial thirst easily.

1. Fixed Overdraft: An overdraft facility by the bank allows the applicant to borrow a certain amount from the line of credit and pay interest on the borrowed amount. It is to be noted that the interest shall remain the same throughout the tenure on the principal amount.

2. Dropline Overdraft: This is commonly known as the DOD, it is similar to that of the overdraft facility. In addition to that the principal amount is reduced every year and the borrower should pay the interest on the reduced amount.

3. Term Loan: It is a simple loan in which the borrower shall ask for the required amount from the bank and in return shall pay the amount with interest in the fixed tenure.

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Eligibility Criteria for the Loan Against Property

The eligibility criteria for the loan against property are mentioned below.

1. Age Requirement for LAP

a. Salaried: Applicant must be at least 25 years old at the time of loan application and should be a maximum of 65 years at loan maturity.

b. Self-employed: Applicant must be at least 25 years old at the time of loan application and should be a maximum of 65 years at loan maturity.

c. Business: The proprietor / prime partner / key director should be 25 years old at the time of application and should be a maximum of 65 years at loan maturity.

2. Eligibility Requirement for LAP

a. Salaried: Salaried individuals working with LLP / private limited/public limited companies.

b. Self-employed: Proprietor / Partner / Director. Self-employed professionals like chartered accountants, company secretaries, and doctors.

c. Business: Partnership or private limited companies engaged in manufacturing, servicing or trading.

3. Work History for LAP

a. Salaried: 1 year of overall experience and 2 months with the present employer.

b. Self Employed:

- Must be running the same business for the last 3 years
- Professionals with qualification of CA / CS/doctor with a minimum of 1 year of practice.

c. Business:Business stability/history of a minimum of 3 years in the same business.

4. Income for LAP

a. Salaried: Net monthly in-hand salary should be Rs.25,000.

b. Self-employed: Gross annual income should be a minimum of Rs.3 lakh

c. Business: Annual turnover should be a minimum of Rs.10 lakh.

Documents Required for Loan Against Property

a. Salaried: KYC details PAN Card, Aadhaar Card

b. Self-Employed: PAN Card, Aadhaar Card

c. Business:

- Firm/Company PAN Card, GST Registration Certificate (If applicable) and Other Applicable Registration
- KYC of Partners / Directors PAN Card and Aadhaar Card

1. Address Proof

Salaried/ business/Self-Employed:

Electricity bill for owned premises
Rent agreement for Rented premises
Passport

2. Income Documents

a. Salaried: Salary slip of the latest month

b. Self-Employed:

- Income Tax Returns along with computation for the last 2 years
- Profit/Loss statement and balance sheet for the last 2 years

c. Business:

- Income Tax Returns along with computation for the last 2 years.
- Profit/Loss statement and balance sheet for the last 2 years
- GST Returns

3. Bank Account Statement

a. Salaried: Salary credit bank account statement of the latest 3 months

b. Self-Employed: Operative bank account statement for the last 6 months

c. Business: Operative bank account statement for the latest 6 months.

4. Property Documents

a. Salaried: Legal & technical clearance of the property.

b. Self-Employed: Legal & technical clearance of the property.

c. Business: Legal & technical clearance of the property.

Loan Against Property Interest Rate

Mentioned below are the top banks that are offering loans against property. The loan against property interest rate, loan amount, and tenure are clearly mentioned in the table below.

Banks/ NBFCs	Interest Rate	Loan Amount	Tenure
State Bank of India	10.60% p.a. - 11.30% p.a.	Up to 7.5 crore	5-15 years
HDFC Bank	8.95% p.a. - 10.25% p.a.	Up to 60% of the value of the property	Up to 15 years
IDFC First	9.00% p.a. - 16.50% p.a.	Up to Rs.7 crore	Up to 20 years
Tata Capital	10.10% p.a. onwards	Rs.5 lakh - Rs.5 crore	Up to 20 years
Axis Bank	9.90% p.a. -10.35% p.a.	Rs.5 lakh – Rs.5 crore	Up to 20 years
Kotak Mahindra Bank	9.15% p.a. onwards	Rs.10 lakh - Rs.5 crore	Up to 15 years
Bank of India	11.25% p.a. onwards	Up to Rs.7.5 crore	Up to 15 years
Indian Bank	10.00% p.a. - 12.60% p.a.	Up to Rs.5 crore	Up to 15 years
Bank of Maharashtra	10.45% p.a. - 11.95% p.a.	Up to Rs.10 crore	Up to 10 years
PNB Housing Finance	10.40% p.a. - 12.75% p.a.	Up to Rs.5 crore	Up to 10 years
ICICI Bank	10.85% p.a. - 12.50% p.a.	Up to Rs.5 crore	Up to 15 years
Bajaj Housing Finance	8.50% p.a. - 18.00% p.a.	Up to Rs.5 crore	Up to 30 years
Indiabulls Housing Finance	9.75% p.a. onwards	Based on the customer's profile, repayment capacity, and the LTV ratio.	Up to 15 years
Bank of Baroda	10.85% p.a. - 16.50% p.a.	Up to Rs.25 crore	Up to 15 years

LAP Interest rates and charges for the loan against the property are mentioned in detail in the table below.

Type of Fee	Charges
Rate of Interest	8.0% p.a
Processing fee	0.30% of the loan amount
Other charges	NIL

How to Apply for a Loan Against Property?

Applying for a loan against agricultural land, a loan against private or commercial property is easy with My Mudra. Follow the steps mentioned below and utilize your property for the brightest future.

Apply for a loan from My Mudra by visiting the website.
Search for the secured loan section on the homepage and click on 'Loan Against Property'.
Click on the Apply Now button and start filling up the application form.
After successfully completing the loan against property application form, you will receive a call from us.
Get your loan against property documentation done within a day through the digital process.
Enjoy quick amount disbursal in your account.

Conclusion

My Mudra has made financial aid a cakewalk for people. Get the loan against property at an attractive interest rate within a day and utilize your land in the best possible way. It is always advisable to check monthly Loan against property EMIs from loans against the property EMI calculator. A loan is a planned decision and not a burden if taken wisely.

Also Read:
- Best Bank for Loan Against Property in India
- Loan Against Property (LAP) Eligibility Calculator Online

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Loan Against Property (LAP) - Eligibility and Interest Rates