Who can avail a Loan against Property ?


LAP loan can be availed by Salaried employees , Professionals Self-employed business class and also those who are getting stable source of income like rental income etc. There is a minimum amount of salary that has to be earned by those who are employed and also a minimum limit of annual income earned by the professionals and other self-employed people. This condition is there to ensure that the people who can afford to repay the loans against property can only make use of the facility.

What is the difference between a Home loan and LAP?


Home loan is basically to acquire a home . Here the ownership comes to the borrower only with the purpose of acquiring a home. Loan against property is given to those who owns a property which is mortgagable. Tax benefits are being given to home loan borrowers, whereas in LAP, this benefit is not available. LAP loans are priced higher when compared to a home loan

Can I use LAP for any personal purpose?


Yes, LAP loan is an any purpose loan which you can use for any of your personal needs or business needs. It typically acts like a Personal Loan , with the difference that security need to be provided.

Can I close other loans with LAP?


Yes, LAP is a perfect product to consolidate all your loans which are running at higher costs. Moreover interest rate charged on LAP is relatively low when compared to unsecured loans.

How much loan I can get on my property?


Loan amount depends on the valuation of your property and also the use of property. Typically if the property is used for commercial purpose, loan is restricted to 50% of the market value of the property and for residential property, this may go upto 60-70% also. However it is at the discretion of the bank to sanction the loan amount , depending on the repayment capacity of the borrower.

Can I get an overdraft / cash credit against my property?


Yes, you can get overdraft against your property. Most of the banks offer this product under LAP head. The advantage with this product variant is interest would get charged only on the utlilised amount.

Can I get LAP against my property which has been leased out?


Yes, you can get a LAP loan on your leased out property. In fact if the lessee is a known corporate , then this is a perfect product to unlock value of your property. You can raise loan on the property and the monthly EMI shall be taken care of the rental income, thereby not putting pressure on your pockets. Such type of loan is also called Lease Rental Discounting (LRD). Most people use this product to add more property to their asset base.

Can I get tax rebates for LAP loan?


No, you cannot get tax relief under LAP Loan. However you can post the entire interest during the financial year  to your profit & loss account  as expenses.

Will the EMI amount or the tenure of the loan changes during the loan period?


Yes, the EMI amount or the tenure of the loan could get changed if one has availed a floating rate of interest.

Do I need to get property insurance while availing a LAP loan?


No, it is not mandatory to buy property insurance when you are availing a LAP loan. But it is in the interest of the borrower to insure property as it eliminate risk of loss of property

Can I sell the property even when the loan is not paid off?


Yes, you can sell the property even when the loan is active. However you need to inform the lender and get consent from them to sell. The title deeds shall be released to the borrower once all the dues to the bank are fully paid off.

I have a plot. Can I get a LAP loan against it?


No, most private banks in India do not give a loan on plot. However if there is a structure on the plot used either for residential or commercial use, then banks after doing the due diligence and upon satisfactory checks , they might sanction a loan. However nationalized banks consider plots to give loan against property.

Can I get a loan against my industrial shed?


Loan against property is usually given for residential and commercial property and that too for RCC structures. A few nationalized banks and private banks do consider industrial property as an additional security to enhance the limits to business. However it is purely at the discretion of the lender to sanction a loan against such properties.