Whenever you need a larger amount of loan one often go for the Loan Against Property 2025 (LAP). whether it can be for business growth, emergency funding or education, using your property for the loan amount can be a good option to get the loans at the lower interest rates with the longer repayment time. But there are several points you should keep in mind while applying for the Loan against property.
In this detailed article we will discuss about the following:
- What is Loan against property?
- Who is eligible for the loan?
- How is the interest rate calculated?
- Benefits and Risks of Loan against property?
- How to apply for the loan?
- Alternatives to consider?
What is Loan Against Property?
A loan against property is a secured loan where you pledge to keep the residential, commercial or industrial property as a collateral to the lender in return for a loan. The amount of the loan depends upon the market value of your property’s market value, your income and credit score.
In this type of loan there are comparatively lower rate of interest and longer repayment terms.
Loan Against Property Eligibility Criteria:
- The age of the applicant must be 25-65 years.
- Employment: To apply for a loan you must be salaried or self employed.
- Minimum income as per lender’s criteria.
- There should be a good repayment history and credit score (650+).
- Clear title of the pledged property.
Documents Required for the Loan Against Property 2025:
For Salaried Applicants:
- Aadhar, PAN, Address proof.
- Salary slips ( last 3 months)
- Bank Statement ( last 6 months)
- Property title deed.
For Self-employed:
- Business registration
- ITR (last 2-3 years)
- Financial statement
- Property documents
How is Interest Rate is Calculated on Loan Against Property:
Interest rate on the loan against property is typically floating or fixed, based on the market conditions. Use an online Loan Against property EMI calculator to estimate your monthly EMI.
- Average rates of interest for the LAP is 8.5% to 11.5%.
- Tenure of loan: Up to 20 years
- Loan-to-Value(LTV): 60-70%
Key benefits of Loan Against property
- Lower interest rates than other personal loans.
- Higher loan amount up to ₹5 crore or more depending upon the value of the property.
- Long repayment tenure.
- Continue using your property.
- Tax benefits if used for the business
Risks & precautions
- The one of the biggest risk in the Loan against property is that if you fail to repay loan you could lose your property
- Long processing time.
- Additional charges: processing fee, valuation, foreclosure fee
Tip: Always read the fine print of the terms and compare with the other loan against property interest rates from the multiple lenders.
How to Apply — Step by Step process:
- Check the eligibility and credit score.
- Choose the property to mortgage
- Compare LAP offers and interest rates.
- Apply online or offline with all the required documents.
- Property valuation & legal verification
- Loan sanction and disbursement.
Loan Against Property vs Home Loan:
| Feature | LAP | Home Loan |
| Purpose | Any use | Purchase/construction only |
| Collateral | Existing property | New/under-construction home |
| Interest Rate | 8.5%–11.5% | 7%–10% |
| Tenure | Up to 20 years | Up to 30 years |
Frequently Asked Question:
Q1 Can I get loan on the jointly owned property?
Yes but all the co-owners must sign the application and agreement.
Q2. Will my credit score improve by pay repaying LAP on time?
Yes LAP repayments is reported to to credit bureaus
Q3. Can I take LAP on the rented property:
Yes if you legally own the rented out property.