A Loan Against Property (LAP) is one of the most cost-effective ways to raise large funds when you own a residential or commercial property. Compared to personal loans, LAP offers lower interest rates, higher loan amounts, and longer repayment tenures, making it ideal for business expansion, debt consolidation, education, or major personal needs.

This complete guide explains everything you need to know before applying for a LAP.

What Is a Loan Against Property?

A Loan Against Property is a secured loan where you mortgage your property with the lender to raise funds. You continue to own and use the property, but the bank holds a legal charge until the loan is fully repaid.

LAP can be availed for business purposes or personal needs, depending on lender policies.

Types of Properties Accepted

Most banks and NBFCs accept:

• Self-occupied residential property
• Rented residential property
• Commercial property (shops, offices)
• Industrial property (select cases)

Land or under-construction properties are usually not accepted.

LAP Loan Amount & LTV Limits

The loan amount depends on property value, income, and repayment capacity.

Typical LTV for LAP:

• Residential property: 60%–70%
• Commercial property: 50%–65%

Higher property value and strong income profile can help secure better terms.

Eligibility Criteria for LAP

For Salaried Individuals

• Stable employment
• Age usually between 25–58 years
• Minimum income as per lender norms

For Self-Employed / Business Owners

• Stable business vintage (2–3 years)
• Consistent income shown in ITRs
• Clean banking history

Documents Required

• KYC documents (Aadhaar, PAN)
• Income proof (salary slips / ITRs)
• Bank statements (6–12 months)
• Property documents (title deed, sale deed, approved plans)

Complete documentation helps avoid delays.

Interest Rates & Tenure

• Interest rates are usually lower than personal loans
• Tenure ranges from 10 to 20 years
• Longer tenure means lower EMIs, but higher overall interest

Choosing the right balance is important.

How FOIR, LTV & Credit Score Affect LAP

• FOIR: Determines EMI affordability
• LTV: Limits loan amount based on property value
• Credit Score: Affects interest rate and approval speed

A strong profile across all three increases approval chances.

Key Benefits of LAP

• Lower interest rates
• Higher loan eligibility
• Long repayment tenure
• Property ownership remains with borrower
• Funds can be used flexibly

Things to Keep in Mind Before Applying

• Missed EMIs can risk your property
• Property valuation may be lower than market price
• Prepayment charges may apply
• Business usage may require additional documentation

How Direct Credit Helps You

At Direct Credit, we help you unlock the true value of your property. From evaluating property eligibility and negotiating LTV to ensuring quick approvals with top banks and NBFCs, we handle the process end-to-end with full transparency.

Contact Us

Planning to raise funds through a Loan Against Property but unsure about eligibility, valuation, or interest rates? The experts at Direct Credit are here to guide you with the best loan structure for your needs. Call us today at 9010031003 for expert advice, competitive rates, and smooth loan processing.