Here is a list of loan against property documents required for a LAP application to a bank or NBFC. Add identity proof, address proof, income proof and property documents for quick approval & disbursal of a loan against residential/commercial property application. A sample LAP documents list include: Aadhar, PAN, Salary Slips/ business income proof, bank statements, house tax receipt & sale deed.
A Loan Against Property (LAP) is a kind of a personal loan but with a difference. The significant difference is that the personal loan is unsecured, whereas a Loan Against Property is secured finance. Borrowers offer their residential, commercial, or industrial property against which the banks provide finance.
The purpose of the Loan Against Property is to meet individual emergencies, including the unforeseen ones like medical expenses. Besides, the borrower can use the Loan Against Property for expenses like marriage, educational, and any other purpose except for speculation. Similarly, a Loan Against Property is also available for meeting business expenses like a working capital requirement, procurement of business assets, and so on.
The similarities between the Loan Against Property and personal loan are as follows:
The differences between the two facilities are:
Loan Against Property has the following features and advantages:
Every bank has its requirements as far as documents are concerned. However, we shall look at the general documentation. The list can be an exhaustive one. However, the applicant should provide only relevant documents.
Applicants can submit the self-attested photocopy of one of the following documents as proof of identity:
Apart from these documents mentioned above, banks also accept some of the following documents as proof of identity:
A self-attested photocopy of one document among those listed below can suffice. However, the applicant should note not to submit the same paper for address and ID proof.
Besides these documents, banks also accept the following documents as address proof:
Business address proof can include the documents listed above. Apart from these documents, the following papers can also suffice to prove the address and existence of the business:
Self-attested photocopy of one document is enough:
One of these documents can suffice:
Loans against property are available to non-individuals, as well. Non-individual borrowers can include partnership firms, private and public limited companies, trusts, associations, HUF, societies, and so on.
Hindu Undivided Family
Societies and Associations
The property documents are necessary to determine the genuineness of the title to the property. The borrowers have to deposit the original title deeds of the property with the bank as collateral.
Apart from the regular KYC documents, the NRI should provide copies of the following additional documents:
The process starts with the loan application received from the applicant:
Generally, the Loan Against Property eligibility is calculated as the least of the following values:
The EMI amount depends on the repayment tenure, which, in turn, depends on the age of the borrower. (Generally, the borrower should not be more than 70 years of age at the time of the maturity of the loan).
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The banks in India cannot access the credit history of the borrower in respect of funds borrower abroad. Therefore, the NRI borrower should arrange for this report to enable the bank to assess the credit behaviour of the borrower.
No, it is not necessary because the banks can access and call for the credit report through their official channels.
It depends on individual banks. Some banks have stipulated the minimum net annual income to be 3 lakhs, whereas some banks have a higher amount. If the minimum amount is such that IT filing is compulsory, the borrower has to submit IT returns. Self-employed persons should necessarily submit IT returns
Some banks insist on the property to be either vacant or self-occupied. Central Bank of India does not sanction Loan Against Property on rented property. The bank has a specific product, Cent Rental to cater to such cases. In the regular mortgage scheme, the property should not be rented out. However, other banks do not have any such restriction. It depends on the bank where you apply for the loan.
Banks consider vacant residential plots as collateral for loans against property. Generally, the LTV ratio is such loans is around 50%.
Yes, there are no restrictions on this score. The borrower can offer the same property provided it satisfies the LTV ratio condition.
Yes, there is no problem with accepting such properties. The borrower should declare the entire rental income in the IT returns.
Yes, such a case can arise at times. Under such circumstances, the borrower should arrange for a co-borrower with a regular source of income.
The co-borrower should be a close blood-relative such as parents, children, spouse, and even siblings.
The property owner should be the prime applicant in a Loan Against Property. Banks allow the addition of co-applicants for enhancing eligibility. If the property is in joint names, all the co-owners of the property automatically become co-applicants.