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What is Loan Against Property?
Loan against property (LAP) means a loan that is disbursed or given against the property. The loan is given at a certain percentage of market rates of the property, mostly around 70% – 90%. Loan against property(LAP) is the component of secured loan group where the borrower allocate a guarantee by using property as security.
Putting your property as collateral doesn’t mean that you are not allowed to use it however, you will have to be good on your promise of repayment after a certain period of time. Otherwise, the bank is fully in their rights to take that property from you. There is no need to worry if you are good on your promise and the collateral will be removed after your complete repayment.
You would think that the case of collateral behind these loans might make people apprehensive about getting this type of loan. However, it is considered to be one of the most favoured forms of loan in India. It is favourable in this nation for the following reasons:
- It can be applied for child’s marriage.
- For expanding a business
- For funding medical treatments
- For funding higher studies.
- For vacation purposes.
If you are a salary man:
- You need an Identity proof which can be an Aadhar card, Voter ID card, Driver License etc.
- You will need the salary slip for the past 3 months.
- A form-16 issues by your employer(current)
- Bank statement for the last 6 months.
- A cheque that covers the cost of administration and processing to the bank that is going to process your loan.
If you are a businessman(self-employed)
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You need an Identity proof which can be an Aadhar card, Voter ID card, Driver License etc.
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Credentials related to your education. This entails certificates, degrees, diplomas etc.
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Income tax returns for the past three years.
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Bank statement for the last 6 months.
If you are a self-employed professional:
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You need an Identity proof which can be an Aadhar card, Voter ID card, Driver License etc.
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Credentials related to your education. This entails certificates, degrees, diplomas etc.
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Registration and licensing certificates related to your profession.
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Existent of your business profile.
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Balance sheets of the past 3 years including the profit and loss statement of the company.
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Bank statement for the last 6 months.
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IT statements (acknowledged) of the past three years.