Do you require urgent funds? Have you considered a loan against property? A LAP loan is a secured loan wherein you pledge your property as collateral, and in return, you get adequate funds to help you achieve your financial goals.
But many people hesitate to apply for this loan, assuming the application process will be complicated and tedious. However, the reality is quite the opposite. Despite being a secured loan, applying for a loan against property is surprisingly easy.
Here are a few simple steps to apply for a loan against property.
#1. Find out the maximum loan amount
Before starting your application process, you must figure out the LAP loan amount you can avail of. The loan amount depends upon your property's market value, and the maximum loan amount you can obtain differs across lenders.
For instance, at Tata Capital, you can get a loan amount of up to Rs 5 crores with a maximum loan tenure of up to 20 years.
#2. Check eligibility criteria for LAP loans
The next step is to check if you meet the eligibility criteria for a loan against property. These may vary from lender to lender, but some standard requirements are as follows:
#1. Property’s Value: The value of the property should meet the lender's requirements as it determines the loan amount.
#2. Age: The age should be a minimum of 23 and a maximum of about 70 years or the retirement age, whichever is earlier at loan maturity
#3. Income: It should be at least Rs. 2,50,000 per annum for self-employed professionals and Rs 2,40,000 for salaried individuals.
#4. Occupational Stability: In the case of salaried employees, you should be working for a minimum of 3 years before applying for the LAP loan.
Upon meeting these eligibility requirements, you may proceed to fill out the LAP loan application form.
#3. Fill out the application form
One may apply for a loan against property either online or offline. To apply for the loan offline, you must visit the bank's branch with the necessary loan against property documents. But if you wish to apply for a LAP loan online, you must visit the lender's website.
While filling out the loan application online, you need to furnish personal details such as your full name and contact information. Additionally, you will have to provide your property's details, including its value, type, and the purpose for which the loan is being sought.
An important tip: Avoid providing inaccurate information while filling out the loan application, as it may lead to the termination of your LAP loan application.
#4. Upload the documents
After filling out the LAP loan application form, you must upload the following documents:
#1. ID proof such as Aadhaar Card, PAN card, Passport, etc.
#2. Address proof, such as a bank passbook or a utility bill
#3. Income proof, such as ITR, Form 16, etc.
#4. Last 6 months' bank statement
#5. A passport-sized photograph
#5. Await verification
Once you have uploaded the necessary documents, the lender will verify them. This involves verifying your income, employment status, and property details with respect to the application form and your documentation.
If everything checks out, the lender will approve your loan application, and the sanctioned loan amount will be disbursed into your account quickly.
Voila! And just like that, you can get a loan against property.
Besides a hassle-free application process, applying for a LAP loan has various other benefits.
Benefits of a LAP loan
A LAP loan is a versatile financial product that offers the flexibility to address various needs. Whether you're looking to expand your business or renovate your home, you can use this loan for anything and everything.
The best part? You can still retain ownership of your property despite pledging it as collateral. Only if you are unable to repay the loan can you use the property to settle the debt.
Moreover, LAP loans offer certain tax benefits, depending on the purpose of the loan. For instance, if you utilise the loan for business purposes, you can avail tax benefits on the interest and processing fees under Section 37(1) of the Income Tax Act.
Similarly, if you use the loan amount to purchase a residential property, you're eligible for a tax deduction of up to Rs 2 lakh under Section 24(B) of the Income Tax Act.
Summing up
Let us review the steps involved in applying for a LAP loan:
Step 1: Confirm your eligibility.
Step 2: Complete the application form.
Step 3: Submit the necessary documents.
Step 4: Await verification.
Upon approval of your application by the lender, the loan amount will be disbursed promptly to your account. This streamlined process and quick disbursement of funds make a LAP loan an excellent financial solution, especially when you require funds urgently.
If you want to apply for a LAP loan, turn to Tata Capital. We offer competitive interest rates, minimal documentation, and a hassle-free application process for loans against property.
22 May 2023
5 mins read
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