What is the procedure for Loan Against Property

Author : kavitapandey
Publish Date : 2021-04-30 06:10:02
What is the procedure for Loan Against Property

How To Apply For A Loan Against Property

One of the loans that are growing in its popularity today is the Loan Against Property (lap). In this type of loan, salaried and self-employed professionals can mortgage their residential or commercial properties to get a loan.

This is a good alternative to a personal loan, as lap loan interest rates are more attractive, can be used to fund a host of expenditure types, and also comes with certain tax benefits.

Typically, lap loan may be used to fund education, weddings and family gatherings, travel, redecoration, and the purchase of high-cost consumer durables. 

These days the combination of technology and the redesign of financial products have simplified the process of applying for such a loan. Here are some key steps to follow in case you have decided to apply for one.

Are You Eligible?

To be eligible for a loan against property, you should either be a salaried employee or a self-employed professional. Your age should not exceed 60 years if you are a salaried employee and 65 years if you are a self-employed professional at the time of loan maturity.

Stay Safe And Apply Online 

The safest way to apply for a Loan Against Property, in today's times, is to visit the service provider's website, fill in your details, and request a callback. The other alternative is to locate a physical bank branch near your home, but with the pandemic still looming large, the first option is your safest bet. 

Understand The LAP Details

When taking any loan, it is important to understand all the guidelines so that you can make an informed decision. Here are the key factors to keep in mind: 

  • Understand what the maximum loan amount that you are eligible for based on the valuation of your property is. Other factors that influence this aspect include income, age, qualification, and occupation.
  • The lap loan interest rates depend on your credit score as well the type of property - residential or commercial, as well as whether you are a salaried employee or self-employed professional.
  • Typically, loan repayment happens in Equated Monthly Installments (EMI) comprising of principal and interest through Post Dated Cheques/ Electronic Clearance System over a maximum period of 20 years.
  • lap loan providers also recommend getting properties and the loan repayments insured to protect you from the risk of any unfortunate events during the loan repayment tenure .

Keep Your Documentation Ready 

Make sure all your paperwork is in place before applying for your Loan Against Property. These are the typical documents required:

  • Duly filled Application Form with Photograph.
  • Age Proof (PAN Card, Passport, Any other Certificate from Statutory Authority).
  • Residence Proof (Passport, Driving License, Telephone Bill, Ration Card, Election Card, Any other Certificate from Statutory Authority).
  • Education Qualifications – Latest Degree.
  • For salaried professionals, latest salary-slips for three months; for self-employed professionals certificate & proof of business existence along with a business profile.
  • For salaried professionals, Form 16 for last two years; for self-employed professionals, last 3 years Income Tax returns (self and business) with Profit & Loss Account & Balance Sheets duly certified/audited by a Chartered Accountant.
  • For salaried professionals, last 6 months Bank Statements(salary account); for self-employed professionals, last 12 months Bank Account Statements (self & business).
  • Photocopy of Title Documents of the Property, Approved Plan.
  • Processing Fee Cheque in favour of ‘PNB Housing Finance Ltd.

Once you have submitted all the necessary paperwork, your service provider will review all the documents and come back to you on whether everything is in order. If it all checks out, you could be the beneficiary of the LAP. 

Category : business

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