Mastering the Application Process for Loan Against Property

Loans against property (LAP) are loans availed of by pledging real estate as security. Most lenders only accept residential and commercial properties as collateral. However, some lenders also offer loans against land. Under LAP, lenders do not place any end-use restrictions on the loan money. 

So, the borrower can use the funds to meet all kinds of personal and professional needs. The LTV ratio for these loans can go up to 75% and the maximum amount that one can borrow under these loans can go up to Rs.10 Crore or higher, based on eligibility. 

Most importantly, since these loans are loans backed by collateral, lenders sanction these loans at low-interest rates. Borrowers also have the flexibility to choose a long repayment tenor to ease the burden of loan repayment. These factors have made loans against property a popular financing option among borrowers.

 If you are planning to apply for a property loan, we recommend familiarizing yourself with the application process for loans against property to avoid any surprises and hassles.

So, here is what the loan against property application process looks like. 

1. The process of applying for a loan against property starts with finding a reliable and experienced lender. Finding the right lender for you is important and this step of the process usually takes some time. Be prepared to meet the representatives of as many different lenders as possible and request them all for loan offers. 

Once you have all the offers on the table, use a loan against property EMI calculator to compare the loan offers. In the end, choose to go with a lender who is well-trusted and is offering you the best property loan deal.  

2. The next step in the process is applying for a loan against property. These days, borrowers can apply both online and offline. While filling out the loan application form, you will be asked to share some details about yourself. So, keep all the information ready with you. 

3. After filling out the form, wait for your lender to get back to you. If they decide to sanction you a loan, they will ask you to submit certain documents. In general, borrowers are asked to submit income, address, KYC and property documents at this stage.

4. This is followed by the document verification stage. Members of your lender's team will now verify all the documents provided by you. 

Further, someone from your lender's team will also physically assess the property to be pledged as collateral. During this step, they will not only assess the physical condition of the property but also its fair market value. 

5. If you pass the document and property verification stages, your lender will release the loan against the property sanction letter. This letter will contain details of the loan offer your lender wants to make to you, such as sanctioned loan amount, rate of interest, interest rate type, loan tenor, etc. 

If you do not have objections to any of the loan terms and conditions, send a signed copy of the sanction letter to your lender. If you do not agree with some of the terms and conditions, negotiate and re-negotiate with your lender until you reach a middle ground.  

6. Your lender will now release the final loan offer. You will have to visit your lender's office to sign this loan agreement. Once the agreement is signed, your lender will release the loan money into your loan account and you will now start paying your EMIs.