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28 SEPTEMBER, 2021

When you face a financial crunch, opting for loans can be of great help. Whether it is secured loans like home loans or unsecured personal loans, loan offerings help you fulfil your varied needs without draining your savings. However, while a home loan can be only used to purchase a house, personal loans could be expensive due to their high interest rates. In such cases, a loan against property can be significantly useful. With a loan against property, you can utilise the equity of your property and fulfil all your personal needs conveniently.

Read on to know more about loans against property and its benefits.

What Is a Loan Against Property (LAP)?

A loan against property is a secured loan where you can borrow money against your property to raise funds for your personal or business needs. You can mortgage your residential, industrial or commercial property to avail a loan against it. The possession of the property remains with the lender until you repay the loan in full. Once you have paid the loan amount, you can take back the property documents from the lender. There is no end-use of a loan against property, so you can use the funds for any purpose you like, be it a medical emergency, child’s education or marriage, wedding expansion, etc. You can get a loan of up to 50-70% of the property value, depending on the type of property.

Eligibility for a LAP

The loan against property eligibility is different for self-employed and salaried applicants.

If you are a salaried applicant

  • You must have a minimum monthly income of Rs 40,000 and above.
  • You should be between 18 to 60 years of age.
  • You should be a graduate if employed with a private limited company or partnership firm.

If you are self-employed or a professional

  • You should have an annual income of a minimum of Rs 1.80 lakhs and above.
  • Your age should be at least 21 years while applying and not more than 65 years at the time of maturity.
  • Your company/organisation/business should be operational for the last three years and should have made consistent profits for the last two years.

Benefits of LAP

  • High loan amount

With personal loans, there is a limit to the amount you can borrow. However, with a loan against property, you can avail a high-value loan by mortgaging your property. Depending on the property type and value, you can avail a loan amount ranging from Rs 10 lakh to Rs 5 crore. You can determine the loan value by entering the variables in a loan against the property EMI calculator.

  • Low-interest rate

Loan against property interest rates are much lower than that of other retail loans. It helps you borrow funds with competitive interest rates and attractive features.

  • Varied use

You can use the loan amount for any purpose as you like.

With a loan against property, you can arrange funds without selling off your property. Lenders allow you to repay the loan through flexible tenures as per your comfort. So what are you waiting for? Apply for a loan against the property today.


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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.