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A Step-by-Step Guide to the Loan Against Property Process

By IIFL Home Loans | Published On Jun 02 2023 7:21 AM 1 min read 198 views 1023 Likes
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Life can be full of surprises. Sometimes things happen that we didn't plan for. These situations might require us to spend money that we didn't expect to. But there's a solution. You can use the value of your property to get the funds you need. Whether it's for personal reasons like buying a car or for business purposes like growing your business, your property can help you. How? By getting a loan against property.

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What is a Loan Against Property?

A loan against property or LAP is a type of secured loan where a bank or financial institution grants you a loan with your property as collateral. This means that the lender will hold ownership of the property you choose to pledge, but only until you repay the entire loan amount.

This kind of loan is especially useful when you are in a time-bound crunch because the amount of the loan can usually be high and the approval time on a loan against property is usually low.

Benefits of Loan Against Property:

  • Quicker approval: Financial institutions usually approve this type of loan quickly as is it a secured loan.

  • Lower interest rates: The interest rate offered by the financial institution for a loan against property may be lower than that of a personal loan.

  • Longer loan tenure: For a loan against property, you may be able to secure a longer repayment tenure so the EMIs (Equated Monthly Instalments) are better manageable.

  • Free use: The amount you get from a LAP can be used for pretty much any purpose. Other kinds of loans may not allow you the same kind of freedom.

  • Hassle-free process: The process of applying for a loan against property as well as the internal processing is quick and hassle-free.

Speaking of the simple process, let's take a look at the loan against property process step-by-step.

Process of Loan Against Property

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There are a few steps we recommend you take before you apply for a LAP:

  • Planning: The very first and crucial step you must take is to plan out the loan. Identify your needs and the amount you will need for them. Prepare a sensible repayment strategy that fits your situation.

  • Do your research: Take some time to browse through different lenders to check which one is offering the best deal that fits all your requirements. Take this time to also select your lender. Take a look at IIFL Home Loans Shakthi Loan Against Property. We offer you flexibility and convenience through loans starting from Rs. 2 lakhs with tenures as high as 7 years.

  • Check the eligibility criteria: Once you have chosen the lender, make sure to check the loan against property eligibility criteria so you know the arrangements you might need to make to qualify for a loan with your lender of choice. Using a LAP eligibility calculator will make this step much easier for you.

  • Prepare the documents: Once you know you're eligible for the loan with the lender, check the documents required to apply for an LAP with your lender. Gather the documents you need so you don't have to run around looking for them when they need to be presented.

Now that you're well equipped with the prerequisites of the loan, let's move on to the actual LAP loan application process.

How to apply for Loan Against Property?

Step 1 : Visit the website of the lender you have chosen and fill out the online loan against property online loan against property application form with all the necessary data. Make sure to enter complete and accurate information. Any mistake in entering the details or deliberate falsification may cause your loan to be rejected.

Step 2 : Upon successful submission of the application form, a representative of your lender will likely give you a call to verify your property details and conduct a preliminary property check to confirm the property for eligibility for loan against property.

Step 3 : It is now time to upload all the documents needed for the LAP. These usually include basic documents like your PAN card (mandatory), Aadhaar card, passport and driver's licence. These documents are needed as identification as well as address proof. Some lenders may even require other paperwork like KYC documents, income statements, ITR, and property documents.

Step 4 : The next step in the process is for the lender to verify all the documents you have submitted and conduct a detailed background check on the property as well as on your status such as your credit standing, employment status, etc. This is done to confirm the authenticity and eligibility for a loan against property.

Step 5 : After successful verification of your submissions, the lender may get in touch with you to finalise the terms of the loan such as the amount, interest, repayment structure, etc. Once you're done finalising the terms, it is time to get the loan approved! Soon enough, the loan amount will be transferred to your bank account and you can go ahead and use it for your needs!

Summing Up

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A loan against property is a great way to fund your financial needs with the property you already own. Quick application, speedy approval, and high loan amounts make it a perfect choice to fulfil urgent and hefty requirements.

The range of IIFL Home Loans will help you fund all your needs. We aim to deliver an affordable and smooth loan experience with a completely online process and transparency and flexibility throughout the process. Our experts at IIFL Home Loans are always ready to reach out to help you in any way necessary through the loan process.

FAQs:

  1. 1. What is LAP?

LAP or Loan Against Property is a secured loan that financial institutions sanction with your property as collateral.

  1. 2. What can I use a Loan Against Property for?

There is no restriction on what you can use your LAP for. It can be used for personal expenses such as higher education, marriage, buying a new asset (property or car), medical expenses, etc. It can also be used in your business to clear past debt, fund expansion, restock inventory, fulfil working capital needs, etc.

  1. 3. What is the processing time for IIFL Home Loans Shakthi Loan Against Property?

If we find all documents and information to be appropriate and satisfactory, an IIFL Home Loans Shakthi Loan Against Property can be approved as quickly as 30 minutes*.

*Please note that this duration may vary at the sole discretion of IIFL Home Finance Ltd.

  1. 4. How can I calculate EMIs for LAP?

You can now easily calculate EMIs for your LAP using IIFL Home Loans online loan against property EMI calculator.

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Disclaimer: The information contained in this post is for general information purposes only. IIFL Home Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment, etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness, or of the results, etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability, and fitness for a particular purpose. Given the changing nature of laws, rules, and regulations, there may be delays, omissions, or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Home/ Loan Against Property/ Secured Business Loan/ Balance Transfer/ Home Improvement Loan/ NRI Home Loan/ Home Loan for Uniformed Services) loan product specifications and information that may be stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Home/ Loan Against Property/ Secured Business Loan/ Balance Transfer/ Home Improvement Loan/ NRI Home Loan/ Home Loan for Uniformed Services) loan.