Eligibility

Further any individual, salaried or self employed, between the age of 21 years and 60 years is eligible to avail this loan. The only factors in which banks emphasize while extending the loan is the value of the property mortgaged. The interest rate under LAP is lower than the personal loans that are not backed by a security or guarantee. Some financial institutions make LAP available only under the floating rate and therefore borrowers need to enquire before finalizing a LAP from their lending institutions.

Documentation

In addition to the standard documents that are required to be deposited with the bank to get a loan approved, LAP demands additional documents like allotment letter of the co-operative society, agreement for sale of the property, original title deeds of the property offered for mortgage, paid receipt of latest maintenance, water tax, municipal tax and any such taxes and a non-hindrance letter from the cooperative society if your property is part of one.

LAP v/s Personal loan

Loan against property is certainly better than a personal loan as the interest rate is much lower since it falls under secured category of loans. The tenure for a LAP is usually longer than that for a personal loan and since the rate of interest is also lower, the equated monthly installments (EMIs) calculated through EMI calculator turn out to be cheaper than those of personal loan EMIs. Also one does not need to disclose the reason for which the loan is taken and further part prepayment as well as full prepayment of LAP may also be allowed without a penalty by some of the lenders.

But be aware, you should be ready to pay on your LAP and not default. You would risk losing your property to the bank if you are not able to pay off the loan.

LAP may be the best option for a borrower as it scores over other loans but it is a risky proposition for lenders at the current scenario as property prices are highly volatile.