Loan Against Property

In case you need a loan and have collateral to pledge, a great option to consider is a loan against property.

But what are loans against property? What are the features and benefits of these loans? 

Let’s find out.

What is a Loan Against Property?

A loan against property(LAP) is a secured loan provided to the borrower against his/her property as collateral. As the loan is secured, the interest rates are relatively on the lower side and the amount provided as a loan is high. 

However, this is dependent on the property that is being put up as collateral along with the borrower’s creditworthiness. Similar to a personal loan, there is no restriction on the end use.

However, if the borrower is unable to repay the loan, the lender may take possession of the property and auction it to recover the amount owed. Therefore, borrowers should borrow only what they need and ensure that they can repay the loan as per the terms and conditions.

Loan Against Property - Eligibility Criteria

The eligibility conditions imposed vary from one lender to another. However, your age, income, value of the property that is being put up as collateral, and your credit scores will matter the most.

Some of the common loan against property eligibility conditions are -

Loan Against Property - Documents Required

While documents needed to avail a loan against property will vary depending on the lender, here are some of the most important ones -

Documents Related to the Property in Question

Other documents that may be required are

How To Apply For A Loan Against Property?

Here is how you can apply for a loan against land –

Offline: You can directly approach a bank of your choice and the lender will help you with the process, documents, and application.

Online: Fill out the application form on the lender’s website, upload all the relevant documents, and submit the form. The lender will contact and assist you further.

The approval for loans against property can take up to a few weeks as the lender has to verify all the factors, from the borrower's profile to the property. 

Once the documents are satisfactorily verified by the lender, a physical inspection of the property will also be carried out by the lender’s team to verify the physical condition of the property.

After the physical verification, the lender will put a value on the property based on the documents submitted, the physical condition of the property, market value, etc., and your loan amount will be sanctioned based on this.

Benefits of Loan Against Property

Take a look at some of the benefits of loans against property

Features of Loans Against Property

Here are some of the salient features of a loan against property -

Since a loan against land is only provided against property as collateral, this loan is considered to be a secured loan

As loans against property are secured, the interest rates imposed are on the lower side as compared to unsecured loans such as personal loans

Loans against property come with repayment terms that can extend upto 25 years or so depending on the lending institution

If you have pledged your asset for a loan against property, then the ownership of the said property will still be in your name even while you are repaying the loan

Depending on the type of interest rate chosen (variable or fixed) you may have the option to pre-close your loan without having to pay a penalty. However, this will completely depend on the lending institution.

As loans against property are secured, they can be availed quite easily without extensive verification processes or multiple documentation requirements

Salaried applicants can enjoy tax benefits for a loan against property under Sec 24(B) if this loan is being used to fund their new house. However, if a loan against property is used for business purposes, the borrowers can claim tax benefits under Sec 37(1) of the Income Tax Act.

Factors Affecting Loan Against Property Interest Rates

EMIs are determined in large part by your interest rate, so getting loans with low-interest rates is the best way to manage this. Your interest rates are dependent on the factors given below -

Credit Score

Your credit score is the most important factor that determines your interest rate. With a high credit score, you can avail high amounts at lower interest rates. 

The Property to be Mortgaged

If your property is new, in an economically feasible area, and has good resale value, then you will be able to get a higher loan amount. Additionally, commercial properties will fetch a different rate as compared to residential properties. 

Loan Tenure

Longer repayment terms attract lower interest rates, but you will end up paying more over the course of the tenure. Therefore, opt for a shorter loan term and repay the loan as early as possible.

Your Profile

Another important factor that determines your loan interest rate is your profile such as your age, income, location, type of employment (salaried/self-employed), your credit history, repayment history, and more. 

The rate of interest charged on loan against property depends on multiple factors such as the credit profile of the borrower and the policies of the lender.

  • The general rate of interest charged by banks and NBFCs is in the range of 7.25% -15%. 

  • The processing fee for a loan against property can range from 1% to 3% of the loan amount plus GST

However, the interest rate charged on loan against property has a lesser rate of interest than personal loans generally as a loan against property is secured by an asset, therefore the risk is lower for the lender.

Tenure of Loan Against Property 

Since a loan against property is a high ticket loan and the amount disbursed is on the higher side, the tenure is also quite long. A loan against property maximum tenure is generally around 15 - 25 years.

Certain lenders allow the borrower to prepay the loan without having to pay a penalty. However this can depend on certain factors in addition to the lender’s discretion such as -

  • The type of interest rate chosen, such as variable or fixed rate of interest

  • Creditworthiness of the borrower

  • The amount of loan that is already repaid as well as the repayment term left

Money View Loan Against Property

One of the premier lenders in the country, Money View offers personal loans that are highly advantageous. Not only are these loans easy to avail, the documentation requirements are minimal, and the loan can be availed within 24 hours of application approval.

Loans for Borrowers with Low Credit Score

While most lenders look for borrowers who have a CIBIL score of over 750, at Money View, you can get instant personal loans even with CIBIL scores as low as 600. This is because we use a unique credit rating model that considers not just your creditworthiness but other factors as well.

Therefore, as long as your CIBIL score is 600 and above or Experian score is 650 and above, you can still get a personal loan from us.

Several lenders in India offer a loan against property at competitive interest rates. Let us take a look at some of the leading lenders and their loan against property interest rates - 

Name of Bank


Amount Offered



10.85% p.a. onwards

Rs. 10 lakh to Rs. 5 crore

Upto 15 years

State Bank of India

8.45% p.a. onwards

Up to Rs. 7.5 Cr

Upto 15 years

Axis Bank

11% p.a. onwards

Rs. 5 lakh to Rs. 5 Cr

Upto 20 years

Kotak Mahindra Bank

9.15% p.a. onwards

Rs. 10 lakh to Rs. 5 Cr

Upto 15 years

IDFC First

8.25% p.a. onwards

Up to Rs. 10 Cr

Upto 20 years

Please note that the above rates and numbers is subject to change at the bank’s discretion.

Points to Keep in Mind Before Availing a Loan Against Property

Here are certain points that you would need to consider before availing a loan against property:

  • The property being offered remains mortgaged with the lender till the loan is repaid in full although you as a borrower will still retain ownership.

  • While you will be allowed to rent out the property or utilize it yourself, you will not be allowed to make any modifications to the property or sell the property.

  • If you are unable to repay the loan on time, the property will be taken over by the lender. So, it is good to borrow against your property only if you are sure of repaying the amount on time.

There are also different types of mortgage loans or loans against property. Click here to know more about them.


A loan against property is a great option if you need a large amount of loan and have a property to put up as collateral. Since this loan is secured, the interest rates are relatively low and the loan takes time to be disbursed.

In the meantime, if you are looking for an urgent loan that does not require collateral and is disbursed within 24 hours of application approval, visit the moneyview website or download the app to apply for a personal loan now

Loan Against Property - Related FAQs

No, you will not be able to. In order to disburse loans of any kind, your income will be a deciding factor and without income proof, no lender will be able to provide loans of any kind including a loan against property.

If you are typing ‘loan against property private finance’ then we have some good news for you. You can avail a loan against property from private lenders and NBFCs as well. Banks are not the only option.

Lenders retain a margin of 20-40% of the assessed value of the property and lend for the remaining value. For eg. If the assessed value of the property is Rs. 50 lakh, and the lender decides to hold a margin of 30%, the maximum amount of loan that you can avail is Rs. 35 lakh. This decision is also based on the credit profile of the borrower. If the borrower has a good credit score, the margin retained by the lender may be lower in comparison to a borrower with a low credit score.

Yes, it is possible. Given below are some of the factors that affect loans against property.

          • Borrower’s profile such as age, location, type of employment, etc.
          • Credit score wherein higher the credit score (>750), lower the interest rate
          • If the property to be mortgaged is in prime condition and a good location
          • Loan repayment term wherein shorter the term, higher is the interest rate

          Based on how the above conditions are met, your interest rate will be on the lower or higher side.

          No, there are no restrictions. Similar to a personal loan, a loan against property can be used for a multitude of different reasons such as for education, wedding, travel, etc.

          No, a loan against property by nature is a secured loan. However, if you are looking for an unsecured loan that is quick and easy to avail, Money View personal loans are your best option. Not only can these loans be availed from the comfort of your home, you can get them within 24 hours of application approval. Visit the Money View website or download the app to apply today!

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