Loan against property eligibility calculation

A loan against property (LAP) is a loan that is taken against the mortgage of a residential or commercial property, or plot. The property’s market value is assessed before sanctioning the loan, and the loan is given as a certain percentage of the property's current market value after successful verification. Depending on the lender, the loan amount could typically range from 40 per cent to 60 per cent of the assessed market value.

If you are in need to substantial funds, you can use the equity of your home or commercial space to raise money without having to sell your asset. You can use the loan amount for business related expenses, debt consolidation, to fund your child’s wedding, or to overcome a financial crisis. A loan against property allows you to source funds at a cheaper cost rather than going for a personal loan.

Pre-requisite: You should have a real estate asset - commercial or residential - free from encumbrance. It could be put to a productive use by mortgaging it for your financial needs. You get a significant loan amount, depending on the value of the property you mortgage. This way, you get to keep your property, which, under normal conditions, would generally tend to appreciate in market value over the years.

A loan against property is one of the more popular retail loans available in the market due to its lower interest rates. You can apply for a loan against property in any of the leading private / public sector banks and NBFCs in India.

Loan Against Property Eligibility Calculation:

Most lenders have a loan against property eligibility calculator, using which you could determine whether you are eligible or not.

In order to determine your eligibility, the following will be taken into consideration – 

  • Your age

  • Income

  • property value

  • existing obligations (if any)

  • stability of employment/business

  • prior borrowing and repayment history

 You are eligible to apply if:

  • You are an Indian Resident

  • You are over 21 years old at the time of loan application

  • You are a salaried / self-employed professional / businessman with a consistent source of income