Loan Against Property

loan againstr property

Loan Against Property

Expansion of business is desirable to every businessperson. Your business requires funds for its growth. At times, owner’s own money is not enough to expand the business and even the profits accumulation is not that high to let you maximize your business potential. For expansion you look for loan. An efficient management of loan helps in increasing business operations which is the basic need of every entrepreneur.

There are different ways of borrowing funds like Project Loan, Home Loan, Overdraft limits, LAP etc. One of the ways is to secure funds is Loan Against Property. Borrower is the person who takes loan who can be an individual or a business firm/company. Lender is the person who gives loan which can be a Bank, NBFC (Non-Banking Finance Company) or even a private lender.

LAP is a loan which is taken on a property. The borrower here gives his/her property papers to the lender who gives a loan amount at certain percentage rate of interest to be paid back on agreed intervals of time. This giving of property papers as a security for loan is called mortgage.

Properties Covered

LAP can be taken on properties like:

► Industrial properties – Factories, Warehouse, Processing units
► Commercial properties- Malls, Shops, complexes, Office building, hotel building
► Residential properties – Residential homes, flats, apartments, individual houses
► Other properties like Schools, Hospitals, Cinema halls etc.
► LAP can also be taken against Land. It must be non-agricultural land.
► Agricultural property is not considered for LAP, as agricultural property is not mortgage able.
► Unbuilt or under construction property – Banks/ NBFC have a list of approved builders. If an under construction property is being built by an      approved builder, then LAP is possible. However, if it is being built by an approved builder, the property must be 90% complete for obtaining a      LAP. Percentage of completion is certified by an architect.

Who can be a borrower of LAP :-

► Anyone can be borrower of LAP be it an individual person, Proprietor, Partnership firm, LLP, Companies etc. The only important condition is to      establish rightful ownership of the property.