Loan Against Property (LAP)


  • Individuals, Proprietary or Partnership firms are eligible under the scheme

  • Applicant must be fully compliant KYC customer with Aadhar No., PAN Card, Mobile number seeded to Cust Id and with cheque book facility & photo.

  • Proponent should be permanent employee in Govt/semi govt/PSU/Reputed public or pvt sector co. [OR]

  • Established in business/trade/profession for at least three years

  • Persons dependent only on Agricultural Income are not eligible under LAP.

  • Purpose

  • To meet credit needs of business/trade/profession

  • To meet expenses on Education of self/family members/relatives

  • To meet expenses on purchase/construction/ renovation/ repairs/ extension of residential/commercial property.

  • Repayment of existing loans availed from other Banks/FI

  • Should not be given for speculative purpose.

  • Should not be given to builders/promotors for dealing in real estate activities/purposes.

  • Age

  • In case of salaried persons, it should be maximum 60 years, that is the age by which the repayment period is over. It is not entry age.

  • In case of professionals/businessman the above age limit can be relaxed upto 70 years.

  • In case of joint accounts age of senior person should be reckoned for age criteria.

  • Income criteria

  • Minimum monthly take away salary/income after all deductions including proposed EMI should be 40%.

  • Income of the spouse can be clubbed together.

  • For proprietary /partnership firms/company- DSCR above 1.50

  • Depreciation amount can be added back to income in case of professionals, self-employed, traders, business man only if
  • -> Their business is on proprietorship basis.
    -> They have availed loan on the assets from Banks/FIs on which they are claiming depreciation.
    ->They have availed loan on the assets from Banks/FIs on which they are claiming depreciation.
    -> Last three years’ average depreciation or depreciation of preceding year, whichever is less should be added back to income.

    Income proofs
    For salaried persons-

  • Salary certificate in prescribed format.

  • ITR return/Form No. 16 copies of last three years.

  • Latest Income tax assessment order.

  • Statement of account where salary is credited for preceding one year.

  • For businessman/professional

  • ITR returns copies along with assessment orders for preceding three years.

  • Balance sheet/Profit & Loss statement for preceding three years. (If limit is more than Rs. 10.00 Audited statements required).

  • Calculation of quantum of finance
    Type of borrower Demand/Term Loan Reducible OD
    Individual- Salaried/ Self Employed/Professional Rs.10.00 lakhs Rs. 5.00 lakhs
    Doctors- All borrowers should be doctors Rs. 100.00 lakhs Rs. 50.00 lakhs
    Others- Proprietors/ partnership firms Rs. 50.00 lakhs Rs. 50.00 lakhs

  • Quantum of finance to be related to value of security and repayment capacity of the proponent.
  • Calculation of quantum of finance

  • In case of salaried persons- 48 times of monthly average net emoluments (as per salary slip)/Form 16/ ITR.

  • In case of others- 4 times of average net annual income based on last three years’ ITRs.

  • Margin on value of property

  • Margin on value of property
  • a) Value as per Circle rate reckoned for payment of stamp duty/registration i.e. with 0% margin.

    b) 40% of market value as per valuation certificate from panel valuer i.e. with 60% margin.

    c) 50% of distress value as per valuation certificate from panel valuer i.e. with 50% margin.

  • Minimum of above values will be loan limit considered based on repayment capacity and quantum of finance allowed mentioned in point 8 & 9 above.

  • Papers to be obtained

  • Declaration from applicant about purpose of limit.

  • TSR of the property to be mortgaged from panel advocate with non-encumbrance certificate.

  • Valuation certificate from panel valuer for the property to be mortgaged.

  • Proof of payment of upto date property tax on house/flat/plot.

  • Permission from Town planning/Municipality/Local body/revenue dept in case of building.

  • Proof of title i.e. sale deed, gift deed, extract of property.

  • Security

  • The property should be self-occupied residential or commercial building or plot of land (residential/commercial) in the name of the borrower.

  • Agricultural property/land is not allowed under the scheme.

  • Equitable Mortgage of house/Flat/land.

  • Legal mortgage of land/house only if property is ancestral with permission from General Manager.

  • efilling to be done in case of EQM.

  • Third party guarantee as per stipulation.

  • CERSAI charge to be created.

  • Insurance of property to be obtained with Bank clause. Policy to be taken from New India Assurance Co.

  • Repayment terms

  • Maximum repayment period -12 years or borrower attaining 60 years of age for salaried persons and 70 for businessman, whichever is lower,

  • For DL/TL- Repayment by Equated Monthly Instalment only. No quarterly/half yearly/yearly methods allowed.

  • EMI should start from next month after disbursement normally.

  • For Reducible OD- Interest to be served as and applied. OD limit to be reduced on monthly basis.

  • Moratorium period of 6 months can be considered in deserving cases.