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Step By Step Guide to Know How Loan Against Property is Processed!

Do you have a big-ticket expense coming soon? Are you short of funds to cover the costs? Why not use the value locked up in your property? Some lenders take your property as collateral and lend you the required money against it. 

Since it is a secured loan, you can avail it at a lower interest rate than unsecured loans. You don’t need to lose your property to avail of a loan since you regain its ownership as soon as you repay your borrowed amount.

Technically known as a loan against property, this loan type allows you to use the money locked in your property’s value. Are you looking forward to taking a secured loan against your property? Here is a stepwise guide to tell you how it is processed.

Guide to Know How Loan Against Property is Processed

Step 1: Compare Lenders

First and foremost, you need to select the right lender according to your requirements. You will find hundreds of lenders offering LAPs. Compare them based on their loan amount, interest rates, repayment terms, customer service, processing fees, additional charges, and other factors. Once you finalise the lender, move forward with the application procedure.

Step 2: Calculate Your Loan Amount 

Before applying for a loan, a loan-to-value calculator helps you calculate the loan amount you are eligible to avail. Your loan-to-value depends on the value of your property. Enter your property’s market value, monthly income, existing financial obligations, interest rate, and repayment tenure. You will calculate your loan amount based on these parameters.

Step 3: Calculate Your EMIs

A loan against property EMI calculator allows you to calculate your EMI amount according to the repayment tenure you choose. Most lenders have flexible repayment terms that borrowers can select depending on their repayment capacity. The longer the repayment term you select, the smaller the EMI amount will be, but higher the interest outgo. Therefore, make a repayment plan and select a loan term with EMIs suitable to your budget.

Step 4: Check Eligibility

Most lenders have easy eligibility conditions that prospective borrowers can fulfil easily. Most importantly, you must be a salaried employee, a self-employed professional, or SME owner to avail of a loan against your property. If you meet this requirement, other eligibility conditions you must fulfil are related to your age, income, repayment capacity, employment, etc.

Step 5: Start Filling the Application Form

Once you know the loan amount and decide your loan tenure, visit your lender’s website and find their ‘loan against property’ section. Choose the loan type you want to apply for, and select whether you are a salaried employee or a self-employed professional. Enter the details required by the lender, including your personal details, contact information, employment specifics and bank details.

Step 6: Scan and Upload Your Documents

Although lenders have minimal documentation requirements these days, you must provide essential documents to prove your identity, income, and employment. To support the details you provide, upload documents like your identity, address, and age proof. Upload your last six months’ bank statements to prove your income. 

Salaried employees must provide their salary slips, and self-employed professionals and SMEs must upload their audited financial statements. Other documents may include your income tax returns, form 16, and a check for the processing fee. 

Since LAP is a secured loan, you must also provide your collateral property’s papers. The property you are pledging as collateral should have a clear title deed without any encumbrance. This means that the property should not have any existing loan, mortgage, or litigation against it.

Step 7: Submit Your Application

Once you provide the required details and documents, submit your loan application. You will receive an instant confirmation about your eligibility. If you are eligible, the lender’s customer representative will call you to discuss the next steps.

Step 8: Make a Repayment Plan

Your loan repayment period starts in the month subsequent to availing of the loan. Therefore, once you receive your loan amount and fund your expenses with it, start budgeting to pay your EMIs on time.


You may avail a loan against property to cover the costs of any big-ticket expenses, including a wedding, medical emergency, home renovation, business expansion, and so on. Follow this step-by-step guide to apply for a LAP and get the value sealed in your own assets.