Business

Loan Against Property Documents List

In India, many people confuse home loan with a loan against property and tend to use the terms interchangeably. However, these are entirely different financial products and serve different purposes. When you apply for a home loan, you don’t have the ownership of the house. Whereas, when you apply for a loan against property, you own the house, and use it as a collateral to get a loan against it.

Applying for a loan against property or LAP is an excellent way to get the funds during an emergency and you need immediate cash. Loan against property interest rates is much lower than the unsecured loan options like a personal loan or credit card loan. Also, unlike a personal loan, LAP gives you a longer term to repay the amount.

While it is easy to get a LAP, the key to getting your loan approved is to comply with the lender-specific eligibility requirements and submitting necessary documents. Here is a checklist of the important documents you must submit.

Proof of identity (you can submit any one of the following documents)

  • Aadhaar card
  • PAN Card
  • Passport
  • Driving licence
  • Voter ID
  • Employee ID issued by a state or central government

Proof of residence (you can submit any one of the following documents)

  • Utility bills (electricity bill, gas bill, post-paid phone bill)
  • Driving licence
  • Aadhaar Card
  • LIC policy receipt
  • Voter ID
  • Bank account passbook or bank account statement mentioning the address
  • Letter issued by a recognised public authority

Proof of income (you can submit any one of the following documents)

  • Pay slip of last two months
  • Appraisal letter or increment letter
  • Form 16 or IT returns filed for last three years
  • Bank account statement for last six months reflecting salary credit

If you are a self-employed professional or a business owner, you must submit documents relating to business continuity

  • Shop and establishment certificate
  • Tax registration
  • GST registration
  • Partnership deed
  • MoA or MoU (Memorandum of Association or Memorandum of Understanding)

Business income proof

  • Profit and loss statement and balance sheet duly audited for last three financial years
  • Tax audit reports
  • Current account bank statement for last six months reflecting the business-related transactions

Property documents

  • Allotment letter issued by the developer, builder, or the government authority
  • NOC (No-object certificate)
  • OC (Occupation certificate)
  • Purchase or sale agreement copy

Other documents

  • The home loan application form duly filled and signed by the primary borrower and co-applicants (in case you apply for a joint home loan)
  • A cheque drawn in favour of the lender to pay the processing fees
  • Passport size photographs

Please note – The above documentation requirements are only for illustrative purposes. The actual requirement may vary from lender to lender.

As a home loan borrower, it is paramount that you do your research well about the lender and the documents required. Make sure that you choose a lender that has a simple documentation process. Also, it is important to know about the documents required beforehand so that you keep it ready beforehand to avoid delay in the approval and disbursement process.

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