ABC of Loan Against Property
What is LAP?
Loan against property is a loan which you avail by keeping your
commercial/residential/industrial property as collateral. It is also called a secured loan
as the property owned by the applicant is the security for this loan. The amount of
potential loan will be sanctioned depending upon the value of your property.
LAP is a great option to acquire funds at a lower cost and simultaneously make use of an
idle asset that you already own without the need to sell it off. However, the property
kept as a mortgage for Loan Against Property needs to be free from any legal and
financial issues.
Entrepreneurs avail a loan against a property for several reasons. It can be availed to
expand your business, purchase a new property, renovate an existing property, loan
consolidation, and business or working capital requirement.
The financers, be it a bank or an NBFC, look into your income details, savings,
employment track, and other aspects before coming to disbursement. Your property or
collateral is evaluated according to the current market value and correspondingly, the
loan amount is computed. Getting a loan against property becomes much more
simplified and speedier if you have all the basic documents in place.
Why should entrepreneurs go for Loan against Property when they have other
options available?
• The loan tenure of LAP is generally long which makes the EMI more comfortable and
there is also the option of liquidating your money in the case of any big expense. Long
term tenure means easy repayment.
• The existing property that you own acts as a collateral, so no other collaterals like any
bonds, stock, etc are required to be pledged as collateral security for the loan against
your property.
• LAP is widely available. LAP can be obtained from any leading banks and NBFCs. Once
you get to know about the eligibility criteria, requisite documents, and other details, you
can start the application process.
• A Loan Against Property typically takes 7-10 days for disbursal of the loan amount.
Given the high amount, it can be availed in the most hassle-free way to fund your
financial needs. A careful and planned approach should help you see through quite
What are the essentials of LAP?
 Good financial record:
Before approving a loan, financial institutions check payment-track records and
repayment ability of the applicant. If you have other loans or existing liabilities, your
eligibility for another loan may reduce. Some lenders also take into consideration the
number of dependents in the applicant’s family, as more dependents are considered as
lower repayment capacity.
 Undisputed property:
Also, if the property being offered as collateral is disputed, there are chances that your
loan application will not be accepted. Sometimes a loan request is not accepted if the
property taken as collateral is under dispute or the property papers are not clear about

 The property value
Whether you intend to apply for a loan against property on the
residential/commercial/industrial property, you should know the monetary worth of
the concerned estate. The sanctioned loan amount cannot exceed the property’s value.
But you can get up to 70% of the property’s market value as a loan. If your loan
requirement is higher than the property’ value, you will need to consider other
financing options in combination. In this case, however, you may be eligible for a lower
loan amount.
Electronica Finance Limited is a leading NBFC in India, which offers LAP to raise money
with your own property which can be mortgaged. It helps you use your free property to
take a loan that can be used for business expansion, working capital, or acquiring
business assets.
EFL offers LAP  up to 70% LTV ratio and amounts up to 1 Cr. Interest rates are
customized according to the customers’ profile. They come with speedy approvals,
flexible repayment options, relatively easy documentation.
If your CIBIL score is 600 or above, business vintage is more than 3 years and turnover
is more than 1 Cr, you can avail LAP from EFL. The above parameters will improve the
chances of getting a loan, but they are not mandatory.
Essential documents:
 3 years balance sheet and ITR
 12 months bank statements of all banks
 GST returns for the current year
 KYC - Aadhar card and PAN card
 Residence and factory ownership proof

Moreover, you can apply for EFL LAP on EFL’s online customer portal, which means you
can safely apply without visiting a branch. With EFL’s loan against property, you can
fulfill your entrepreneurial dreams utilizing your own property!
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