• Age Proof
• Address Proof
• Income Proof of the applicant & co-applicant
• Last 6 months bank A/C statement
• Passport size photograph of the applicant & co-applicant

Loan Against Property

A loan against property (LAP) gets you capital based on the value of your property. It is available for both salaried and self-employed persons and against commercial as well as residential property. All this and, you don't have to sell your property to raise the capital. It's all yours to keep if you repay the loan taken.

Steps involved in the application process are:

• Application
• Processing
• Documentation
• Sanctioning of the loan
• Valuation and legal check
• Disbursement

Detailed list of documents required

Proof of income : Copies of last three years income tax returns (along with copies of Computation of Income/Annual accounts, if any), Form 16/Form 16A, last three months salary slips, copies of the last 6 months statements of all the active bank accounts that reflect your salary/business income details etc.
Age proof : Copy of the school leaving certificate/driver's licence/passport/ration card/PAN card/voter identity card etc. Address proof : Utilities bills, such as phone and electricity bills, need to be provided to prove that you are actually staying at your current address.
Identification proof : Documents with your photograph.Sometimes, one document, if it contains a photograph, the current residential address, and the correct age can be the proof for all three mentioned above.
Employment details : If your company is not well-known, a short summary about the nature of the company, its business lines, its main customers, its competitors, number of offices, number of employees, turnover, profit, etc. may be needed. Usually, the company profile that is available on the standard website of the company is enough.
Property papers : The bank may require title deeds and other documents relevant totheproperty. This will be important as the loan can be taken only against free-hold property. Also, it can be only about 40-60 per cent of the cost of property. It is important for the bank to establish the value of the property and its legal status before the offer can be considered.
Loan sanction is the next process in the series. At this stage, the bank has checked your financial credentials based on criteria such as your income, age, qualifications, experience, employer, nature of business (if self employed), etc. They work out the maximum loan eligibility, and an indicative loan amount that the bank is willing to offer.
Offer letter/Sanction letter : The bank now sends you an offer letter with details relevant to the loan. If these terms and conditions are acceptable to you, you can sign an acceptance copy.
Valuation and legal check on property and papers is the next stage where the focus of the bank will shift to the property that you intend to mortgage. Make sure the property papers and the relevant NOCs are in place. The bank's lawyer will check the property papers for their legality. The bank may also send an expert to visit the property. This expert could be a bank employee or an associate with a realty firm.
Once the bank has ascertained all that it needs to be assured of you as a client, the property as a security, and your repayment capacity, it will disburse the loan. The bank does not enquire about the purpose for which you usethe loan. Though, it stipulates that the loan should not be utilized in speculative activities.
If you can spend a little more time in processing and documentation, a cheaper loan than Personal Loan (PL) is a Loan against Property (LAP).
LAP is a personal loan given by mortgaging your house property. The loan is given as a certain percentage of the property's market value, usually around 40-60 per cent. LAP interest rates are cheaper by 3- 4 per cent compared to personal loan rates.

Documents are required for applying for a loan against property.

Most banks and financial institutions typically require the following documents. However, this list may vary from bank to bank.

Disclaimer : The actual rate(s) offered to you might differ from the ones quoted here. The above information has been collected from market sources and the authenticity of the same is not guaranteed by Money Dalal.

Cash Credit Limit

A secured working capital loan, given on the basis of turnover and debtors and creditors and stock in hand, security of property required.

Brief introduction about cash credit limit :

• The best features interest is charged for actual usage period, flexibility if business increases the limit can be enhanced, interest savings as all the dealings being done thru bank and get credit benefits.
• No fixed repayment arrangement giving you flexibility and greater control over your day-to-day finances.
• Interest is only charged on the amount of credit used.
• You can apply for a temporary, permanent or seasonal limit depending on your needs.
• No minimum monthly repayments.
• A cost-effective option of avoiding fees associated with overdrawing accounts. Transactions will be honored up to your approved limit, across all banking channels.

Since it’s a line of credit, it is also ideal for those situations when you need extra money. When you’re short on cash, you can write yourself a loan by taking advances up to your pre-approved limit.

Eligibility Method (CC Limit)

Following are the few of the loan eligibility methods which most of the banks followed. The actual amount can vary from the bank to bank on the basis of their internal policies and decisions.

Income Basis : On the basis of Profit and Loss Account and Balance Sheet.

Business Turnover Method : Through this method bankers calculate the average profit of the business as per industry average or as per the normal circumstances and arrive at a percentage of net profit of their own.

Eligibility Criteria : Available only for businessman on the basis of sales turnovers, stock, debtors and creditors

Loan Details (CC Limit)

1. Loan Amount

Minimum loan amount for Cash Credit Limit is Rs. 10 Lakhs

2. Rate of Interest (ROI)

It varies from 13.50% - 14.50%. Higher the risk higher the rate of interest and vice-versa.

3. Processing Fee

A processing fee of 0.05% to 3% of the loan amount is payable upfront. This fee will be deducted from the disbursal amount payable to you.

4. Documentaion

Below Appended is the list of Documents Required for the Cash Credit Limit :

• 3 years Profit & Loss A/c, Balance Sheet, Audit report if any.
• All loans details taken in the name of business.
• Property details to be offered to pledge.

5. Loan Process (CC Limit)

• A normal loan process hardly takes anytime. It is an instance process.
• Normally, it takes 0 to 3 days from application submission to disbursement.
• Loans get sanctioned between 0- 3 working days if all the documentation and other forms, submitted, are in order.
• Loan applicants are requested to furnish the complete information timely.

6. Loan Fundas

Below mentioned are some of the logics or fundas about loans which gives us a fair idea about loan eligibility or how it is calculated & increased

a. Loan Funda No 1

Loan On The Basis Of Itr/ Salary/ Form 16 Or 16a Or Annual Income. One Can Expect A Loan Equal To Emi One Half Of Monthly Income.

Monthly Income (MI) For Businessman MI= 1/12*(Net Profit As Per ITR + Interest To Partners/ Directors + Interest On Unsecured Loans + Depreciation)

Monthly Income For Salary 100% Of Fix Monthly Component + 50% Of Variable Components Such As Bonus, Commission Etc. Which Is Not Fixed By Its Nature

Applicable To Business Loan, Home/ House Loan, Personal Loan, Loan Against Property, Car Loan, All Emi Base Loans

b. Loan Funda No 2

Home Loan For Businessman Or Property Loan For Businessman On The Basis Of Running Emi’s, If Emi Paid Are >= 9 Or 50% Of The Total Tenure.

Any Businessman Can Take A Loan Equal To Total Of All Emi *1500, If Emi Paid Are >= 9 Or 50% Of The Total Tenure.

All Or Few Existing Running Loan May Be Asked To Close Or Bank Will Repay First Those Loan And Balance Will Be Given To The Borrower

c. Loan Funda No 3 In Case Of Property Loan Such As Home Loan Or Loan Against Property The Loan Eligibility Can Be Increased/ Enhanced By Clubbing Income Of Maximum Three Persons

Which Can Be Family Members In Tree/Chain Or
Co Partner In Business Or
Co Partner In Property.

d. Loan Funda No 4

Loan Under Liquid Income Proof (Lip) Programme

Liquid Income Proof Stands For Actual Activity Or Business Being Done By A Businessman. Wherein The Banker’s Official Assesser Evaluate The Repaying Capacity Of A Businessman By Visiting His Place Of Business, Shop, Office Or Godown Etc.

On The Basis Of The Report The Loan Is Granted.

Under Lip Programme No Itr (Income Tax Return) Is Required