List of Documents Needed to Apply for a Loan Against Property

A Loan Against Property (LAP) is a secured loan obtained by mortgaging a residential or commercial property. You can place your house, rental property or any land that you may own as collateral for the loan. Hence, these loans are also referred to as property loans or mortgage loans. Banks and lending institutions approve an appropriate loan amount corresponding to the current market value of the property. However, the pledged property should hold clear ownership rights with no disputes or litigations against it.

List of Documents Required for a Loan Against Property

When you apply for a Loan Against Property, lenders need several supporting documents for verifying an applicant’s eligibility and for carrying out property assessment checks. There are specific documents required for a Loan Against Property, which includes:

Loan Application Form

A duly filled loan application form is the first document that lenders will appraise since it forms the basis for the subsequent verification process. The details you supply here will be validated later, so fill the form carefully furnishing accurate information.

Proof of Identity

All loan applicants are required to submit proof of identification such as Aadhar card, driving license, voter ID, passport, etc. Identity documents are a must-have to facilitate the Loan Against Property application process. Also note that Pan Card and Form 60 are mandatory documents that have to be submitted.

Residence Proof

Lenders need address proof to confirm ownership of the property where an applicant lives. This can be done through Aadhar card, voter ID, property documents, maintenance bills or electricity bills.

Income Proof

Income is a critical determinant of your ability to make timely loan repayments. Hence, one has to produce proof of income like the latest salary slips for the last three months, letters of increment or promotion, income tax returns, Form 16 and a certified letter from the employer.

Job Continuity Proof

Generally, lenders may ask for a job appointment letter, experience certificate or employment certificate as proof of job continuity.

Bank Account Statements

To indicate one’s income and current repayment pattern, salaried applicants are required to submit salary account statements for the past six months. And if you are a self-employed person, you need to show bank statements for the previous year.

Existing Loan Records

In case, you are paying off other loans, you have to substantiate it with a sanction letter of your existing loans along with their payment records. Your loan history has a strong bearing on the property loan application whilst establishing loan eligibility.

Proof of Investments

Any investments in your financial portfolio, such as fixed deposits, shares, etc., have to be presented with proper documentation for the same.

Property Documents

Lenders seek copies of the property documents during the property assessment and verification stage. They normally ask for the sale deed, agreement papers, maintenance bill, latest water tax, municipal taxes and other related papers.

Processing Cheque

It is mandatory to issue a processing cheque to begin the loan approval process. The processing fee is likely to vary among lenders.

Business Existence Proof

Individuals who own a business are required to submit relevant paperwork to prove the existence of their business. Documents such as sales deed, copies of tax registration, company registration license, etc. are accepted as proof of business. Lenders also call for audited financials, income statements, profit and loss statements and balance sheets of the company during loan processing.

Note: Additional documents may be required at the time of loan processing.