A loan against property is one of the most versatile and widely used secured financing options available in India. It allows individuals to borrow money by pledging a property they already own—either residential or commercial—as collateral. Unlike a home loan, which can only be used to purchase or construct a property, a loan against property is far more flexible. You can use the borrowed amount for a wide range of personal or business needs, including education, medical expenses, renovation, expansion, or even investment opportunities. Since lenders have the property as security, they generally offer higher loan amounts, longer repayment tenures, and comparatively lower interest rates. The approval process typically involves evaluating both the borrower’s financial profile and the market value of the property being mortgaged. This combination of flexibility, affordability, and high loan value makes a loan against property an attractive option for many borrowers.
What is a loan against property?
A loan against property is a secured loan where a borrower pledges an existing property as collateral to obtain funds. This loan is commonly used to meet personal, professional, or business-related financial needs because it provides access to substantial funds at relatively low interest rates.
Key features of a loan against property:
- Secured loan backed by property
- Can be used for multiple purposes
- Higher loan-to-value compared to unsecured loans
- Lower interest rates due to property collateral
- Longer repayment tenure
- Evaluation of both borrower and property
- Ownership of property remains with the borrower
LAP vs Home loan vs Personal loan
Understanding the differences between these three common loan types helps borrowers make informed decisions.
| Feature | Loan against property | Home loan | Personal loan |
|---|---|---|---|
| Purpose | Any personal/business need | Buy/construct/renovate property | Personal needs |
| Collateral | Required (existing property) | Required (property being purchased) | Not required |
| Typical LTV | Around 60–65% | Up to 75–90% | Not applicable |
| Interest rate range | Lower than unsecured loans | Lower due to secured nature | Higher |
Why consider taking a loan against property?
Individuals across India use a Loan Against Property for a variety of reasons. Some common scenarios include:
- Business expansion—fund inventory, open a new branch, or upgrade machinery.
- Higher education—finance domestic or international studies.
- Debt consolidation—combine multiple high-interest loans into one manageable EMI.
- Medical emergencies—access funds quickly during critical situations.
- Weddings or large family events—manage large, planned expenses.
- Home renovation or construction—upgrade or expand existing property.
- Investment opportunities—unlock property value to seize high-return prospects.
The advantages of loan against property include higher loan amounts due to property backing, longer tenures that reduce EMI burden, and lower interest compared to unsecured borrowing. It enables individuals to put their idle property value to productive use. However, borrowers must also proceed responsibly. Since the property is pledged, repayment discipline is essential. One should borrow only after evaluating income stability, future expenses, and long-term financial commitments. Proper planning ensures that loan against property becomes an asset rather than a burden.
Benefits of loan against property
- Substantial loan amounts: Access funding of up to Rs. 10.50 Crore* to secure your intellectual assets, invest in legal protections, or grow your business.
- Flexible repayment tenures: Enjoy repayment terms of up to 15 years*, ensuring financial stability while managing your expenses.
- Hassle-free application process: With minimal documentation and easy eligibility criteria, you can apply online seamlessly from the comfort of your home or office.
- Easy eligibility: The qualification process is simple, making loan access hassle-free.
Understanding Loan-to-Value (LTV) and other factors
Loan-to-Value (LTV) refers to the percentage of the property’s market value that a lender is willing to finance. For a loan against property in India, lenders typically offer around 60% to 65% of the property’s assessed value. For urgent financial needs, this may be slightly lower.
Factors influencing loan amount:
- Type of property—residential properties often get higher LTV than commercial.
- Location and condition—prime locations with good infrastructure fetch better valuation
- Borrower’s income profile—stable and consistent income increases loan amount.
- Credit score—higher scores lead to better eligibility.
- Existing liabilities—EMIs and commitments affect repayment capacity.
- Age of borrower—tenure is limited by retirement age.
Eligibility criteria for Bajaj Finserv Loan Against Property
- Nationality: You must be an Indian citizen residing in India with property in a city we operate in.
- Age: Minimum age: 25 years (18 years for non-financial property owners)
Maximum age: 85 years (including non-financial property owners)
*Age of the individual applicant/ co-applicant at the time of loan maturity.
*Higher age of co-applicant may be considered up to 95 years basis 2nd generation (legal heir) meeting age norms and to be taken as co-applicant on loan structure. - CIBIL Score: A CIBIL Score of 700 or higher is ideal to get an approved loan against property.
- Occupation: Salaried, self-employed professionals like doctors, and self-employed non-professionals are eligible to apply.
Documents required for Bajaj Finserv Loan Against Property
- Proof of identity/ residence - Aadhaar/ passport/ voter’s ID/ driving license/ letter from NPR/ NREGA job card
- If your current address is not the same as the OVD document provided, please share any of the listed DOVD documents. Click here to view the documents.
- Proof of income
- Property-related documents
- Proof of business (for self-employed applicants), and
- Account statements for the last 6 months
How to apply for a Bajaj Finserv Loan Against Property?
Step-by-step guide to applying for a loan against property
- Click on “APPLY” button on this page.
- Enter your 10 digit mobile number and OTP.
- Fill in the application form with your Personal Details, Business/Employment/Professional details, Property details and proceed.
- Enter your loan amount that you need, choose from our three loan variants- Flexi term loan, Flexi Hybrid Term Loan, and Term loan.
- Choose the repayment tenure - You can select tenure option of 12 month to 180 month and click on proceed.
Smart strategies and tips for borrowers
To make the best use of a loan against property:
- Borrow only what you truly need
- Use funds for productive or high-return purposes
- Compare multiple lenders for the best terms
- Prefer shorter tenure if affordable
- Maintain an emergency buffer for EMIs
- Monitor interest rates periodically
- Avoid over-leveraging property value
- Maintain proper insurance for the property
- Keep documents updated
- Review financial goals annually
These practices can help you borrow wisely and avoid long-term financial stress.
What happens if you default or want to prepay early?
Defaulting on a loan against property can lead to serious consequences. Since the property is mortgaged, repeated missed EMIs may result in recovery proceedings where the lender can take possession of the property under applicable laws. Your credit score will drop significantly, affecting future borrowing ability. For early prepayment, some lenders may charge foreclosure or part-prepayment fees. Prepaying early reduces total interest burden, but it's important to check the fee policy in advance.
Conclusion
A loan against property is a powerful financial tool that unlocks the value of an existing asset. With thoughtful planning, it can help meet major personal or business goals. Before deciding, assess your repayment capacity, compare lenders, understand all charges, and gather proper documentation. Using a loan against property EMI calculator can help estimate the right loan amount and tenure. Move step-by-step and stay disciplined with repayments to enjoy the full benefits of a loan against property.
