Loan Against Property (LPA) is also popular with the term mortgage loan. This type of loan is secured because one needs to give something as collateral for borrowing it. In order to issue this loan, one needs to hold their property as a mortgage with the banks or financial institutions. However, no specific property requirement is mentioned for the mortgage; it can be commercial or residential property.

There are certain important things one needs to remember before applying for a loan against property (LPA), but the one highlighted thing to remember is that you can get 40-65% of the property value as the loan amount. If you have a property valued at around 10 lacs, your loan amount will be 40-65% of 10 lacs. Therefore, if you have more than one property, give the costlier one for collateral to have the higher loan amount.

Further, the lender will evaluate your property and select the market value for it. Ultimately on that value, the borrower will get the loan amount. Loan against property, when processed against residential property, it is mandatory that the property must be in the borrower’s name. It can be taken for personal and business usage as well.

There can be a number of reasons for which a loan against property (LPA) can be issued. Here, we have listed below some common purposes for issuing this kind of loan:

1. Marriage of son or daughter etc.

2. For any vacation like an abroad trip etc.

3. Higher studies loan for son or daughter.

4. To meet uncertain contingent liabilities.

5. Business expansion or funding.

6. For home renovation or expansion.

7. To fund emergency medical treatments and moreover.

Before lending Loan Against Property (LPA) to the borrower, the lender must check several documents. Here, in this article extract, we have listed below the required documents for raising LPA.

1: Latest salary slip. However, it applies to the salaried person.
2: Bank account statement for the last 3 previous months.
3: Government-issued documents like Pan Cards and Aadhar cards are mandatory.
4: Document to verify your address proof.
5: A copy of the document of the property that you have given for mortgage.
6: Income Tax Return (for the salaried person).

Conculsion: We have given sufficient information about the loan against property (LPA) that will help you to understand the basics about it and will also aid you at the time when you go for borrowing this loan. Further, if you have any query regarding a loan against property, do let us know and for regular information about such financial terms, keep visiting our website. We will be happy to help you.