Factors which affect Loan Against Property(LAP)


A loan against property (LAP.) is a loan that you get by pledging your residential and commercial properties. The loan can be for personal or business use. People choose Loan Against Property for various reasons. It is a secured loan, and it has many benefits—for example, Low-interest rates, higher borrowing limits, and longer repayment terms. 

Bank records your property as insurance for the loan. You can get a loan at a certain percentage of the market value of your property. 

There are many factors that affect the LAP. In this article, we are going to look at them step by step. 

Credit Score:

Preserving the credit score is a need for any bank loan. If it’s a cyclical credit card bill or loan repayment, regularity pays well.

A credit score provides details about the customer’s current condition, whether the consumer has bankruptcies, convictions, or collections. A score above 750 is an ideal score for taking a loan. A credit score below 300 is a poor credit score. 

Property Documents: 

The person who is taking the loan must have all the documents related to the property. You can take a LAP on the house on which the loan is due. (the building, you took on a home loan). One can ensure if all the papers are in order until he/she applies for a LAP. It involves title deeds, construction designs, permits by relevant bodies, registration, etc. 

Loan Tenure: 

Your period of maturity is the term of the authorized loan. Repayment mandate and EMIs go hand-in-hand. At the same time, longer-term choices can result in smaller EMI amounts. Select a short repayment tenure of higher EMIs. Whether you have stable, rising profits and a tight budget. To encourage quicker repayment, interest rates on such tenures are lower. For those choosing a shorter maturity, banks offer attractive interest rates. 

A longer-term lets you use the loan with lower EMIs. For low income, you can still choose for longer tenures. These loans have a shorter term than a typical home loan. 

Age of the borrower: 

For applying for LAP, banks ask for age proof. After all, it plays a role in determining facts like the ability to pay. The creditor must repay debts before hitting age 65 if the borrower has passed the retirement age. In certain cases, you should pursue loans of shorter length, resulting in higher EMIs. 

Regular Flow of Income: 

One of the key reasons being that the borrower must have a stable and reliable source of income. It is important to ensure that the borrower will repay the EMI. Banks often ask for the income statements of past years to check your income. 

Rejection of a Previous Loan Application: 

Often, banking firms and payment intermediaries maintain track of previously-rejected loan applications. Yet, these differ from loan to lender. Each bank has its own internal policies to assess creditworthiness and risk ranking. If your loan is denied, your credit profile verification may show. It hampers your chances of receiving loan acceptance. Thus it is important to take an analytical view of the case, to figure out the cause for the rejection, and to heal it. 

Insurance of the Property: 

Mortgage policy protects debt redemption, reducing the family’s strain. It also reduces the borrower’s chance of adverse situations. It’s still advisable to use home insurance to cover the financial interest. 

Delays in Repayment of Loans:

The creditor will determine your loan availability depending on your condition. They will check the paperwork that you send. The above explanations will help mark your qualifying conditions for a LAP. 


Many factors affect the Loan Against Property. Check your CIBIL score, because it is very important for banking needs. The individual taking the loan must have all the property-related documentation. It is important to ensure that the borrower will repay the EMI. Mortgage policy protects debt repayment, reducing family burden. Keeping these tips in mind, you can go ahead with your loan procedures.

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