Home >> Frequently Asked Questions (FAQ) >> FAQ on Retail Products >> FAQ on Loan Against Property

FAQs on LAP (Loan Against Property)

1. What is a Loan against Property (LAP)?

A Loan against Property, as the name suggests, is a loan facility where you can mortgage your property as a security. This type of loan provides borrowers with the flexibility to utilize the value of their property to meet their financial needs. The loan amount sanctioned is a percentage of the property's value, and it can be used for a variety of purposes such as business expansion, marriage, travel, higher education, medical emergencies, debt consolidation and more except for speculation purpose.

2. How is the Loan Amount determined? Can I Get 100% Loan on property?

The loan amount is determined based on the value of the property proposed for mortgage and the income of the applicant/s (Find here income eligibility under Calculator). IOB offers loan amount up to 50% on the forced/distressed value of the property. It is important to note that bank's approved lawyer will do the property title clearance & IOB's approved valuers to determine its current market worth (Market value & Forced Sale Value) of the property proposed for mortgage.

3. Who all are eligible for availing LAP (Mortgage Loan)?

Individuals:

Salaried Employees/ Self-Employed/ Businessman/ Professionals. Non-Resident Indian (NRI), Person of Indian Origin (PIO), except national of Pakistan and Bangladesh, Overseas Citizen of India (OCI), holding valid OCI Card and valid Foreign Passport.

Non-Individual Entities:

1. Private Ltd Company and Unlisted Public Ltd Company

2. Proprietorship, Register Partnership Firm and Limited Liability Partnership Firm

3. Trust and Society

The Loan for Non individual is considered for their core activities and for meeting financial commitments related to business.

4. What is the Salary & Income criteria for availing LAP (Mortgage Loan)?

Minimum Gross Monthly Salary of Rs. 30,000/- for Salaried and Minimum annual net income of Rs. 3,00,000/- after deduction of tax, existing and proposed deductions for LAP in case of Self Employed/Businessman/Professional.

For NRI/PIO Applicants who are salaried the minimum gross monthly income is Rs. 50,000/ and the minimum income is Rs. 5,00,000/ after deduction of tax, existing and proposed deductions for LAP in case of Self Employed/Businessman/Professional.

LAP (Mortgage or Property Loan) without income proof is not accepted.

5. What is the minimum & maximum loan amount that can be availed under LAP scheme?

Minimum & Maximum loan amount for Individuals -10 crore & 20 crore respectively.

Minimum & Maximum for Non- Individual borrowers -10 crore & 40 crore respectively.

6. What kind of properties are can be mortgaged for availing LAP?

Properties may be Residential, Commercial or Vacant Plot situated at metro, urban, semi urban or rural centres. The loan may be considered for self-occupied as well as let out properties. However, the title of the property to be clear and property to be enforceable under SARFAESI.

7. Whether I can add my close family relative as co-borrower as the property is in his name?

Yes, however age criteria will apply, if his income is not taken into account for repayment. In case if the age of such applicant is more than 75 years then all his/ her legal heirs to join as co-borrower or guarantor.

8. What is the minimum and maximum repayment tenure of LAP?

Minimum tenure - 12 months

Maximum tenure

9. What is the age criteria for availing LAP?

Individual Borrowers:

Entry age is Minimum 20 years & Maximum 60 years

Repayment can be considered up to the age of 70 years of the borrower

Non-Individual Borrowers:

The entity should have been established and in the same line of activity for the past 3 years

10. What are the documents required to avail LAP?

Documents for Salaried person

Employee ID card, Last 6 months salary slip, last 12 months bank account statement showing salary credit, duly acknowledged copy of last two years Income tax returns with computation sheet.

Documents for non- salaried/businessman/professionals

Last two years Audited/CA certified balance sheet & P&L accounts, duly acknowledged copy of last two years Income tax returns with computation sheet, Address/Registration certificate/Tax registration proof of business such as GST etc.

11. What is the interest rate of LAP?

IOB offers one of the Lowest and best Loan Against property Mortgage loan interest rate in India. Interest rate for LAP begins with RLLR+0.50% (9.85% presently) p.a.. Refer Interest rate page for more information.

12. How to apply for LAP?

The customer to approach his/her nearest IOB branch for availing this loan.

13. What is the minimum Credit Score?

Minimum to be 600. Deviation on case-to-case basis will be considered

14. Whether IOB  finance LAP on Residual value of house property?

Yes. We finance against Residual value of House property to our existing Borrower having satisfactory track record.

15. Whether the LAP can be taken in the form of Cash Credit?

Yes, it is considered for salaried borrowers.