When you apply for any loan, you must submit certain documents to support your claim. It is a mandatory requirement. In this write-up, we list down a few essential documents you must submit to avail LAP (loan against property).
If you need quick cash to meet an emergency expense, one of the best ways to obtain the required amount is to apply for a loan against property. LAP, as the name itself suggests, is availed by providing an asset as collateral. And, since it is a secured loan, you can apply for a higher loan amount as compared to a personal loan. Today, many lenders in India offer loan again property at competitive interest rates.
The lenders typically assess the value of the propertyyou wish to mortgageand accordingly determine the maximum amount you can borrow. Also, the lenders would require you to submit certain documents to process the loan. While the document requirements may vary from lender to lender, there are a few documents that every lender would ask. Let’s look at the mandatory documents you must have to avail LAP:
For salaried individuals
- You must submit copy bank statement of last six months. The statement must reflect salary credit
- Copy of salary slips of the previous three months
- Copy of the IT returns filed (form 16) for the last three years.
For self-employed professionals and business owners
- Copy of the ITR filed of both self and the business for the last three years
- Balance sheet duly audited by a certified charted accountant
- Profit and loss statement for the last three years
- Copy of bank statement of both self and business for the last 12 months
- Copy of company registration license
- Copy of tax registration
If you pledge any real estate property against the loan, you must submit:
- Copy of the registered sales deed of the property or the lease deed or the conveyance papers
- Copy of the latest utility bills paid for the occupied/rented property
- Past sales deeds chain since the first buyer
- Latest maintenance bills
- Share certificate
Note – the above documents requirement is applicable for salaried, business owners and self-employed professionals.
Other documents (for both salaried and self-employed applicants)
- The loan application form, duly filled and signed by the borrower and co-borrower (if any) along with passport-sized photographs of the applicants
- KYC (Know Your Customer) form, duly filled and signed
- Proof of Identity (you can submit any of these documents) – PAN card, passport, driving licence, voter ID, ration card, AADHAAR card
- Proof of Address (you can submit any of these documents) – Passport, utility bills, bank passbook/bank statement, a letter from a recognised public authority certifying your residence address, copy of the sales/rent agreement, LIC policy receipt, voter ID, ration card, AADHAAR card
- Proof of existing loan (if any) – the sanction letter, EMI payment receipts
For what purposes can LAP be used?
Unlike other types of loans that are availed for a specific purpose, you can use LAP for multiplepurposes. Generally, people apply for LAP for:
- Paying children’s education fees
- Funding for children’s wedding
- Paying the down payment for any high-value product they wish to purchase
- Covering health care expenses
- Buying a new machine or equipment required for the business
No matter, for what purpose you wish to avail LAP, make sure that you have all the necessary documents handy well in advance before you approach the lender. It will not only help you complete the loan process faster but also save you from the last-minute hassles.