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Published on Mar 27, 2020Updated on Oct 14, 2026

Owning land instills a feeling of ownership and pride. It also brings a lot of happiness along with a sense of joy and achievement for the land owner. Other emotions that also play a key role are a great sense of security and peace of mind.
India is a country where owning a piece of land fulfills lifelong dreams. Other than the fact that you can build your dream home on this plot of land, it can be used in your times of need as well. These days, a number of lenders offer loan against plot to anyone who owns a piece of land and would like to use it as collateral for securing a loan. A loan against land can be used to construct homes, develop a factory or build commercial business plants on the pledged plot of land. Here are some things you need to know before applying for this product.
Must Read: How to Get Tax Benefits on Loan Against Property
A loan against property (LAP) is a type of secured loan in which the borrower promises their property as collateral in order to collect funds from the lender. The property can be either residential or commercial, and the loan amount is commonly calculated as a percentage of the property's worth. Loan Against Property often have lower interest rates than unsecured loans since the lender assumes less risk as a result of the collateral. LAPs can be utilized for a variety of goals, including business growth, education, marriage, medical costs, and debt reduction. If the borrower fails to repay the loan, the lender has the authority to seize and sell the property in order to reclaim the due amount.
The following are the features and benefits of a loan against property (LAP):
Before you make your application with the lender, make sure that you have done the necessary research towards your loan against property eligibility check. Here are some of the general eligibility criteria
Must Read: Loan Against Property in Delhi
Here is a list of documents required for loan against property
|
Document type |
Salaried person |
Self-employed person |
SME/Firm |
|
Identity proof |
Passport Copy / Voter ID card / Driving License / PAN Card |
Passport Copy / Voter ID card / Driving License / PAN Card |
GST Registration / KYC of partners / PAN card of Directors / Company PAN Card |
|
Address Proof |
Ration card / Telephone Bill / Electricity Bill / Rental agreement / Passport copy / Passbook / Driving License |
Ration card / Telephone Bill / Electricity Bill / Rental agreement / Passport copy / Statement / Driving License |
Electricity bill / Rental agreement / Passport of Directors or Partners |
|
Age proof |
PAN Card / Passport / any other certificate from a statutory authority |
PAN Card / Passport / any other certificate from a statutory authority |
- |
|
Income proof |
Account statements / last 6 months’ salary slips / passbook |
Account statements / last 6 months’ salary slips / passbook |
ITR for the past 2 years / Balance sheet for the past 2 years / P&L statements / GST Returns |
|
Additional documents |
|
|
Audited financials for the last 2 years |
Also, remember to calculate your eligibility to avail the loan with the help of online loan against land calculators. You can also use SMFG India Credit’s free online Loan against Property Calculator for this purpose.
Must Read: Types of Mortgage Loans In India
Applying for a loan against property (LAP) can be a simple procedure. Here are the five simple actions to take:
It is critical to examine several LAP offers from various lenders in order to select the one that best meets your needs. When signing the loan agreement, make sure you understand the terms and conditions, including the interest rate, processing fee, prepayment charges, and foreclosure charges.
Must Read: Loan Against Property Interest Rates
Here are some factors to keep in mind while applying for a loan against property (LAP):
Important Note: This article is for general informational purposes only and may be subject to change from time to time. As product features, eligibility criteria, interest rates, charges, fees, tenures and other terms may be revised as per SMFG India Credit's policies, readers are advised to refer to the latest details from the respective product pages (please select from the top menu). For the latest loan charges, please visit Charges & Fees Link and for the latest Interest rates, please visit Interest Rate Rationale. Please note that final loan terms, disbursement process and eligibility criteria will depend on SMFG India Credit's policies at the time of loan application.
The content of this article is for information purposes only and does not constitute as, an offer or advise to avail any products or services from, or, a commitment to grant any loan by the company. It is not intended to create any rights or obligations against us. All content is provided "as is" without any warranty of any kind, either express or implied & we disclaim any warranty or representation, whatsoever, in regards to the content. Please refer to the Privacy Policy of the company to understand the use, processing and storage of your personal data.
You would be entitled to a tax exemption of up to INR 1,50,000 per year if you purchase land. The title transfer fees for the plot and the registration fees are also included in the exemption limit if paid in the year in which the property is built.
The interest rate on a loan against property (LAP) from SMFG India Credit is determined by a number of factors, including the loan amount, loan tenure, borrower's credit score, and property value.
A loan against property (LAP) does not fall under the purview of Section 80C of the Income Tax Act. Only certain investments and expenses, like life insurance premiums, Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), and home loan principal repayments qualify for Section 80C deductions.
Without proof of income, it may be difficult to obtain a loan against property, as lenders often require income verification as part of the loan application process. Other lenders, however, may provide LAPs depending on the property's valuation as well as other considerations such as credit score and current assets.
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