Loan Against Mutual Funds
A loan against property lets you borrow against a property you already own while continuing to use it. Because the loan is secured by property, lenders may offer larger amounts and longer repayment options than many unsecured loans. Through SwipeLoan, you can compare loan against property options from ₹10 lakh to ₹2 crore across 100+ RBI-registered banks and housing finance companies. You can check your eligibility online, explore available options and compare lender terms before deciding where to apply. SwipeLoan is a loan marketplace, not a lender, and the final approval, interest rate, fees and repayment terms are decided by the lending partner.
Important: because your property is used as security, failure to repay the loan can result in enforcement of the lender’s security rights, subject to applicable law.
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What Is a Loan Against Property?
A loan against property (LAP) is a secured loan in which you use a property you already own as collateral. The lender creates a security interest over the property, while you normally continue to live in, occupy or otherwise use it according to the property’s existing use and the loan agreement.
LAP is often considered when a borrower needs a larger amount than an unsecured loan may provide or wants a longer repayment period.
Common uses of a loan against property
Depending on the lender and loan agreement, LAP funds may be used for:
- Business expansion
- Working capital
- Equipment or machinery
- Debt consolidation
- Education expenses
- Medical expenses
- Wedding expenses
- Other permitted personal or business needs
The exact end-use rules depend on the lending partner
Why can LAP be cheaper than an unsecured loan?
Because the lender has an asset as security, its credit risk may be lower than with an unsecured personal loan. That can result in a lower interest rate.
However, there is an important trade-off:
A lower interest rate comes with a higher consequence if you default.
With an unsecured loan, non-payment can damage your credit profile and lead to recovery action. With a loan against property, the pledged property can also be subject to enforcement according to the applicable legal process.
What property can be used?
Depending on lender policy, LAP may be available against:
- Residential property
- Commercial property
- Industrial property
- Certain other eligible properties
Some lenders also offer Lease Rental Discounting (LRD) against eligible rental income from property.
SwipeLoan does not decide whether a property is eligible. The lending partner makes that assessment.
How Much Can You Borrow Against Your Property? (LTV)
The loan-to-value ratio (LTV) is the percentage of the property’s accepted value that a lender is willing to finance.
LTV (%) = (Loan Amount ÷ Property Value) × 100
For example, if a lender values your property at ₹1 crore and offers an LTV of 70%, the maximum loan under that LTV would be ₹70 lakh.
Example: property valued at ₹1 crore
| LTV | Maximum loan | Amount not financed |
|---|---|---|
| 75% | ₹75,00,000 | ₹25,00,000 |
| 70% | ₹70,00,000 | ₹30,00,000 |
| 60% | ₹60,00,000 | ₹40,00,000 |
| 50% | ₹50,00,000 | ₹50,00,000 |
These figures are illustrations, not promises of a particular lender’s LTV.
What affects the LTV?
Your available LTV can depend on:
Property type: Residential, commercial and industrial properties may be assessed differently.
Location: Marketability and location can influence the lender’s risk assessment.
Property age and condition: Older or poorly maintained properties may receive lower financing or may not be accepted.
Ownership and title: Clear ownership and a complete chain of title are important.
Existing encumbrances: An existing mortgage or other charge can affect eligibility.
Borrower profile: Income, credit profile and repayment capacity can influence the final offer.
The lender's valuation matters
The lender generally relies on its own valuation rather than the borrower’s estimate of market value.
If you believe your property is worth ₹1.2 crore but the lender accepts a valuation of ₹1 crore, the loan will usually be calculated using the lender’s accepted value.
That difference can increase the amount you need to arrange from your own funds.
Loan Against Property Eligibility Criteria
LAP eligibility is decided by the lending partner. The lender evaluates both your financial profile and the property.
Borrower eligibility
| Factor | What lenders may assess |
|---|---|
| Age | Minimum age at application and maximum age at loan maturity `[VERIFY partner ranges]` |
| Residency | Resident Indian applicants and, with separate criteria, eligible NRIs |
| Employment type | Salaried, self-employed professional or self-employed business applicant |
| Income | Minimum/required income according to the lender and location `[VERIFY]` |
| Credit score | Credit history and repayment behaviour `[VERIFY lender thresholds]` |
| Existing EMIs | Current debt and overall repayment capacity |
| Income stability | Employment or business continuity |
Property eligibility
| Factor | What lenders may assess |
|---|---|
| Ownership | Valid proof of ownership |
| Title | Clear, legally acceptable ownership |
| Encumbrance | Existing mortgage, charge or dispute |
| Approvals | Approved building plan and required local approvals |
| Property type | Residential, commercial or industrial, depending on lender |
| Age and condition | Physical condition and remaining useful life |
| Location | Marketability and lender's service area |
Jointly owned property
If a property is jointly owned, the lender may require all relevant owners to participate in the loan and security documentation.
Anyone becoming a co-borrower should understand that the repayment obligation may be joint.
Features and Benefits of a Loan Against Property
Large-ticket financing
SwipeLoan currently facilitates loan against property options from ₹10 lakh to ₹2 crore through its partner network, subject to lender approval and property valuation.
Potentially lower rates
A secured loan can have a lower interest rate than comparable unsecured credit because the lender has property security.
Longer repayment periods
A longer tenure can make a large LAP more manageable through smaller EMIs, although it generally increases the total interest paid.
Multiple permitted uses
Depending on the lender, you may be able to use LAP for business expansion, working capital, education, medical expenses, debt consolidation and other permitted purposes.
Continue using your property
The property generally remains in your possession while the lender retains the security interest until the loan is repaid and closed.
Overdraft-style LAP
Some lenders offer an overdraft structure instead of a standard term loan.
In an overdraft facility, you receive an approved limit and may draw funds when required. Interest is generally calculated on the amount actually used, subject to the lender’s terms.
This can be useful when your funding requirement is spread over several months rather than needed in one lump sum.
Loan Against Property EMI Calculator
(Place the interactive LAP EMI calculator here.)
A loan against property EMI calculator helps you estimate the monthly payment and total cost of borrowing.
The standard reducing-balance formula is:
EMI = [P × R × (1 + R)^N] ÷ [(1 + R)^N − 1]
Where:
- P = principal loan amount
- R = monthly interest rate
- N = repayment tenure in months
Example: ₹50 lakh at 10.5% p.a. for 15 years
- Loan amount: ₹50,00,000
- Example rate: 10.5% p.a.
- Tenure: 15 years
- Estimated EMI: ₹55,270
- Estimated total repayment: ₹99,48,590
- Estimated total interest: ₹49,48,590
This is an illustration and not a lender quotation.
LAP EMI reference table
| Loan Amount | 5 years | 10 years | 15 years | 20 years |
|---|---|---|---|---|
| ₹10,00,000 | ₹21,494 | ₹13,493 | ₹11,054 | ₹9,984 |
| ₹25,00,000 | ₹53,735 | ₹33,734 | ₹27,635 | ₹24,959 |
| ₹50,00,000 | ₹1,07,470 | ₹67,467 | ₹55,270 | ₹49,919 |
| ₹75,00,000 | ₹1,61,204 | ₹1,01,201 | ₹82,905 | ₹74,878 |
| ₹1,00,00,000 | ₹2,14,939 | ₹1,34,935 | ₹1,10,540 | ₹99,838 |
| ₹2,00,00,000 | ₹4,29,878 | ₹2,69,870 | ₹2,21,080 | ₹1,99,676 |
Illustrative calculations at 10.5% p.a.
How tenure changes the cost
For ₹50 lakh at the same illustrative rate:
| Tenure | Monthly EMI | Total interest |
|---|---|---|
| 5 years | ₹1,07,470 | ₹14,48,170 |
| 10 years | ₹67,467 | ₹30,96,100 |
| 15 years | ₹55,270 | ₹49,48,590 |
| 20 years | ₹49,919 | ₹69,80,559 |
A longer repayment tenure can reduce the monthly EMI but significantly increase the total interest paid.
Choose a tenure that leaves enough room in your monthly budget instead of selecting a long tenure only to reduce the EMI.
Is LAP Cheaper Than an Unsecured Loan?
A loan against property can be cheaper than a personal loan because the lender has security.
But the interest rate is not the only factor.
Illustration for ₹10 lakh
| LAP | Personal Loan | |
|---|---|---|
| Example interest rate | 10.5% | 16% |
| Example tenure | 7 years | 5 years |
| Monthly EMI | ₹16,861 | ₹24,318 |
| Total interest | ₹4,16,297 | ₹4,59,083 |
| Property at risk | Yes | No |
Illustrative example rates only.
The LAP example has a lower EMI and slightly lower total interest, but you are pledging property as security.
When can LAP make more sense?
LAP can be worth considering when:
- You need a large amount.
- You need a longer repayment period.
- You already own suitable property.
- The interest saving is meaningful.
- You are comfortable with the risk of securing the loan against the property.
For a small or short-term requirement, an unsecured loan may be more appropriate even if its rate is higher.
Loan Against Property Interest Rates
SwipeLoan does not set the loan against property interest rate.
The lending partner determines the rate according to its internal policy and the borrower’s profile.
The lender may consider:
- Credit score
- Income
- Existing obligations
- Property type
- Property location
- Loan amount
- LTV
- Tenure
- Loan purpose
- Fixed or floating rate
- Term loan or overdraft structure
Processing Fees and Other Charges
The interest rate is only one part of a LAP’s total cost.
| Charge | What it means |
|---|---|
| Processing fee | Charged for processing the application `[NEEDS DATA]` |
| Legal fee | Cost of legal review of property documents `[NEEDS DATA]` |
| Technical/valuation fee | Property valuation and technical assessment `[NEEDS DATA]` |
| Part-prepayment charge | May apply depending on lender, product, rate type and purpose `[NEEDS DATA]` |
| Foreclosure charge | May apply depending on the loan agreement and applicable rules `[NEEDS DATA]` |
| Penal charges | May apply when repayments are overdue `[NEEDS DATA]` |
| EMI bounce charge | Charge for a failed repayment instruction `[NEEDS DATA]` |
| Mortgage/stamp duty charges | State- and transaction-dependent |
| CERSAI registration | Applicable statutory registration charge |
| Document release charge | May apply when the lender releases security documents `[NEEDS DATA]` |
| Property insurance | May be offered or required depending on the lender and property |
| GST | May apply to eligible fees and services |
Look at the total borrowing cost
Before accepting a LAP offer, compare:
Interest rate + APR + processing fee + legal/valuation charges + prepayment conditions + total repayment
A 2% processing fee on a ₹50 lakh loan, for example, would be ₹1 lakh.
The Key Fact Statement (KFS) and loan agreement should be the final reference for applicable charges.
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Report suspected misuse through grievance@swipeloan.in or the official grievance process.
Prepayment and Foreclosure of a Loan Against Property
Prepayment rules depend on the loan structure, borrower type, purpose and applicable regulations.
For certain floating-rate loans to individual borrowers for non-business purposes, applicable RBI rules restrict prepayment and foreclosure charges. Business-purpose borrowing can be treated differently.
| Situation | What to check |
|---|---|
| Floating rate, individual borrower, non-business purpose | Check applicable RBI protection |
| Floating rate, business-purpose borrowing | Prepayment conditions may differ |
| Fixed-rate loan | Charges may apply according to the agreement |
| Company/firm borrower | Different rules may apply |
Before accepting the loan, confirm:
- Whether the rate is fixed or floating
- How the loan purpose is documented
- Whether a lock-in period applies
- The exact prepayment charges
- The exact foreclosure charges
- Rules for part-prepayment
Do not rely only on verbal information. Read the KFS and loan agreement.
What Happens If You Do Not Repay a Loan Against Property?
A LAP is secured borrowing, so default can affect both your credit profile and your property.
Generally:
- Missed repayments can result in applicable charges and affect your credit history.
- Continued default can lead to classification of the account as a non-performing asset under applicable regulatory rules.
- Eligible secured lenders may use the legal enforcement mechanisms available to them.
- In applicable cases, enforcement can include action under the SARFAESI Act, 2002.
- After following the required process, the lender may take possession of and sell the secured property.
- If the proceeds from the sale are not enough to cover the outstanding liability, you may remain responsible for the eligible shortfall.
What should you do if repayment becomes difficult?
Contact the lender before the account reaches serious default.
Ask whether any repayment support, restructuring or tenure-related options are available under the lender’s policy.
If you receive a legal recovery or enforcement notice, consult a qualified lawyer promptly.
Tax Treatment of Loan Against Property
The tax treatment of a loan against property is different from that of a home loan.
A LAP does not automatically qualify for the same deductions that may apply to a home loan.
The treatment can depend on how the borrowed funds are used.
| Use of funds | General position |
|---|---|
| Business use | Interest may be treated as a business expense where the relevant tax conditions are satisfied |
| Purchase/construction of residential property | Certain interest provisions may apply subject to applicable conditions |
| Personal expenses | The same home-loan deductions should not be assumed |
There is no automatic Section 80C deduction on LAP principal simply because a property is mortgaged.
Keep proper records showing the use of funds if you expect the borrowing to have tax implications.
This is general information and not tax advice. Consult a qualified tax professional before relying on a deduction.
Documents Required for a Loan Against Property
LAP applications usually involve two sets of documents:
Applicant documents and property documents.
Applicant documents
| Requirement | Salaried | Self-employed |
|---|---|---|
| Identity | PAN, Aadhaar, passport, voter ID or driving licence | Same |
| Address | Aadhaar, utility bill, passport or other accepted proof | Same |
| Age proof | Accepted government document | Accepted government document |
| Income proof | Salary slips, Form 16, ITRs | ITRs, income computation, P&L and balance sheet |
| Bank statements | Salary account | Business/personal accounts |
| Employment/business proof | Employment proof | Business registration/professional proof |
| Existing loan details | Statements for running loans | Statements for running loans |
| Photographs | Passport-size | Passport-size |
Property documents
| Document | Why it may be needed |
|---|---|
| Title deed | Establishes ownership |
| Previous title documents | Helps verify the ownership chain |
| Encumbrance certificate | Helps identify existing charges |
| Approved building plan | Confirms authorised construction |
| Completion/occupancy certificate | Relevant for completed properties |
| Property tax receipts | Helps establish tax status |
| Society/association NOC | Where applicable |
| Lease/rent documents | Where relevant for rented properties |
Start with the property documents
For a LAP, property paperwork can take longer than standard KYC.
If title documents are incomplete or ownership is unclear, even a borrower with a strong credit and income profile may face delays or rejection.
How to Apply for a Loan Against Property Online via SwipeLoan
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Step 1: Tell us what you need
Provide the loan amount, purpose and basic income and employment information.
Step 2: Tell us about the property
Provide details such as property type, location, approximate value and ownership.
Step 3: Explore matched options
SwipeLoan uses the available information to identify lending partners whose criteria may match your profile and property.
Step 4: Compare loan options
Review the available lender, loan amount, interest rate, tenure, fees and other applicable terms.
Step 5: Choose a lender
You decide which matched lending partner you want to approach.
Step 6: Complete the lender's verification
The lender performs the required income, property, legal and technical checks.
Step 7: Approval and disbursal
The lending partner makes the final decision and, if approved, handles the disbursal.
Why matching matters for LAP
LAP can be rejected because of the borrower or because of the property.
For example:
- A lender may not accept commercial property.
- A lender may not serve the property’s location.
- A lender may have a property-age restriction.
- A lender may not accept an existing charge on the property.
- A lender may offer a lower LTV than the borrower needs.
Understanding lender fit before making formal applications can help avoid unnecessary applications.
Because property legal and valuation checks are required, LAP should not be marketed as a same-day loan.
Things to Know Before Applying for a Loan Against Property
- Compare APR and total repayment, not only the advertised interest rate.
- Check the property’s title and documents before applying.
- Understand the LTV offered by the lender.
- Keep enough funds available for legal, valuation and other applicable charges.
- Check prepayment and foreclosure terms before signing.
- Make sure every co-owner understands the application and repayment obligations.
- Consider whether an overdraft structure is more suitable for a variable funding need.
- Check whether insurance or other optional products are included in the loan.
- Do not borrow the maximum amount simply because you qualify for it.
- Read the KFS and loan agreement carefully.
- Never pay an unofficial intermediary for guaranteed loan approval.
