Finance Against Property

What is Finance Against Property (FAP)?
Finance Against Property (FAP), also known as Loan Against Property (LAP), is a secured loan offered by banks and financial institutions, where borrowers use their owned property (residential, commercial, or industrial) as collateral to obtain funding. The loan amount is typically a percentage of the property’s market value, usually ranging between 50% to 75%.

Key Features:

• Secured Loan: Requires collateral in the form of property.

• Usage Flexibility: Funds can be used for personal needs (weddings, education), business expansion, medical emergencies, or debt consolidation.

• Lower Interest Rates: Compared to unsecured loans, FAP has relatively lower interest rates.

• Longer Tenure: Repayment terms can go up to 15–20 years.

• High Loan Amount: Depending on the property value, you can avail higher loan amounts.

• Ownership Retained: You continue to own and use the property while repaying the loan.

Eligibility Criteria:

• Salaried individuals, self-employed professionals, and business owners.

• Valid ownership of the property.

• Sufficient income and credit history to meet repayment requirements.

Documents Required:

• Identity & address proof

• Property ownership documents

• Income proof (salary slips, ITRs, bank statements)

• Business proof (for self-employed)

Pros:

• Competitive interest rates

• High loan amounts

• Flexible usage

• Long repayment tenures

Cons:

• Risk of losing property if unable to repay

• Lengthy processing and documentation

• Property valuation may affect loan amount