Hello friends! If you’re an entrepreneur working tirelessly day and night but struggling to raise the capital to take your business to the next level, today’s conversation is for you. Imagine: your business is growing rapidly, you need to purchase new machinery, invest in marketing, or increase stock – but the hassle of obtaining a bank loan, high interest rates, and lengthy procedures are holding you back.
But wait! What if I told you that you already have a ‘treasure’ – your home or commercial property – that you can easily mortgage to get a loan worth lakhs or crores of rupees? Yes, I’m talking about a Loan Against Property (LAP), specifically for business use. It will not only solve your capital problem, but also strengthen your business with low interest rates and flexible terms.
Let’s delve deeper and see how LAP can make your business journey easier. Read to the end, because here are some tips that will speed up your loan approval!
What is a Loan Against Property, and why is it right for your business?
First, let’s understand it in simple terms. A Loan Against Property is a secured loan where you put your residential or commercial property as collateral. In return, the bank or NBFC gives you a loan of 50% to 75% of the property value.
This loan is ideal for business use because there are no end-use restrictions – you can use the funds for business expansion, equipment purchase, working capital, or even debt consolidation.
In 2025, as the economy is heading towards a rapid recovery, LAP is proving to be a game-changer for businesses. For example, if your property’s market value is ₹1 crore, you can easily avail a loan of up to ₹60-70 lakh.
And the best part? You retain possession of the property – it’s only mortgaged, not sold. If you look at HDFC Bank’s LAP schemes, they’re specifically designed for business needs, featuring long tenures and low EMIs.
Advantages of LAP: Why Choose This Smart Way of Business Funding?
Friends, LAP offers many advantages over unsecured business loans. Here are some key benefits:
- Low interest rates: Rates start from 8.99% in 2025 and go up to 20%, depending on your credit score and property value. For example, Bajaj Finserv starts at 8%, which is 2-3% lower than business loans.
- High loan amounts: Up to 75% of the property value, meaning funding up to crores.
- Longer tenure: Up to 15-20 years, which results in lower EMIs. IndusInd Bank offers a 20-year tenure.
- Fast approval: Funds are disbursed within 3-7 days through a digital process.
- Tax benefits: If the loan is for business expansion, you can claim a tax deduction on the interest under Section 37(1).
These benefits not only strengthen your cash flow but also help you scale your business. Many banks, like ICICI Bank, also offer overdraft facilities, where you pay interest only on the amount used – perfect for business ups and downs!
Eligibility criteria: Are you eligible for LAP?
LAP is easy to avail, but some basic criteria must be followed. The main ones are:
- Age: 21-60 years (salaried) or 25-65 years (self-employed).
- Income: Minimum ₹25,000 per month, but ITR and financial statements are required for business. Bank of India requires at least 3 years of business experience.
- Credit Score: 700+ CIBIL score – a good score lowers rates.
- Property: Freehold, residential, or commercial, listed by the bank. IDFC FIRST Bank offers up to 80% of the value.
If you are self-employed, have your ITR and balance sheets for the last 3 years ready. NRIs can also apply, but with additional documents. Remember, the location and valuation of the property determine the loan amount.
Application Process: Step-by-Step Guide
The process is simple – no complicated formalities. Here are the steps:
- Apply online: Fill out the form on the bank’s website – enter personal, business, and property details.
- Documents to submit: KYC (Aadhaar, PAN), income proof (ITR, salary slips), property papers (sale deed, NOC). A checklist is available on BankBazaar.
- Valuation and verification: The bank inspects the property (2-3 days).
- Approval and disbursal: Loan approved, funds in the account within 72 hours. Banks like DBS Bank offer doorstep service.
Tip: Apply with a good credit score – the approval rate reaches 90%. Processing fees are 0.5-1%, depending on the loan amount.
Required documents: What to have ready?
- KYC: PAN, Aadhaar, passport-size photo.
- Income proof: Last 3 years’ ITR, financial statements (for businessmen), salary slips.
- Property documents: Sale deed, property tax receipt, NOC from the society.
Shop Act license or sales tax certificate required for self-employed. Follow Finnovate’s 2025 checklist – it’s the latest and complete.
Interest rates and EMI: What to expect in 2025?
LAP rates in 2025 are competitive. According to ClearTax, starting at 9.50%. HDFC 9-12%, ICICI 9.25%.
Use the EMI calculator: ₹50 lakh loan, 10% rate, 15-year tenure, EMI approximately ₹53,000.
Choose a floating rate – benefit from falling repo rates. Bajaj Housing Finance starts at 8.99%, which is budget-friendly for businesses.
Caution: Avoid risks
LAP is secured, but the property may be seized in case of default. Always check repayment capacity.
Foreclosure charges can be 2-4%. Check SMFG India Credit’s policy. Use the loan transfer option if you find better rates.
Conclusion: Act now, let your business soar!
Friends, LAP is not just a loan, it’s the fuel for your business growth. If you’re ready, apply today – small steps, big changes. Any questions? Ask in the comments, we’re here. Wishing you success!