What is Loan Against Residential Property?
A Loan Against Residential Property is a type of secured loan where individuals can pledge their self-occupied or rented residential property to get funds from banks or NBFCs. The amount sanctioned depends on the market value of the property and your repayment ability. This loan can be used for business expansion, education, wedding, medical treatment, or any major financial need. Interest rates are lower than unsecured loans, and repayment tenures can go up to 15–20 years. You continue to own and use your home while repaying the loan in easy EMIs.
What is a Loan Against Residential Property?
A Loan Against Residential Property (LARP) allows you to raise funds by using your house as collateral. Unlike selling your home, you retain ownership and continue living there. The lender only keeps the property documents until the loan is repaid. This is a popular funding option due to its low interest rates, high loan amount, and flexible repayment tenure.
Key Features of Loan Against Residential Property
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Loan Amount: ₹5 lakhs to ₹5 crores
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Interest Rates: Starting from 8% per annum
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Loan Tenure: Up to 15–20 years
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Property Type: Self-occupied or rented residential homes
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Processing Time: Quick approval with proper documentation
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Ownership: Property remains in your name during loan period
Who Can Apply?
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Salaried Individuals working with a stable income
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Self-Employed Professionals like doctors, consultants, etc.
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Business Owners looking to fund growth or working capital
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NRIs (some banks offer LARP to non-residents with Indian property)
Documents Required
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KYC Documents: Aadhaar, PAN, passport, voter ID
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Income Proof: Salary slips, bank statements, ITR
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Property Documents: Sale deed, ownership papers, tax receipts
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Employment Proof: Appointment letter, company ID
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Business Proof (for self-employed): GST registration, business license
Benefits of Loan Against Residential Property
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Lower Interest Rates than personal or business loans
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High Loan Amount based on market value of the property
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Longer Repayment Period helps reduce EMI burden
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No Usage Restrictions – use the money as needed
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Continued Property Use – stay in your home as usual
How is Loan Amount Calculated?
The loan amount depends on two main factors:
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Market value of the property – usually 50% to 70% of the value
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Borrower’s profile – income, credit score, and repayment capacity
Banks will inspect and evaluate the property before approving the loan.
How to Apply for Loan Against Residential Property
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Choose a lender – Compare interest rates and terms
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Check eligibility – Use online calculators for EMI & eligibility
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Fill application form – Online or at the branch
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Submit documents – KYC, income, and property documents
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Property verification – Valuation and legal check by bank
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Loan sanction & disbursement – Money credited to your account
Things to Consider Before Applying
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Ensure property title is clear with no legal issues
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Keep a good credit score for better interest rates
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Understand processing fees, prepayment charges, and penalties
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Borrow only what is needed and manageable through EMIs
Top Banks Offering Loan Against Residential Property
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HDFC Bank
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ICICI Bank
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State Bank of India (SBI)
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Axis Bank
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Kotak Mahindra Bank
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Bajaj Finserv
Conclusion
A Loan Against Residential Property is a reliable and affordable way to meet high-value financial needs without selling your home. With attractive interest rates, long repayment tenure, and easy access to funds, it is an ideal solution for individuals seeking large loans for personal or business use. Always compare loan offers, understand terms clearly, and plan repayment smartly to enjoy the benefits of this secured loan without stress.