Overview of property loans in India
A property loan, often called a loan against property or LAP, is a secured loan where you mortgage real estate you own and receive a lump sum or an overdraft limit. Unlike a home loan, the money is not tied to buying a house. You can use it for business needs, education, a wedding, medical costs or to clear costlier debt, subject to lender policy.
Not every property is treated the same way. A self-occupied flat, a shop in a market, an office leased to a company and a house that earns monthly rent each carry different valuations, loan-to-value ratios, rates and tenures. This page explains the four main variants so you can compare options and shortlist the one that fits your property and your income.
Types of property loans
| Loan | Security | In brief |
|---|---|---|
| Loan Against Property | Secured | A loan against property is a secured loan where you mortgage a house, shop, office or other real estate you own and borrow a lump sum for almost any lawful purpose. |
| Loan Against Residential Property | Secured | A loan against residential property lets you mortgage a house, flat or independent home you own and borrow for personal or business needs. |
| Loan Against Commercial Property | Secured | A loan against commercial property lets you mortgage a shop, office, showroom, warehouse or similar premises to raise business funds. |
| Loan Against Rented Property | Secured | A loan against rented property is a mortgage loan on a house, shop or office that you have let out, where the lender counts the rent as part of your repayment income. |
EMI calculators for property loans
Each calculator is set up for how that loan is really repaid, with typical rates, a repayment schedule and the fees that change the true cost.
How to choose between property loans
- Start with the property type. Residential property usually gets the highest loan-to-value and the lowest rate. Commercial property is valued on location and rental yield, and mostly gets a lower LTV and a higher rate. Check the type you own before comparing offers.
- Check how the lender values it. Lenders send their own valuer and often lend on the lower of market value and registered value. Ask which figure applies, because the same property can produce very different loan amounts across lenders.
- Decide if rent will count as income. If the property is tenanted, some lenders add rent to your eligible income, but only with a registered agreement and bank-credited rent. This can raise your loan amount without a bigger salary or profit figure.
- Match tenure to your cash flow. Longer tenure lowers the EMI but raises total interest. Business owners can look at overdraft-style limits, where interest is charged only on the amount used. Choose a tenure you can carry even in a weak year.
- Read the full cost, not just the rate. Compare processing fees, valuation and legal charges, part-payment terms and the Key Fact Statement. Floating-rate loans to individuals are covered by RBI rules on prepayment charges, so ask the lender what applies to your loan.
Estimate your EMI
Example values only. Replace them with the figures in your own offer.
Reducing-balance method. Excludes processing fees, GST, insurance and other charges.
Property Loans: frequently asked questions
What is a property loan in India?
A property loan is a secured loan where you pledge real estate you own, such as a house, shop or office, and receive money for personal or business use. The lender holds a mortgage on the property until you repay. You keep using the property while the loan is running.
How much can I borrow against my property?
Most lenders offer roughly 50% to 70% of the assessed market value, with residential property often at the higher end and commercial property lower. The final amount also depends on your income, credit history, existing EMIs and the lender's own valuation, so treat any figure as indicative.
Is a loan against property cheaper than a personal loan?
Usually yes, because the property reduces the lender's risk. Rates are often several percentage points lower than unsecured loans, and tenures are much longer. The trade-off is that the property can be sold by the lender if you default, so borrow only what you can repay.
Can I take a property loan on a property under a home loan?
Usually not on the same property while the original home loan is open, because the first lender holds the mortgage. Some lenders offer a top-up on an existing home loan instead. Once the home loan is closed and papers are released, the property can be mortgaged afresh.
Which documents are needed for a loan against property?
You will typically need identity and address proof, income documents such as salary slips or ITR with financials, bank statements, and property papers including the title deed, tax receipts and an encumbrance certificate. Lenders may ask for more depending on property type and location.
Can I get a property loan on a property that is not in my name alone?
Often yes, but all co-owners normally need to sign as co-applicants or give consent. The lender checks that the title is clear and marketable. Disputed, agricultural or unapproved properties are commonly declined, so clear title matters more than the owner count.
Explore other loan categories
Official sources and further reading
These guides are written from Reserve Bank of India rules and official scheme pages. Rules, rates and scheme terms change, so check the current position on these sites and in your lender's Key Fact Statement before you apply.
- RBI: Key Facts Statement (KFS) for loans and advances. The Reserve Bank of India notification that tells lenders to give every borrower a plain-language statement of the full cost of a loan.
- RBI Complaint Management System. Where to take a complaint against a bank, NBFC or other regulated lender if the lender does not resolve it.
- RBI (Pre-payment Charges on Loans) Directions, 2025. Bars pre-payment charges on floating-rate loans taken by individuals for non-business purposes, for loans sanctioned or renewed from 1 January 2026.
- Reserve Bank - Integrated Ombudsman Scheme, 2021. The single complaint scheme for customers of banks, NBFCs and other RBI-regulated lenders.
- RBI: Free Annual Credit Report to Individuals. Credit bureaus must give you one free full credit report with score every calendar year.
- RBI Financial Education. Consumer guidance from the Reserve Bank of India on borrowing, fraud and your rights as a customer.
Edited by Hemant Kumar. Rates on this site are indicative ranges, not offers.
General information only. Rates and terms are indicative and vary by lender and applicant.