Key Questions About Loans Against Property Answered

Seeking a loan, big or small, is a huge decision for an individual. Depending on the requirement of money, people choose the loan type. With a growing number of banks and financial institutions offering loans for various purposes, it has now become much easier to get a loan application approved. For business purposes, loan against property maybe the perfect choice.

What is a Loan Against Property ?

Loan against property in India is not restricted to business and commercial entities. Salaried individuals, self employed individuals, self employed professionals and business entities are eligible to apply for the loan. The documentation requirements for each may differ based on the application.

Various types of properties are eligible for seeking a loan against property. You can seek loan against commercial property, residential property, vacant land or leased residential property. The property documents should be available with the applicant.

Are Any Tax Exeptions Available to People Availing Lap Loans

Tax incentives are available for a businessman who has applied for a loan against property. However, there are no tax incentives on the EMIs paid by a salaried individual. In case of a businessman, he needs to prove that the funds were used to improve his business, with that, he can claim a tax deduction on the entire amount of interest paid on the loan.

Since the market value of the property is constantly changing, the banks determine the value of the property before approving the loan application. Banks have a formal valuation process which will evaluate the property and based on the same, the loan amount will be calculated.