To handle unforeseen medical expenses, to finance your child’s higher education, marriage, to expand your business, or to fund a family vacation abroad, you will need surplus funding. Now, you get a loan from the bank, but the loan amount will be restricted to your financial status. On the other hand, if you own a property, even vacant land, you can put it into use and get the desired loan amount. LAP loan has become popular in India for so many reasons. The primary reason is that the loan amount is huge, as you will be funded with the amount that resembles your property’s value. If you own a land, you can easily avail a mortgage loan against your property and get your needs fulfilled. 

In this post, we will explain how you can get a mortgage loan against your vacant land. 

#1 Check loan eligibility and EMI

Once you have decided to take a LAP loan, you need to evaluate your loan amount eligibility to determine the loan amount you can apply for. On the other hand, you will also have to calculate the EMI that you can repay easily based on your net income. Please note that your loan eligibility will be calculated based on your net income, age, property type, existing obligations, LTV ratio, and other factors. EMI, on the other hand, is dependent on the tenure, LAP loan interest rate, and the loan amount. 

#2 Check your property approval status 

Your vacant land against which you are taking the loan needs to have a clean title, including all statutory and government approvals. Moreover, you will also need to provide all the legal documents associated with your vacant land. The lender may ask for the following land-related documents: 

  • Registered sale deed 
  • Lease deed/conveyance 
  • Past sale deeds chain 
  • Latest tax return or receipt 

Therefore, before applying for the LAP loan, make sure that your vacant land has all the records, documents, and a clean title.

#3 Decide the type of mortgage loan interest rate you would like to have 

Once you have determined your eligibility and have a sense of the vacant land against which you are taking the loan, it is time to check the numerous mortgage loan offers from different lenders. When doing this, the primary aspect you need to check is: 

  • Choosing between floating and fixed rates: If you go with a floating rate LAP, the interest rates will be reset at regular intervals based on the market conditions. That means the interest rate you were paying for the past six months could increase or decrease in response to the market fluctuations. Fixed rates, on the other hand, remain constant during the entire loan tenure. However, fixed rates are higher than floating rates. 

#4 Choose a lender based and loan and service-related parameters from the shortlisted ones 

Finally, based on your evaluation and considering factors like the charges and fees associated with a mortgage loan against a vacant land, select the lender.  

Getting a loan against your vacant land is easy if your land is eligible and the documents are legal. 


Please enter your comment!
Please enter your name here