How Loan Against Property Works and Who Should Apply in 2025

A Loan Against Property (LAP) is one of the most reliable ways for property owners to unlock the value of their asset without selling it. With rising property prices and evolving lending policies, LAP has become a preferred secured loan option in 2025.

This blog explains how Loan Against Property works, its process, and who should consider applying—with expert insights from Wood Capital.

How Does a Loan Against Property Work?

A Loan Against Property works on a simple principle:

You mortgage an already owned property to a lender, and in return, the lender provides a loan based on the property’s value and your repayment capacity.

Step-by-Step Working Process

Step 1: Property Evaluation

The lender conducts:

• Legal verification
• Market valuation
• Location and usage check

The loan amount is decided as a percentage of the property’s current value.

Step 2: Eligibility Assessment

Lenders assess:

• Monthly income
• Credit score
• Age
• Existing liabilities

Wood Capital ensures your profile is matched with lenders offering maximum eligibility.

Step 3: Loan Sanction

Once property and borrower eligibility are approved, the loan is sanctioned with:

• Approved loan amount
• Interest rate
• Repayment tenure
• 

Step 4: Property Mortgage & Disbursement

After mortgage registration, the loan amount is disbursed either:

• In full
• Or in phases (as per lender terms)

Loan Against Property Loan Amount & Tenure

Loan Amount

• Typically 40%–65% of property’s market value
• Depends on property type and location

Tenure

• Usually 10–20 years
• Longer tenure helps maintain affordable EMIs

Who Should Apply for a Loan Against Property in 2025?

✔️ Salaried Professionals

Individuals with stable income who own a residential or commercial property.

✔️ Self-Employed Individuals

Professionals or business owners with regular cash flow and owned property.

✔️ Property Owners Needing High-Value Funding

LAP is ideal when higher loan amounts are required at lower interest rates compared to unsecured options.

✔️ Borrowers Looking for Structured Long-Term Repayment

Long tenure makes repayment manageable.

Eligibility Criteria for Loan Against Property

Most lenders consider:

• Age between 25–65 years
• Stable income source
• CIBIL score of 700+
• Clear property title
• Approved property usage

Wood Capital helps improve approval chances by selecting lender-specific eligibility matches.

Documents Required

Personal Documents

• Aadhaar
• PAN
• Address proof

Income Proof

• Salary slips or ITR
• Bank statements

Property Documents

• Sale deed
• Chain documents
• Approved plan
• Property tax receipts

Benefits of Loan Against Property

1️⃣ Lower Interest Rates

More affordable than personal or unsecured loans.

2️⃣ High Loan Eligibility

Property-backed lending allows higher funding.

3️⃣ Long Repayment Tenure

Reduces EMI stress.

4️⃣ Retain Property Ownership

You continue to use your property while repaying the loan.

Why Choose Wood Capital for Loan Against Property?

Wood Capital offers:

• Lender comparison
• Eligibility assessment
• End-to-end documentation support
• Faster processing & approvals
• Transparent loan structure
• 
  

Conclusion

In 2025, a Loan Against Property remains a smart financial choice for property owners seeking affordable, high-value funding. Understanding how it works helps borrowers make informed decisions and avoid unnecessary costs.

With Wood Capital’s guidance, you can secure the best LAP solution tailored to your income and property profile.