Can I borrow money against a property I own? Yes, and doing so via a LOAN AGAINST PROPERTY (LAP) is a standard business practice for manufacturers and traders in West Bengal who need to fund large projects. In the 2026 financial market, real estate is often your most valuable tool for raising capital. Whether you own a residential flat in Kolkata, an industrial shed in Howrah, or a commercial shop in Siliguri, these assets act as collateral that banks and NBFCs accept to provide low-interest funding.
This method of borrowing allows you to “monetize” your property without selling it. It is a long-term debt solution that provides the liquidity needed for business expansion, buying machinery, or consolidating high-interest short-term debts.
How can a normal person borrow against an asset?
Borrowing against an asset is the process of pledging something of value to a lender in exchange for a loan. For most people, the most significant asset is their property. The process is straightforward: the lender assesses the market value of your property and your ability to repay the loan, then provides a percentage of that value as a loan.
When you take a LOAN AGAINST PROPERTY, the lender keeps the original title deeds of the property as security. You continue to use the property for your business or residence, but a “Charge” is created in the lender’s favor. Once the loan is fully repaid, the documents are returned, and the charge is removed.
Common Assets Used for Borrowing:
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Residential Property: Self-occupied or rented houses and flats.
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Commercial Property: Offices, shops, and showrooms.
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Industrial Property: Factory land, warehouses, and sheds in areas like Sodepur or Dhulagarh.
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Plots of Land: Non-agricultural plots with clear boundaries.
Is it wise to borrow against your house?
Many business owners ask: Is it wise to borrow against your house? The answer depends on what you do with the money. If you are using the funds for a productive purpose that generates a higher return than the interest you pay, then it is a smart move.
When it is wise:
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Business Expansion: If investing ₹50 Lakh in your factory increases your annual profit by ₹15 Lakh, while the loan costs you ₹5 Lakh in interest, you have made a net gain.
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Debt Consolidation: If you are paying 18% on multiple unsecured business loans, switching from a business loan to LAP at 10% interest will save you a massive amount of money every month.
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Capital Expenditure: Large purchases like automated machinery have a long life. A long-term LAP matches the life of the asset.
When to be cautious:
Pledging your house means the lender has the legal right to take possession if you default. You should only borrow what your business cash flow can comfortably support. Always check your DSCR (Debt Service Coverage Ratio) before signing the agreement.
Is it better to take out a personal loan or home equity loan?
When you need funds, you might wonder: Is it better to take out a personal loan or home equity loan? (Home equity loan is another term for a LOAN AGAINST PROPERTY).
| Feature | Personal Loan | Loan Against Property (LAP) |
| Interest Rate | 15% – 22% | 8.5% – 11.5% |
| Loan Amount | Usually capped at ₹25–40 Lakh | Up to ₹100 Crore+ |
| Tenure | Max 5 years | Up to 15 years |
| Security | None | Property Mortgage |
| Tax Benefit | Minimal | High (Section 37(1)) |
For a business owner, a LAP is almost always the better choice. The lower interest rate and longer tenure result in a much smaller EMI, which protects your daily working capital.
Is it cheaper to get a loan or a mortgage?
In the context of property, people often ask: Is it cheaper to get a loan or a mortgage? A mortgage (like a home loan for a new purchase) is generally the cheapest form of debt. A LOAN AGAINST PROPERTY is slightly more expensive than a home loan but much cheaper than any “clean” or unsecured business loan.
Why Secured Loans are Cheaper:
The Reserve Bank of India (RBI) sets guidelines that allow banks to offer lower rates on secured debt because the risk of loss is lower. If you have a property with a clear KMC mutation and updated tax receipts, you are seen as a “Low Risk” borrower. This allows you to negotiate for the lowest LAP interest rates in West Bengal.
How much can you borrow against your house?
The amount you can get depends on two factors: the value of the property and your income. The common question is: How much can you borrow against your house?
1. Loan to Value (LTV) Ratio
The LTV is the percentage of the property’s market value that a bank will lend.
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Residential Properties: Usually 65% to 75% LTV.
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Commercial/Industrial Properties: Usually 50% to 60% LTV.
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Plots: Usually 40% to 50% LTV.
2. Repayment Capacity
Even if your property is worth ₹10 Crore, you won’t get a ₹7 Crore loan if your GSTR-3B filings show only ₹1 Lakh in monthly profit. Banks look for a “Multiplier” of your annual profit.
What is the maximum you can borrow against your house?
In 2026, What is the maximum you can borrow against your house is a common query for those looking at corporate funding. For high-ticket requirements, there is technically no upper limit, provided the asset value and the business income support it. Creditcares specializes in mandates exceeding ₹10 Crore on a Pan-India basis.
For these large amounts, lenders look at:
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Potential Development Value: The future value of the land.
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Group Turnover: Combined income of all your business entities.
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Collateral Mix: Using multiple properties to secure a single large limit.
You can find more details on limits and tenures at our sitemap.
Can I pull money out of my property?
Yes, you can I pull money out of my property through a process called “Equity Release” or a LAP. This is particularly useful for business owners in West Bengal who have seen their property values rise in areas like New Town, Rajarhat, or the industrial belts of North 24 Parganas.
How to “Pull Money Out”:
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Valuation: Get a free 2026 property valuation to know the current market price.
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Application: Submit your mortgage loan eligibility documents.
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Disbursal: The bank pays you the loan amount in one lump sum or as a secured overdraft.
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Usage: You use the money for expansion while the property continues to appreciate.
Regional Specifics: Borrowing in West Bengal (2026)
Borrowing against property in West Bengal has specific requirements that you won’t find in other states.
1. The KMC Mutation Requirement
For properties in Kolkata, a completed KMC mutation is mandatory. Banks will not accept a property as collateral if the municipal records still show the old owner’s name.
2. Thika Tenancy Issues
If your property is under Thika Tenancy in Howrah or North Kolkata, getting a loan is possible but requires a specific NOC from the Thika Controller. We help navigate these local rules to ensure you don’t face rejections.
3. The NOC Factor
Lenders in 2026 are strict about the No Outstanding Certificate (NOC). This proves that the property has no tax liens from the Income Tax Department or GST department.
Step-by-Step Guide to Borrowing Against Your Asset
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Check Your CIBIL: A score above 750 gets you the best rates. If it’s low, focus on improving your CIBIL score fast.
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Organize Tax Records: Download your latest GSTR-3B and Form 16A.
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Property Valuation: Get an estimate of your Maximum loan amount for LAP.
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Lender Selection: Compare top 5 banks vs NBFCs to see who offers the best terms for your specific property type.
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Sanction & Disbursal: After technical and legal checks, the loan is disbursed to your business account.
Can I Borrow Money Against a Property: Frequently Asked Questions (FAQs)
1. Can I borrow against a property I am still paying for?
Yes, this is called a “Top-up” loan or a “Balance Transfer.” You can move your existing loan to a new bank and get extra funds based on the increased value of the property.
2. Is it wise to borrow against your house for a startup?
It is risky. Unless you have a proven business model or secondary income, pledging your primary residence for a new venture is not recommended. For established businesses, however, it is a standard growth move.
3. How can a normal person borrow against an asset like a warehouse?
A warehouse is considered industrial collateral. You need to provide the industrial shed or warehouse details and proof of lease income or business use.
4. What is the maximum you can borrow against your house if it’s old?
Age of the property affects the tenure. If the property is 40 years old, the bank might limit the tenure to 5-7 years, which reduces the maximum loan amount you can afford.
5. Is it cheaper to get a loan or a mortgage for a commercial shop?
A LOAN AGAINST PROPERTY on a commercial shop is slightly more expensive than a residential one, but it is still the cheapest way to get large-scale business funds.
6. Can I borrow against property in West Bengal if I live elsewhere?
Yes. As long as the property is in West Bengal and you have valid KYC and income proof, you can apply from any part of India.
7. What is the “NOC Factor” in property loans?
The NOC Factor ensures the property is free from legal disputes and tax attachments, which is a mandatory check for all banks in 2026.
8. Does a low CIBIL score mean I can’t borrow against property?
Not necessarily. Since there is security (the property), some NBFCs provide LAP with a low CIBIL score, though the interest rate will be higher.
9. Can I pull money out of my property to pay off GST dues?
Yes. Using a 10% interest loan to pay off 18% p.a. GST interest is a very common reason for taking a LAP.
10. How do I find more information on property types?
Please visit our sitemap for a complete list of guides on various property types and loan products.
Final Summary: Unlocking Your Property’s Value
Can I borrow money against a property I own? The answer is a resounding yes. A LOAN AGAINST PROPERTY is a powerful financial tool that provides the large-scale capital needed for business growth while keeping interest costs low. By understanding your LTV limits and ensuring your statutory compliance is up to date, you can use your real estate to build a lasting industrial legacy.
Are you ready to see how much you can borrow against your property?
We can help you analyze your property value and financial health to secure the best rates in India.
Contact us for a free property review | Check your LAP eligibility today | Explore our sitemap for more insights
