Loan Against Property · Question

Can I borrow against a property that has no approved building plan?

Short answer

It is difficult. Most lenders want a property built in line with a plan approved by the competent local authority, because unapproved construction can be penalised or required to be altered, which reduces its value as security. Some lenders may consider the land alone, lend a smaller share, or wait until the position is regularised. Acceptance depends on the lender and on what the local authority permits.

In more detail

A lender takes a property as security so that it can be sold if the loan is not repaid. A building without an approved plan is harder to sell with confidence, because a buyer's lender faces the same problem, and the local authority may act against unauthorised work.

The technical and legal reviews a lender commissions will normally compare what exists on site with the approved plan and the permitted use. Gaps reported there influence acceptance and value.

How the situation can play out

Approval exists but the building differs: lenders look at how large the difference is and whether it can be regularised under local rules.
Approval never obtained: some lenders value only the land, ignoring the structure, or decline the property.
Approval pending: some may wait until the authority decides before proceeding.

Whether any deviation can be regularised, and on what terms, is decided by the local authority under its own rules. Outcomes vary and nobody can promise one in advance.

Do not guess at approvals

Check with the competent authority, or a licensed professional, on what your property is permitted and what regularisation, if any, is available. Papers produced just for the lender can create bigger problems later.

Practical steps are usually to gather whatever approvals and completion records exist, ask the authority about the status, and consider whether a different, fully approved property can be offered instead. Our related guidance on plan approval explains the general process of applying.

Key points

Lenders prefer buildings that follow a plan approved by the competent local authority.
Missing approvals can reduce value, narrow lender choice or delay the loan.
Regularisation, where available, is decided by the local authority, not by the lender or the owner.
Consider offering a fully approved property or waiting until the position is clear.

Who this applies to

Owners of older buildings or extensions built without full approvals.
Buyers of resale property whose papers lack a plan or completion certificate.
Businesses whose premises have a partly approved structure.

Last reviewed 3 October 2026

This answer is general information, not advice on your particular case. Terms, eligibility, and requirements change, so check the current position with the relevant institution or authority. Lalsar Holdings' financial advisory and financing work is advisory and facilitation only. Lalsar Holdings is not a lender. Sanction and disbursement of any credit facility is at the sole discretion of the partner bank, NBFC, or financial institution involved, subject to their own eligibility criteria and credit policy.