Loan Against Property
A loan against property (LAP) is a type of secured loan where the borrower pledges a property as collateral to the lender in exchange for funds. The property can be residential, commercial, or industrial. The loan amount is typically a percentage of the property's market value, which can range from 40% to 80%, depending on the lender's policies.
Key Features of Loan Against Property:
1. Collateral-Based Loan: The property serves as security for the loan, reducing the lender's risk.
2. Lower Interest Rates: Since it is a secured loan, the interest rates are generally lower than those of unsecured loans.
3. Longer Tenure: Repayment terms can extend up to 15-20 years, depending on the lender and loan agreement.
4. High Loan Amount: Borrowers can secure a substantial amount of money based on the value of the property.
5. Flexible Usage: The funds can be used for various purposes, such as business expansion, education, medical expenses, or debt consolidation.
Pros of Loan Against Property:
• Lower Interest Rates: More affordable than unsecured loans like personal loans.
• Larger Loan Amount: Higher funding compared to many other types of loans.
• Flexible Repayment Terms: Longer tenure reduces monthly repayment burden.
• Continued Property Ownership: The borrower retains ownership and use of the property while repaying the loan.
Cons of Loan Against Property:
• Risk of Losing the Property: If the borrower defaults on repayment, the lender can seize and sell the property.
• Lengthy Approval Process: Valuation and verification of the property can take time.
• Limited Loan Amount: The loan amount depends on the property’s market value, which may not match the borrower’s requirements.
Eligibility for Loan Against Property:
• Proof of property ownership.
• Steady income to demonstrate repayment ability.
• Good credit history (preferred but not always mandatory).
• Valid property documents (free of legal disputes).
Frequently Asked Questions (FAQs)
Below are few questions for Personal Loan
A Loan Against Property (LAP) is a secured loan where you pledge your property as collateral to secure funds from a lender. The property can be residential
commercial
or industrial.
Most lenders accept residential
Interest on Loan
EMI Calculator
Loan EMI
Total Interest Payable
Total Amount
Current Rate of Interest As per Nov '24
Home Loan | @ 8.55% Per Annum |
Loan Against Property | @ 9.10% Per Annum |
Personal / Professional Loan | @ 10.50% Per Annum |
Business Loan | @ 15.5% Per Annum |
CGTMSE / Bank Limit / MSME Loan | @ 10% Per Annum |
Project / Corporate Loan | @ 9% - 11% Per Annum |
* Terms & Conditions Apply |