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Loan Against Property

Loan Against Property

A Loan Against Property (LAP) is a type of secured loan where an individual or business borrows money by pledging their property as collateral. This is one of the most common and affordable forms of long-term borrowing.


Key Features of Loan Against Property


Feature

Details

Type of Loan

Secured (property-backed)

Loan Amount

Usually 50%–75% of the property's market value

Tenure

Can go up to 02–07years

Interest Rates

Lower than personal loans (varies by NBFC/Bank, starting from ~9% p.a.)

Collateral Required

Residential, commercial, or industrial property

Usage

Business expansion, education, medical needs, debt consolidation, etc.

Eligible Properties for LAP


  • Self-occupied residential property
  • Rented or vacant residential/commercial property
  • Industrial land/building
  • Joint-owned property

Advantages


  • Lower interest rates (compared to unsecured loans)
  • Long repayment period
  • Continued use of the property (ownership remains with borrower)
  • Higher loan amounts available
  • Quick processing (if documentation is complete)

Common Documents Required


  • Identity Proof (Aadhaar, PAN)
  • Address Proof
  • Income Proof (ITR, salary slips, bank statements)
  • Property Documents (Title deed, tax receipt, approved map, etc.)
  • Business proof (if self-employed)