Beginner’s Guide to Loan against Property (LAP)

What is a loan against property?

A loan against property is just that – a loan you get against a property you need to keep as collateral. This makes loan against property a secured loan.  The borrower gives a guarantee of repayment using the property as the security.

How much loan can I get against a property?

The loan amount you get depends on the value of the property. Usually, lending institutes sanction a loan of, approximately, 65% of the value of the property.

How much is the rate of interest of loan against property?

The rate of interest for loan against property ranges from 12% to 16%.


What is the tenure of loan against property?


The tenure for loan against property can be up to 15 years.


What can loan against property be used for?


Loan against property is a fantastic way to arrange for funds when you want to meet any type of high expenses. The list below includes (but is not limited to) what it can be used for:



Setting up a business

Purchasing a new home/ land/commercial property

Studying abroad

Medical emergencies

What type of properties can I take a loan against?


You can take a Loan against Home:

Self-owned residential property

Self-owned and self-occupied residential property

Self-owned but rented residential property

Self-owned piece of land

Self-owned commercial property

Self-owned but rented commercial property

What factors are assessed to determine my eligibility for loan against property?


Your financial information, ability for repayment, and value of the property are most commonly assessed. But other common factors banks look at are:

Your income



Value of the property mortgaged

Your past repayment record for loans, credit cards, etc.

What are the other advantages of loan against property?

The long tenure of LAP makes the EMI more affordable

The loan amount is much higher as compared to a personal

As it is a secured loan. The rate of interest is lower compared to any other unsecured loan

You have the chance of liquidating LAP whenever surplus funds are available without incurring prepayment penalty

LAP can be easily refinanced through other lending institutes



Author: homeloan

Use the interactive Home Loan EMI calculator to calculate your home loan EMI. Get all details on interest payable and tenure using the home loan calculator.

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