LOAN AGAINST PROPERTY

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Loan Against Property is also known as mortgage loan. Banks offer loan against a property when the borrower puts a property as a collateral against the loan. Loan against property can be availed by salaried as well as self-employed individuals to finance their personal needs.

You can pledge a commercial or residential property or a plot of land as collateral. The loan will be sanctioned by the bank after evaluating the market price of the property.

When Should I Consider Taking a Loan against Property?


Under the following circumstances, you may think of availing LAP:

  • To fund business growth or meet working capital requirements
  • To finance a child ‘s education
  • To meet family obligations like marriage
  • To fund emergency medical expenditure
  • Loan money to cover personal expenses like vacation
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Features of a Loan against Property (LAP)

  • The property acts as the security against the loan thus, you can only mortgage residential or commercial property to avail the loan.
  • The bank sanctions 60-70% of the market value of the property as loan.
  • The interest rate varies depending on factors like the type of property, the interest rate, tenure etc.
  • Funds borrowed against a property cannot be used to purchase land or construct home.
  • The loan is granted after the a legal and paperwork verification and after the evaluation of the market value of the property.