Loan against property: all that you need to know

by Admin

In everyone’s life there comes a time when one has to witness a few financial crunches. Some could be minor, which can be solved with a proper review and some careful budgeting. Some are major, which needs more amount of assessment. By then, there might not be enough time left to take down the burden. But it does not mean that you cannot overcome this situation. There are a few ways with which you can come out of your financial crisis.


What is LAP?

Loan against property or LAP is one such viable option with which you can mortgage your legally owned property against a secured loan.  Here, a borrower who is in need of finances could give his property as a security to the lender and can get a loan. The lender then receives partial ownership over that property until the borrower repays his debt to the full. Unlike other loans, these can have a more extended margin of repayment tenures, and the borrower remains its legitimate owner, no matter what. The debtor can repay the loan with his/her financial comfort.


Who can avail loan against property?

  • Any individual who is salaried and has a steady source of income
  • Professionals such as doctors, lawyers, architects and management consultants
  • Self-employed individuals like businessmen, traders, manufacturers, etc.
  • Firms and companies (private or public)


A person can avail LAP against his possessions. It could be a residential plot, a commercial space or a plot of land that the person has full ownership on. When the lender assesses the value of the property, it is usually around 40 to 60 percent of the market value. Loan against property can be used for any financial needs that a person might have. For example, it can be used to expand your business or commercial needs, to fulfill your obligations like financing your child’s education or wedding, paying for expensive medical treatment or any other such financial emergency/engagement.

When you opt for a loan against property, it is vital to keep in mind that all the banks have different criteria while giving you the eligibility for this loan. However, the main factors that are checked are your income and savings, the value of the property you want to mortgage and the previous repayment of your loans or debts. When a person takes this loan, he has to be prepared for letting the lender have control over his property till the time he repays his loan completely.


What are the benefits of opting for LAP?

We always tend to research as much as we can before be investing in any monetary tool. LAPs can’t be left behind.

  • The rate of interest for this kind of loan is much lower than a personal loan as this loan is given out by taking the borrowers property as collateral.
  • LAPs are easy to get from the bank and the period for the repayment is also longer, up to 15 years, in comparison to personal loans, which is only up to 7 years.
  • As there is a longer tenure of repayment, the paying of EMIs also become low. Thus, becoming suitable for the people who cannot afford to pay a large sum of amount in one shot.


A loan against property can be one of the best ways to acquire money within a short period. Every borrowing tool has its pros and cons, and with this kind of loan, if the amount loaned is not fully paid even after the maturity period, the lender can sell off the mortgaged property to recover the money against it. It is always advisable to take the loan and pay back the debt within the tenure of the mortgage.

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