A Loan Against Property (LAP) is a secured loan where you pledge your residential, commercial, or industrial property as collateral to get a high-value loan at a lower interest rate.
The property remains in your name, and you can continue using it while repaying the loan in EMIs.
???? LAP can be used for business expansion, working capital, debt consolidation, education, medical needs, or personal requirements.
? Residential Property
? Commercial Property
? Industrial Property
? Rented Property (in some cases)
| Category | Eligibility |
|---|---|
| Applicant Type | Salaried / Self-Employed / Business Owner |
| Age | 21–65 years |
| Income Stability | Regular & verifiable income |
| Property Ownership | Clear & marketable title |
| CIBIL Score | 650+ (higher score = better rate) |
| Business Vintage | 2–3 years (for self-employed) |
| Employment Stability | 2+ years (for salaried) |
| Feature | Details |
|---|---|
| Loan Amount | Up to 60–75% of property value |
| Interest Rate | Lower than personal loans |
| Loan Tenure | Up to 15–20 years |
| EMI | Low due to long tenure |
| End Use | Mostly flexible |
| Security | Property mortgage |
| Disbursal | Lump sum / Overdraft (some banks) |
| Benefits | Explanation |
|---|---|
| Lower Interest Rate | Compared to unsecured loans |
| High Loan Amount | Based on property value |
| Long Repayment Tenure | Reduces EMI burden |
| Multipurpose Usage | Business + personal needs |
| Improves Cash Flow | Ideal for working capital |
| Balance Transfer Option | Possible at lower rates |
| Drawbacks | Explanation |
|---|---|
| Property at Risk | Non-payment may lead to seizure |
| Longer Processing Time | Due to legal & valuation checks |
| Documentation Heavy | Property & income proofs required |
| Prepayment Charges | Some banks may apply |
| Lower Eligibility with Poor Credit | Higher rate or rejection |
? PAN Card
? Aadhaar / Passport / Voter ID
? Income Proof (ITR, Salary Slips, Bank Statements)
? Sale Deed
? Chain Documents
? Approved Map / Layout
? Property Tax Receipts
? Occupancy Certificate (if applicable)
Used for personal needs or debt consolidation
Stable income = better rate
Working capital
Expansion
Machinery purchase
Cash flow management
| Parameter | LAP | Personal Loan |
|---|---|---|
| Security | Property Required | No security |
| Interest Rate | Lower | Higher |
| Loan Amount | High | Limited |
| Tenure | Long (15–20 yrs) | Short (5 yrs) |
| EMI | Low | High |
Answer:
It is a loan where you mortgage your property to get a high-value loan at a lower interest rate.
Answer:
Yes, LAP is widely used for business expansion, working capital, and debt consolidation.
Answer:
No. The property remains in your name, but the bank holds mortgage rights until repayment.
Answer:
Generally, 60–75% of the market value, depending on bank policy and applicant profile.
Answer:
Yes, if you need a large amount with low EMI, LAP is far better due to lower interest and longer tenure.
Answer:
The lender has the legal right to take possession of the property after due process.
Answer:
Yes, many banks accept rented commercial or residential properties.
Answer:
Yes. A good CIBIL score helps in faster approval and lower interest rates.
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