• August 31, 2021

Loan Against Property: Unlocking the hidden value of a property

Loan Against Property: Unlocking the hidden value of a property

What if we tell you that your property could help you the most during times of financial crunch?

Yes, you read that right! You can easily pledge your property in exchange for a loan to fund high-end expenditures. Personal loans are indeed prevalent amongst the people of this country.

But let’s not forget how lengthy and expensive the process is. So, applying for a loan against property or a LAP loan might be a better decision for intelligent customers.

So, continue to read this article to know how you can remain stress-free even in hard times.

What is a Loan Against Property?

Loan Against Property (LAP) is a secured loan product that allows you to pledge your property in exchange for a loan.

Financial institutions provide the credit amount which is equivalent to the current value of the property. Both salaried individuals and self-employed individuals can apply for this loan.

A customer can mortgage a self-owned property, rented, or any piece of land owned by them to avail LAP loan.

This loan can be used to fund extravagant expenditures such as medical emergencies, wedding events, business expansion, or children’s education.

What Makes Loan Against Property Beneficial?

By now, you are probably convinced that a LAP loan is indeed beneficial. But wait, there are more benefits to enlighten yourself about. So keep venturing through this article to find out what makes a LAP loan stand out.

1. Borrowing Against Different Property Types: As mentioned earlier, LAP loans can be available on different properties. Applicant can mortgage their self-occupied house, commercial property, and rented property to avail of this loan.

However, most financial institutions lend loans against prime residential properties at a lower rate than those against commercial and industrial properties.

2. Flexible Tenure: A loan against property offers long repayment tenure that can stretch up to 15 years (20 years for some lenders like PNB Housing). Customers can decide their terms according to their capacity for loan repayment.

3. Lower Rate Of Interest: The loan against property interest rate is lower compared to personal loans. The LAP loan interest rate ranges from 9.50% to 11%, whereas the interest rate of a similar personal loan ranges from 12% to 25%. Therefore, the burden of debt is much lower in LAP loans.

4. Pre-closure: Applicants can close their LAP loan before if they want. All they have to do is pay the outstanding amount sooner than the term decided. The closure of the LAP loan account is usually free from any charges.

5. Top-up Facility: Just like a personal loan, a LAP loan comes with top-up facilities. Financial institutions provide a top-up on loan against property by mortgaging the same property but with less paperwork.

6. Easy To Avail: Unlike most loans, LAP loans are easy to avail and require less documentation. Renowned financial institutes like PNB Housing sanction the loan amount in 3-7 days on successful verification.

7. Continuous Ownership: Unlike other secured loans like a gold loan, the applicant can still own the property they mortgaged for the loan. The applicant can use the property just the way they did before. The lender will only have custody of the mother deed and the sale deed of the property until the LAP loan is fully paid off.


We hope you have been enlightened with all the necessary information to know before applying for LAP loans. Keep in mind that different lenders offer different LAP loan interest rates. Self-research is always the best way out. Verify every single thing before availing of the loan.