Archive · 11 Jun 2025
Understanding Loans Against Property: Eligibility, Risks, and Benefits
Loans Against Property (LAP) let you borrow money using your house or business as collateral.
You can borrow a large amount with lower interest rates than personal loans, with a repayment period up to 15 years.
This is often used for debt consolidation, or for other expenses like education or medical costs.
However, if you can't pay back the loan, you could lose your property.
LAP is suitable for borrowers with a steady income and a clear repayment plan.
Loans against property (LAP) are gaining focus from banks and NBFCs.
Eligible properties include self-owned residential, commercial, and industrial properties.
LAP offers large loan amounts, ranging from Rs 20 lakh to Rs 5 crore or more.
Interest rates are lower than unsecured loans, starting from slightly above 9%.
Missing EMI payments can lead to property repossession; requires a clear repayment plan.
- Who
- Borrowers seeking loans and lenders offering them.
- What
- Information on Loans Against Property (LAP).
- When
- Information is current as of the publication date of the articles.
- Where
- Not specified in articles.
- Why
- LAP is being focused on by banks and NBFCs, borrowers should understand the pros and cons before opting for them.
Borrower Perspective
Lender Perspective
Risk Tolerance
Borrower Perspective
Borrowers with a steady income and repayment plan are best suited for LAP.
Lender Perspective
Borrowers with unstable income may struggle to repay.
- Loan Amount Range
- Rs 20 lakh to Rs 5 crore or more
- Interest Rates
- Starting from slightly above 9%
- Typical LTV (Residential)
- 60 to 70%
- Typical LTV (Commercial)
- 45 to 55%
- Loan Tenure
- Up to 15 years