Loan against property

A Loan Against Property (LAP) is a secured loan where you pledge your property—residential, commercial, or land—as collateral to obtain funds from a bank or financial institution. The loan amount typically ranges from 40% to 80% of the property's current market value, depending on the lender's policies and the property's condition. ​

 Key Features of LAP

• Secured Loan: Your property serves as collateral, reducing the lender's risk.

• Flexible Usage: Funds can be used for various purposes, such as business expansion, education, medical emergencies, or debt consolidation.

• Lower Interest Rates: Compared to unsecured loans like personal loans, LAPs generally offer lower interest rates.

• Longer Tenure: Repayment periods can extend up to 15–20 years, depending on the lender.

• Ownership Retention: You continue to own and use the property, provided you meet the repayment obligations.​

 Benefits

• Higher Loan Amounts: Due to the secured nature, lenders are willing to offer larger sums.

• Lower EMIs: Extended tenures can lead to more manageable monthly payments.

• Quick Processing: With proper documentation, the approval process can be swift.

• Versatility: Suitable for both salaried individuals and self-employed professionals.​

 Considerations

• Risk of Property Loss: Failure to repay can lead to the lender seizing the property.

• Processing Fees: Lenders may charge fees ranging from 1% to 2% of the loan amount.

• Documentation: Requires thorough documentation, including property papers and proof of income.​

 Major Indian Banks Offering LAP

For residents of New Delhi, numerous banks and financial institutions offer LAP services. It's advisable to compare interest rates, processing fees, and other terms before selecting a lender.