Loan Against Property is also known as mortgage loan. Banks offer loan against a property when the borrower puts a property as a collateral against the loan. Loan against property can be availed by salaried as well as self-employed individuals to finance their personal needs.

You can pledge a commercial or residential property or a plot of land as collateral. The loan will be sanctioned by the bank after evaluating the market price of the property.

When Should I Consider Taking a Loan against Property?

Under the following circumstances, you may think of availing LAP:

• To fund business growth or meet working capital requirements
• To finance a child's education
• To meet family obligations like marriage
• To fund emergency medical expenditure
• To cover personal expenses like vacation

Features of a Loan against Property (LAP)

• The property acts as security against the loan; only residential or commercial property can be mortgaged.
• The bank sanctions 60-70% of the market value of the property as a loan.
• The interest rate varies based on factors like the type of property, interest rate, and tenure.
• Funds borrowed against a property cannot be used to purchase land or construct a home.
• The loan is granted after legal and paperwork verification and evaluation of the property's market value.