When you’re in need of quick funds, a loan against property can seem like an attractive option. A loan against property (LAP) is a secured loan, where you pledge your residential or commercial property as collateral to borrow money. This financial product has grown in popularity due to its relatively easy approval process and attractive loan terms. But like any financial decision, it’s important to weigh both the pros and cons before you dive in.

What is a Loan Against Property?

A loan against property is a type of secured loan where your property acts as collateral. Financial institutions like banks and non-banking financial companies (NBFCs) offer these loans. The loan amount you can get depends on the market value of your property and the lender’s criteria. Since it’s secured, the loan against property interest rate is generally lower than unsecured loans like personal loans.