A loan against property (LAP) is a type of secured loan where you pledge your property as collateral in exchange for financial assistance from a lender. This property can be either residential or commercial. Loans against property are becoming increasingly popular for both individuals and businesses due to their flexible terms and larger loan amounts. However, like any financial product, LAPs come with both benefits and risks. Understanding these can help you decide whether a loan against property is the right choice for you.

Benefits of Loan Against Property

Lower Interest Rates
Since a loan against property is secured by an asset, lenders typically offer lower interest rates compared to unsecured loans like personal loans or credit cards. This makes it an affordable option for those who need a substantial amount of money but want to keep borrowing costs low.
Higher Loan Amounts
With a loan against property, you can borrow a large sum of money, typically up to 60-70% of the market value of your property. This is much higher than most unsecured loans, which makes it a great choice for significant expenses such as funding business ventures, medical bills, or even education.
Longer Repayment Tenure
LAPs often come with longer repayment periods, ranging from 5 to 20 years, allowing you to repay the loan in manageable monthly installments. This flexibility makes it easier to handle the financial burden without affecting your monthly budget too much.