How Loan Against Property Works

A Loan Against Property (LAP) is a secured loan where you pledge your residential, commercial, or industrial property as collateral to financial institutions. The lender evaluates the property’s market value—typically offering up to 50% to 75% of its valuation as loan proceeds.

Unlike unsecured personal loans, LAP offers significantly lower interest rates and longer repayment tenures, often extending up to 15 years. Borrowers retain full ownership and usage rights of the property throughout the tenure, provided they service the Equated Monthly Installments (EMIs) on time.

Defaulting on repayments, however, gives the lender legal rights to auction the property to recover dues under the SARFAESI Act. LAP is widely utilized for major capital requirements such as business expansion, higher education, debt consolidation, or medical emergencies.