All You Need To Know About LAP: Loan Against Property

 Loan Against Property (LAP) - as the name suggests is a loan which you get by mortgaging a residential or commercial property that is owned by you as security to a bank or lender to obtain a loan against that property. LAP is a great option to obtain funds at a lower cost and simultaneously make use of an idle asset that you already own without the need to sell it off or dispose of. However, the property so mortgaged for Loan Against Property should be free from any legal and financial encumbrances. The property’s market value is determined by the banker and an amount ranging from 40-60% of the value of the property is approved as loan to the borrower.

There are many benefits of LAP or Loan Against Property, let us take you through some:

Low-Interest Rate

LAP is quite a popular loan in the retail loan market as in comparison to other loans available from banks, LAP offers lower interest rates and a greater amount as 40-60% of your property’s value can be disbursed as a loan.

Purpose of Loan

Like a personal loan, there is no restriction on how you use your Loan Against Property and for what purpose you are taking a LAP. You can use the LAP for financing your business or meet personal expenses like your children’s wedding or further education, etc.

Other Collaterals

The existing property that you own acts like a collateral itself, therefore no other collaterals like any bonds, stock, etc are required to be pledged as collateral security for the loan against your property.

Ease of Availability

LAP can be obtained from any leading private or government banks and even NBFCs. You need to visit their office to know about the eligibility criteria, requisite documents, and other details. In case you are already a customer of a particular bank, you could avail more lucrative schemes and offers like no prepayment or part prepayment penalty, low-interest rate etc.

Processing Time

Last but not the least, a Loan Against Property usually takes 7 to 10 days for disbursal of the loan amount. Given the high amount, this is one loan that can be taken in the most hassle-free way to fund your financial needs.