Loan Against Property

A Loan Against Property (LAP) is a type of secured loan provided by banks and financial institutions where an individual or business can mortgage their owned property—either residential, commercial, or industrial—to avail funds. The loan amount is generally a percentage of the market value of the pledged property, often ranging from 50% to 75%, depending on the lender’s policies and the property type.

Unlike unsecured loans, LAP offers lower interest rates, higher loan amounts, and longer tenures—making it a preferred choice for those looking for substantial funds for business expansion, education, medical emergencies, or debt consolidation. The borrower retains ownership and use of the property while repaying the loan.

In case of default, the lender has the legal right to auction the property to recover the loan amount. Hence, it’s crucial to assess repayment capacity before opting for a LAP.