Loan Against Property

A loan against property, or LAP, lets you borrow a large sum by mortgaging a residential, commercial or industrial property you already own while continuing to use and occupy it. Because the loan is secured against real estate, it carries markedly lower interest than an unsecured personal or business loan and comes with longer tenures, which makes it a favourite for funding business expansion, a child's overseas education, a wedding, a large medical event or consolidating expensive debt. The end use is largely unrestricted, so you decide where the money goes.

Lenders typically extend 50 to 70 percent of the property's market value as the loan amount, a ratio known as the loan-to-value. The exact figure depends on the type of property — residential usually attracts a higher LTV than commercial or industrial — its location, age and marketability, along with your income and the property's clear legal title. A professional valuation and a legal search are standard before sanction. Ticket sizes are large, commonly from a few lakh up to several crore, with tenures that can run up to 15 years.

The trade-off is that your property is on the line: default can lead to the lender enforcing the mortgage, so borrow an amount your cash flow can comfortably service. Compare not just the rate but the processing fee, valuation and legal charges, and any prepayment terms. Self-employed borrowers often find LAP the most cost-effective route to large capital because it prices off the asset rather than a slim income document. LoanServ helps you gauge eligibility from your property value and income, and line up competing offers.