A loan against property or LAP is a secured loan sanctioned against a property pledged as collateral.
The LAP amount doesn’t have any end-use restrictions, meaning, you can use the amount for any financial requirement.
Loan against property can be availed of against both residential and commercial property.
Usually banks sanction a LAP between Rs. 3 Lakhs to Rs. 100 Crores. It is the only loan facility other than the Housing Loan that allows banks to stipulate repayment period of up to 20 years.
The LTV in case of a loan against property can be anywhere between 65% to 70%.
The interest rates on loans against property are also slightly higher as compared to those on home loans. The interest rate here starts from 8% per annum.