Detailed Guide to Avail LAP Loan Against Property in 2023

Loan Against Property, commonly known as Loan on property or LAP Loan, is a secured loan that borrowers can avail of by mortgaging their property with the lender. It is a convenient way to obtain a large sum of money for various personal and business purposes like financing higher education, medical emergencies, wedding expenses, business expansion, and more.

LAP loan against property is a popular lending option in India, and it comes with several advantages over other types of loans eg, lower rate, instant approval and more. In this article, we will take a closer look and find out everything you need to know about Loan Against Property:

Eligibility Criteria for LAP Loan Against Property:

Before applying for a LAP Loan, borrowers must meet the eligibility criteria set by the lender. Here are some of the essential eligibility requirements for a loan against property:

  • Property ownership: The property that the borrower intends to mortgage should be in their name, and they must have complete ownership rights.
  • Age: The borrower must be at least 21 years old at the time of applying for the LAP Loan and should not exceed the maximum age limit set by the lender.
  • Property type: Lenders usually accept residential or commercial properties for the mortgage, and they also consider the age and condition of the property.
  • Credit score: A good credit score is an essential requirement for obtaining a LAP Loan. Lenders usually prefer borrowers with a credit score of 750 or above.
  • Income: The borrower must have a stable income source and should be able to demonstrate their ability to repay the loan.

Application Process for LAP Loan

The application process for a Loan Against Property is simple and straightforward. Here are the steps involved in applying for a LAP Loan:

  • Determine the loan amount: The borrower should first determine the amount of money they require and calculate their loan eligibility using a loan against property eligibility calculator.
  • Gather the necessary documents: The borrower must collect all the required documents, including identity proof, address proof, property papers, income proof, and more.
  • Submit the loan application: The borrower should submit their loan application along with the necessary documents to the lender.
  • Property valuation and legal verification: The lender will conduct a property valuation and legal verification to determine the loan amount and assess the risks associated with the loan.
  • Loan disbursal: Once the lender completes the verification process, the loan amount gets disbursed to the borrower’s bank account.

Advantages of LAP Loan Against Property:

Loan against Property offers several advantages over other types of loans, including:

  • Large loan amount: LAP Loans allow borrowers to obtain a large sum of money compared to other types of loans.
  • Lower interest rates: Since lap loan rate of interest¬†are lower compared to unsecured loans, lender’s never loose the ownership of the property and can avail in
  • Longer repayment tenure: LAP Loans have longer repayment tenures of up to 20 years, making it easier for borrowers to repay the loan.
  • Flexibility in end-use: LAP Loans offer flexibility in end-use, meaning borrowers can use the loan amount for various personal and business purposes.
  • Tax benefits: Borrowers can claim tax benefits on loan against property interest paid, under Section 24 of the Income Tax Act.

How LAP Loan is different from a Project loan, business loan or OD/ CC Limits

A project loan refers to a loan that encompasses the entire project, wherein the project itself is used as collateral along with other supporting securities. Repayments for the loan are made in fixed instalments at regular intervals to the lender.

On the other hand, business loans are typically unsecured, meaning they are not backed by any property. These loans are granted based on the borrower’s current financial condition and often carry a higher interest rate but are for lesser amounts.

Limits, on the other hand, maybe secured against properties, but they do not require specific regular interval repayments. Instead, the borrower can withdraw surplus funds from a regular bank account when needed and deposit them back when received. Interest charges are levied on the surplus amount withdrawn for the period it remains withdrawn, and the borrower only pays interest to the lender.

Repayment Mechanism of LAP

The repayment structure of Loan Against Property (LAP) operates on a regular interval basis, with fixed instalments that cover both the principal and interest portions. The frequency and amount of these instalments are determined based on factors such as the cash flows of the business, the frequency of sales receipts, and the regular intervals of cash surplus. In most cases, the instalments are paid on a monthly basis, and the repayment amount is directly deducted from the borrower’s bank account on the agreed-upon date.


To sumup the informative post on Edge Over Web, Loan Against Property is an excellent option for borrowers who require a large sum of money for various purposes. However, before applying for a LAP Loan, borrowers must ensure that they meet the eligibility criteria set by the lender and understand the terms and conditions of the loan. With a lower interest rate, longer repayment tenure, and flexibility in end-use, LAP Loans are an attractive lending option for both individuals and businesses.

Leave a Reply

Your email address will not be published.