A Loan Against Property (LAP) is a secured loan where individuals or businesses can borrow money by pledging their residential or commercial property as collateral. This type of loan allows the borrower to access a large sum of money while retaining ownership of the property. LAPs are typically offered by banks and financial institutions, and the loan amount is determined based on the value of the property being pledged.

The loan can be used for various purposes, including funding business expansion, paying for education, medical expenses, debt consolidation, or other personal financial needs. The property can be either residential (e.g., a house or apartment) or commercial (e.g., an office building or land).

Key features of a Loan Against Property include:

• Loan Amount: Typically, the loan amount can range from 40% to 70% of the market value of the property, depending on the lender's policies and the property’s value.
• Interest Rates: Interest rates on LAPs are generally lower than those on personal loans or credit cards because the loan is secured by property.
• Repayment Terms: The repayment terms are usually flexible, ranging from a few years up to 15 or 20 years, depending on the lender's offerings.
• Eligibility: The borrower needs to own a property and meet the lender's creditworthiness requirements.

Advantages of a Loan Against Property:

1. Lower Interest Rates: Since the loan is secured by property, interest rates are generally more favorable compared to unsecured loans.
2. Higher Loan Amounts: Borrowers can access a larger sum of money due to the property as collateral.
3. Longer Repayment Tenure: The loan typically comes with a longer repayment term, making monthly payments more manageable.