LAP- LOAN AGAINST PROPERTY

Through the use of their residential, commercial, or industrial properties as collateral, borrowers can raise money with a loan against property (LAP), also referred to as a mortgage loan.

LAPs can be used for commercial and personal reasons in addition to speculation, just like unsecured personal loans. Loans against property are available from banks and HFCs for terms of up to 20 years.

Depending on the lender and the borrowers' credit history, the maximum loan amount for LAP is 75% of the property's market value. Additionally, a lot of lenders provide the Lease Rental Discounting (LRD) option, which enables borrowers to obtain loans by guaranteeing their tenants' rental receipts.

Characteristics of LAP (Loan Against Property):

• Lower rate of interest – Being secured loan the financial institutions & banks offer the loan at lower interest rates.

• Longer loan tenure - Tenures of up to 20 years available.

• Higher loan amount – LAP is available up to 70% of the property value, resulting in higher loan amounts.

• Higher chances of loan approval – Being collateral is available resulting in reduced lending risk for banks/NBFCs and increasing borrowers’ odds of availing the loan.

• Overdraft facility – This facility also available at lower interest cost.