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LOAN AGAINST PROPERTY (LAP) A loan against property (LAP) i.e. Loan against the…


A loan against property (LAP) i.e. Loan against the mortgage of property. The loan is given as a certain percentage of the property's market value, usually around 60% to 80% depend upon Property is what kind of nature. Further, nature of property means residential property, commercial property or agricultural property and available % of value of property would be also depend upon whether property is constructed or only land etc..

Type of Loan against property:

LOAN FOR COMMERCIAL PROPERTY: – Loan for purchase/ construction of commercial property in approved areas. This includes loans for office space, shops.

LOAN AGAINST PROPERTY FOR BUSINESS EXPANSION: It is also known as Business Loan with Collateral Security

LOAN AGAINST PROPERTY FOR PURCHASE OF ANOTHER PROPERTY: -To meet shortage of fund to buy another property.

LOAN AGAINST PROPERTY FOR PERSONAL PURCHASE: – LAP can also be used for personal purposes like Wedding etc.

Loan repayment is in Equated Monthly Installments (EMI) comprising of principal and interest through Post Dated Cheques/ Electronic Clearance System over a maximum period of 15 years. However, some Bank may provide even 20 years.

PROCESSING FEE AND OTHER CHARGES: -may vary Bank to Bank and nature of loan, property etc. even in some case may be nil.

CHARGEABLE RATE OF INTEREST: – Nature of property, Bank to Bank Policy, Purpose of Loan would be criteria for Rate of Interest.

HOME LOAN: – could be available at very cheap Rate of Interest in comparison to all type of Loan.

MBA(Finance & Marketing), M.Com.(Pure Commerce), L.L.B. & Fellow Member the Institute of Company Secretaries of India


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