Property Loan (Loan Against Property)
A property loan, also known as a loan against property (LAP), is a type of secured loan where you mortgage your property
(residential, commercial, or land) to get funds from a bank or financial institution.
Key Features
- Purpose: Can be used for business expansion, education, medical expenses, debt consolidation, or any personal need.
- Security: The property is pledged as collateral with the lender until the loan is fully repaid.
- Loan Amount: Usually a certain percentage (up to 70–80%) of the property’s market value.
- Repayment: Done through EMIs (Equated Monthly Installments), typically over 5 to 20 years.
- Interest Rate: Generally lower than unsecured loans like personal loans because it’s backed by property.
Benefits
- Large loan amount available.
- Lower interest rates.
- Long repayment tenure.
- Continue to use the property while repaying the loan.