A loan against property (LAP) is a secured loan provided by banks, housing finance companies, and non-bank financial institutions (NBFIs) against residential or commercial property. These loans are typically offered at a lower interest rate than a personal loan or business loan and are disbursed in a timely manner. Such loans are available to anyone who owns a previously owned property, regardless of whether they are salaried or self-employed in a business or professional setting. The loan amount sanctioned is also greater than that offered by other available options.

One of the most important things to understand about LAP is that lenders only provide a certain percentage of the property’s market value. Banks typically lend between 50% and 60% of the property’s value. Other private lenders provide approximately 80% of the property’s value. LAP is a secured loan because you keep the collateral with the lender.