Within this page we will use Loan Against Property as LAP so wherever it has mentioned LAP means it’s Loan Against Property. A LAP is a very famous financial tool for every homeowner. Since it has many advantages while taking out a loan, most of the people prefer LAP as a financial help for the medical emergencies, business expansion or any such related things but how it’s beneficial let’s discuss!
What is a Loan Against Property (LAP)? A Loan Against Property (LAP) is when you use your home or business property as security to get a loan from a bank. They usually lend you a part of your property's value, which can be up to 75%.
One of the primary benefits of LAP is to access a huge amount of funds. Since the loan is secured, many lenders provide a significant amount unlike an unsecured loan like a personal loan where lenders can’t provide a huge amount of money.
Answer: Up to 75% of your property value
It’s lower interest rate! That’s you heard it right. Since this is a secured loan so many lenders provide low interest rates.
Answer: Starting from 8.50%
Answer: Starting from 10.50%
You clearly see the difference!
LAP comes with a longer repayment period. The longer period helps homeowners to make the monthly EMIs more manageable.
Answer: Up to 25 years
Whether you want to grow your business, pay for higher education, cover unexpected medical expenses, or renovate your home, LAP offers the flexibility to use the money according to your requirements. It's like having extra financial support secured by the value of your property, making it a versatile option for different financial goals.
Many families in India have chosen Loan Against Property (LAP) to finance their children's higher education, whether within the country or abroad. LAP offers a huge loan amount and a longer repayment period, which helps families manage the high expenses associated with education. This type of loan allows parents to secure their child's future without immediate financial strain, using their property as collateral to access the necessary funds.
You clearly know how expensive medical treatments are right! So, Homeowners have found Loan Against Property (LAP) to be helpful during such times. They use the funds to pay for high medical bills, making sure they can afford timely and quality treatment for themselves or their loved ones. By using their property as collateral, homeowners can access the necessary funds quickly and efficiently, easing the financial burden during medical crises
One of the great things about Loan Against Property (LAP) is that homeowners can keep living in and using their property while also getting a loan. This is different from selling the property because with LAP, you still own the property and can continue to enjoy living there. You get the money you need by using your property as security for the loan, which means you can access funds without having to give up ownership of your home.But, if you missed your payments for a longer period of time then your property will be at your risk.
While Loan Against Property (LAP) doesn't directly provide tax benefits, there's a way to reduce taxes if you use the loan for business reasons. When you use the LAP money for your business, you can claim the interest you pay on the loan as a business expense. This reduces the amount of income that gets taxed, which can be helpful for managing your tax bill. It's a way to make the most of your LAP funds if you're using them to support your business.
| Benefit | Description |
|---|---|
| Access to Large Loan Amounts | Borrow significant sums based on property value |
| Lower Interest Rates | More affordable than unsecured loans |
| Longer Repayment Tenure | Manageable EMIs over extended periods |
| Flexibility of Use | Funds can be used for various personal and business needs |
| Maintaining Ownership | Retain property while leveraging its value |
| Tax Benefits | Interest on loan used for business can be claimed as an expense |
Many homeowners in India have found Loans Against Property (LAP) to be incredibly beneficial. Whether they need funds to grow their business, pay for education, handle medical emergencies, or ensure financial security, LAP offers significant advantages. By using their property as security, homeowners can get large loans at lower interest rates. They have the flexibility to use the money for various needs. What's great is they still own their property throughout this process, making LAP a valuable financial option. It's important, though, to plan carefully and use the funds wisely to make the most of these benefits and manage repayments effectively.
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The interest rate for LAP in India starts from 8.50%. depending on the lender and the borrower’s credit profile.
Yes, you can apply for a LAP even if you have an existing home loan, provided you meet the eligibility criteria set by the lender.
If you default on your LAP repayments, the lender has the right to seize and sell your property to recover the outstanding loan amount.
Yes, most lenders allow prepayment of LAP. However, there may be prepayment charges, so it’s advisable to check the terms and conditions with your lender.
Yes, lenders typically charge processing fees for LAP, which can range from 0.5% to 1% of the loan amount.
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