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Loan Against Property

Loan Against Property

Loan Against Property (LAP) is a type of secured loan where an individual borrows money by pledging their property as collateral. The loan is disbursed based on the market value of the property and the borrower's creditworthiness.

Here are some key features of a Loan Against Property:

  • Collateral: The property pledged by the borrower serves as collateral for the loan. This means that in case of default, the lender has the right to seize the property to recover their loan amount.
  • Loan amount: The loan amount disbursed in a Loan Against Property is usually higher than unsecured loans and is based on the market value of the property and the borrower's creditworthiness.
  • Tenure: The loan tenure for Loan Against Property can range from 1 to 20 years, depending on the lender and the borrower's profile.
  • Interest rate: The interest rate for Loan Against Property is generally lower than that of unsecured loans, as the loan is secured by the property.
  • Repayment: The loan repayment can be done through Equated Monthly Installments (EMIs) or through bullet repayments.
  • End-use: Loan Against Property can be used for various purposes such as funding a business, financing higher education, paying off debts, etc.
  • Tax benefits: Interest paid on Loan Against Property is tax-deductible under certain conditions, providing the borrower with tax benefits.

Loan Against Property is a suitable option for individuals who require a large amount of funds and are willing to pledge their property as collateral. It is important to carefully consider the terms and conditions, repayment options, and the potential risks before applying for a Loan Against Property.


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