Loan against property (LAP) by financial institutions. You can take this loan against property (this is loan against your residential property) or loan against industrial or commercial property.'Loan Against Property', also known as LAPs is one of the variants of personal loan. This is a type of secured loan which comes handy in times of immediate financial needs.

Loan against property is a type of secured loan.A borrower has to mortgage the residential or commercial property for loan against property.

The approved loan amount for loan against property depends on the borrower's income details as well as value of the property which is being kept as mortgage.Rate of interest for loan against property is lower. A borrower pays cheaper EMIs.

Availing a loan against property (LAP) has become quite easy these days. However, as an applicant for LAP, you must be aware of certain criteria to make sure the entire loan procedure happens smoothly. There are several benefits of LAP, and in this post, we will introduce to these benefits.The process of obtaining loan against property is very quick and hassle free.

Secured Loan

Secured loans are loans backed with something of value that you own. This is called collateral. Common examples of collateral include your vehicle or other valuable property such as jewelry.If you’re approved for a secured loan, the lender will hold the title or deed to the collateral or places a lien on the collateral until you pay the loan off in full.

Serves Variety of Needs

You can use the loan amount to fulfill all your needs that fall under legal demands. There are not many restrictions as to how to utilize the funds when it comes to LAP. However, most people borrow against property in situations of huge funding requirement such as for education, medical costs, purchasing new house, travel plans, setting up a business, marriage etc.

Cheaper Loan Option

Loan against property is the cheaper loan compared to unsecured loans and thus, an effective way to meet your monetary demands during the times of financial need.

Flexible Loan Tenure

Loan duration is longer in this case. Thus loan against property is a good option, with the tenure extending to around 20 years, in case, the loan amount is high.

Loan Based on EMI or Overdraft Facility

You get the benefit of paying the loan either through equated monthly installments or overdraft facility, whichever is suitable. It is the evaluation of the property along with your account history, which confirms the overdraft limit.

Comfortable EMI Routine

Mostly, LAP tenure is longer (say up to 10 to 30 years or lesser), than other loans. Thus, you have to pay smaller EMIs if you choose a longer tenure. If you do not mind a larger outstanding loan amount because of longer loan term, and are comfortable paying in installments, then LAP is the best choice as a loan type.

Borrowing against Different Property Types

You can take LAP on commercial and residential property. The property in question must be owned by you so as to get the loan sanctioned. It can be taken on a piece of land you own and even in few cases properties that are under construction. Banks will consider a lot many factors, especially property valuation, legal clearances to it, before sanctioning the loan amount.