With the rising financial needs and requirements of people, many people often end up in situations where they need a large amount of money. Thus, in such situations, many people choose to get a Loan against Property to manage a range of financial expenses such as wedding expenses, higher education, business expansion, debt consolidation, and so on. Applying for a Loan against Property has become an incredibly popular and reliable means to meet your financial requirements when your available funds are not enough. If you are planning to apply for a Loan against Property (LAP), here are a few things you should remember :

  1. Repayment Capacity

First of all, you should always be sure of your repayment capacity before you apply for a Loan against Property (LAP). Since a Loan against Property is a secured loan taken against mortgaging your property as collateral, you must ensure that you can repay the loan amount in accordance with the time schedule since the consequences of loan default can be dire. If you fail to repay the loan amount on time, it could typically lead to your property’s loss against which the loan was taken. Additionally, do not delay or miss your EMIs since it will also affect your credit score.

  1. Long Processing Period

The processing of Loan against Property (LAP) may take a week to a maximum period of a month, and you must make smart choices based on your requirement and financial emergency.

  1. Avoid over-leverage

Always make sure you avoid over-leveraging since it might lead to undesirable consequences and subject you to falling into bad debts. Over-leveraging can also result in repayment default and have an adverse effect on your finances, so it becomes very crucial to proceed with caution while getting a Loan against Property (LAP)

  1. Interest Rates

Loan against Property (LAP) offers lower interest rates than unsecured loan options like personal loans and also credit card debt. Further, the rate of interest for a Loan against Property (LAP) is either a floating interest rate or a fixed interest rate. It is very important for you to compare different financial institutions’ interest rates and choose the best option available.

  1. Choose the Loan Tenure wisely

Financial institutions that offer a Loan against Property (LAP) generally have a repayment schedule starting from two years to a maximum repayment tenure of twenty years. If you are planning to take a Loan against Property, you can choose a longer repayment tenure since having a longer tenure typically means that your tenure will go down, which will reduce your financial burden. 

  1. Deft Comparison between lenders

Before you apply for a Loan against Property (LAP), compare the lenders on various parameters such as processing fee, rate of interest, prepayment options, repayment tenure, and so on. Compare the options available and make smart choices based on your requirement.

  1. Eligibility Criteria and basic Requirements

Self-occupied residential property typically qualifies for a loan up to sixty per cent of its market value while a rented out property qualifies for a loan up to fifty-five per cent of its market value. The financial institution offers quick loan approval and repayment tenure options up to twenty years for a Loan against Property (LAP). It offers a loan equivalent to fifty per cent of the market value for a self-occupied commercial property. If the commercial property is rented out, it qualifies for a loan up to forty per cent only. Further, individuals should not be over sixty years of age to avail of a Loan against Property (LAP).

  1. No Tax Benefits

While a home loan offers tax benefits on both interest and principal repayment, you do not get any tax benefits in the case of a Loan against Property.


A Loan against Property is always a smart choice when it comes to availing of secured loans. It is a more convenient option than personal loans, and it offers low rates of interest than personal loans. Plus, a Loan against Property (LAP) is not restricted to a specific purpose, unlike home loans. It is undoubtedly a beneficial loan option that is safe, secure, and offers immediate finances in times of need. It helps you meet your personal needs and your professional needs. Now that you know the mandate rules and guidelines to follow while applying for a Loan against Property (LAP), you can go ahead and make smart financial choices to meet your immediate monetary needs.

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