Decoding Loan against property

A loan against property, also known as LAP in finance parlance, is a type of secured loan that allows you to borrow money against the value of a property that you own. The property can be commercial or residential and can be either self-occupied or rented out.

LAP is typically a long-term loan, and the amount you can borrow depends on the value of the property and your repayment capacity. The lender will evaluate the property and determine its value, and then offer you a loan amount that is a percentage of the property's value.

The interest rates for LAP are usually lower than unsecured loans as the lender has security in the form of your property. However, it is important to note that if you default on the loan, the lender can take possession of the property and sell it to recover the outstanding loan amount.

LAP can be used for various purposes like business expansion, education, medical expenses, debt consolidation, etc. However, it is important to carefully evaluate your repayment capacity before taking a LAP, as failure to repay the loan can lead to the loss of your property.