Loan Against Property (LAP): Eligibility, Interest Rates and Risks

Key takeaways

LAP is a secured loan: your property is mortgaged until you repay.
Lenders usually give a share of the property’s market value (often 60% to 70%), depending on the property and your income.
Rates are normally lower than personal loans but can be higher than home loans.

A loan against property (LAP) lets you raise money by mortgaging a residential or commercial property that you own. You keep using the property, but the lender holds a charge on it until the loan is repaid.

What you can use it for

Business expansion, working capital, education fees, medical needs, a wedding or debt consolidation. Lenders may ask for the purpose, and some restrict use for speculative investments.

Eligibility basics

Clear ownership of the property, with a marketable title.
Stable income from salary or business, and a healthy credit score.
Age within the lender’s limits at the end of the tenure.
A property type the lender accepts (agricultural or disputed property is usually not).

Cost and tenure

Tenures can be long (often up to 15 or 20 years). Interest is generally lower than an unsecured loan because the lender has security. Ask about processing fees, legal and valuation charges, and the foreclosure and part-prepayment rules. Compare options with the EMI calculator.

Documents commonly required

KYC and income documents (salary slips or ITR and bank statements).
Property documents: sale deed, tax receipts, approved plan, encumbrance certificate.
Existing loan details on that property, if any.

Risks to understand

Your property is at risk if you default. Under laws such as SARFAESI, a lender can take action on a secured loan after due process.
Borrowing for the wrong reasons can trap you in long-term debt.
Very long tenures lower the EMI but raise total interest.

See details and lenders on the loan against property page, and read about the risks of missing payments in what happens if you default.

This article is for general information only and is not financial, legal or tax advice. Interest rates, fees and rules change, so confirm current terms with the lender or the regulator before you decide. Examples use illustrative figures. Last reviewed: October 2026.