Loan Against Property (LAP), also known as a mortgage loan, is a type of secured loan that allows individuals to borrow funds by pledging their residential or commercial property as collateral with a lender. The property acts as security for the loan, and if the borrower defaults on repayments, the lender has the right to sell the property to recover the outstanding amount.

• Collateral: The borrower pledges their property (residential or commercial) as collateral to secure the loan. The loan amount is typically a percentage of the property’s market value, known as the loan-to-value ratio (LTV).
• Loan Amount: The loan amount depends on the property’s value and the borrower’s creditworthiness. Lenders usually offer higher loan amounts compared to unsecured loans like personal loans.
• Repayment Terms: Loan Against Property comes with longer repayment terms, ranging from several years to decades, allowing borrowers to make manageable monthly payments.
• Interest Rates: Since it is a secured loan, Loan Against Property generally offers lower interest rates compared to unsecured loans.
• End-Use Flexibility: Borrowers can use the loan amount for various purposes, such as business expansion, debt consolidation, education expenses, medical emergencies, or other personal financial needs.
• Application Process: The application process involves thorough evaluation of the borrower’s credit history, income, property title, and other financial aspects.
• Documentation: Borrowers need to provide legal and financial documents related to the property, such as ownership proof, property valuation, and income proofs.
• Risk of Property Loss: If the borrower defaults on loan repayments, the lender can initiate foreclosure proceedings and sell the property to recover the outstanding amount.