Loan Against Property: Everything You Need To Know

Outlook Money

What is Loan Against Property or LAP?

Loan against property is offered against a commercial or residential property, such as an office, plot, shop or a residential flat, which is used as security for borrowing from a bank or other financial service providers. 


Benefits Of Loan Against Property

The biggest advantage of taking a loan against property is that the loan amount can be used for any purpose, such as business, education, or medical expenses.


Low interest rates

The rate of interest on a loan against property is much lower than on other loans, starting at 9.65 per cent per annum. 

Interest Rates

Long-Term loan

The specialty of this loan is that the borrower gets the option to repay the loan over a longer period. Generally, approval is given to repay the loan over a period of 10-20 years. 


Tax benefits

One can get benefit under Section 37(1) of the Income-tax Act, 1961 on the interest and processing fees. Under Section 24(B) of the Income-tax Act, 1961, if the loan amount is used to buy a residential property, tax exemption up to Rs 2 lakh is available.


Property Ownership

One can retain the ownership rights of the property in a loan against property. Additionally, one can continue to use the property, too.

Compiled by Syed Muskan


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