LAP versus personal loans

Loan against property means- a loan given or disbursed by mortgaging property. The loan is given as a certain percentage of the property’s market value, usually around 50-60 %. We called loan against property a secured loan because the borrower provides a guarantee by using his property as security.

Features and Benefits of loan against property:

Long tenure: Require money or funds for long period than lap is the answer because lap comes with upto 15 years tenure period.

High Loan Amount: If you are looking for large sum of amount. You can try a LAP (But it depends on the property value). On the other hand, personal loans where the maximum loan allowable is Rs 15 lakh.

Lower Interest Rates: LAP is a secured loan therefore interest rates are lower than personal loan.

You can normally take a loan against your self-occupied or rented residential property. This could be a house or even a piece of land.

The eligibility criteria will vary from one bank to another. On the other hand, all other factors are common –

Your income, savings and debt obligations,

Cost or value of the property that is mortgaged

Your repayment track record for other loans such as personal loans, credit cards etc.

Interest rates on loan against property range from 13-16 % and the maximum loan tenure can be up to 15 years.