Planning to avail of loan against property? Know the rates offered by banks

  • Loan against property (LAP) is a secured loan that people use to meet bigger expenses such as business expansion, child's education, medical emergencies, and weddings. 

  • Unlike home loans that provide tax benefit of up to Rs 200,000 per year on interest repayment and Rs 150,000 on principal repayment, LAP does not provide any tax benefit.  

  • Avoid over-leveraging on this loan as doing so can result in a loan default. You could end up losing the property against which you have taken the loan.  

  • Loan to value (LTV) ratio is generally restricted to 50-60 per cent of the property’s market value.  

  • Loan can vary from Rs 500,000 to Rs 5 billion. Tenure can be up to 20 years.  

  • Your loan request could be turned down if the property being offered as collateral is disputed. 

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