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Loan Against Property

Loan Against Property is fast becoming a common method of raising funds. You should own a property in order to be eligible for this loan at the first instance.

A Loan against property is a loan taken against security of a property. You can avail this loan by keeping your property as a security in favour of the lender. It is also known as secured loan or LAP.


This loan is taken for numerous reasons. Some of the common among them being business expansion, big wedding, foreign trip, funding child’s higher education, medical treatment etc. The amount of loan will depend upon the market value of property. Usually, lending institutions offer 40% to 60% of the market value of property as a loan.


Please note that value of property is not the only criteria considered by lender while sanctioning a loan against property. Other factors like income of the borrower, liabilities, financial track record etc. are also taken into consideration. One must take avail the loan based on repaying capacity since if the borrower fails to make repayment of the loan, the lender can take possession and realize the property mortgaged for availing loan towards repayment of loan. 


Loan against property can be availed on various types of properties, some common among them being-


>Self-owned residential property


>Self-owned rented property


>Self-owned Commercial property


>Self-owned piece of land

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Understanding Loan Against Property

Below are some points, which will help you in understanding the concept of loan against property more clearly-

Mortgage of property

Under loan against property, the property of owner is mortgaged in favour of the lender as a security for purpose of securing the loan. The property acts as a security and a mortgage is created in favour of the lender i.e. bank or financial institution.

Rate of interest

This is a secured loan and in case of default by the borrower, the lender institution will take ownership of the property and realize the loan by disposing off the property.


A loan against property is granted for a period ranging from 1-15 years. As the loan is backed by property, lenders are not willing to grant the loan for too higher tenure.

Loan eligibility

Eligibility for getting a loan against property depends primarily on the market value of property and other factors like income of the borrower, liabilities, financial track record etc.

Loan tenure

As the rate of interest for a loan against property is lower than a personal loan, the EMI is also less. However, you can adjust the EMI based on your repayment capacity.

Secured loan

Loan against property carries less rate of interest as compared to a personal loan. Normally the rate of interest is fixed and varies between 12%-15% depending upon the lending institution.

Note :-

A loan against property is a good way to raise money for your financial requirements. This is more viable option than personal loan, which carries a very high rate of interest. Take a decision carefully after evaluating your repaying capacity as loan against property is a secured loan and in case of any default, the lender take over the possession of property.

Legal Dost is your dost in arranging a loan against property for you at best terms. We have tie-ups with all leading banks and financial institutions and will suggest you best options based on your requirements and objectives. Experience Legal Dost for loan against property requirement and give wings to your needs.