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How does Loan Against Property (LAP) Help a Borrower?

By IIFL Home Loans | Published On Aug 07 2023 11:19 AM 1 min read 132 views 1585 Likes
IIFL Home Loans

Are you in need of funds to fulfil your dreams or manage unexpected expenses? Look no further! Loan Against Property (LAP) is here to unlock the value of your property and provide you with a multitude of benefits. By leveraging your property as collateral, LAP offers lower interest rates, higher loan amounts, flexible repayment options, and the freedom to use the funds as per your needs. Whether you want to renovate your home, expand your business, or consolidate debts, LAP is a powerful financial tool that can help you achieve your goals. 

What is Loan Against Property?

Say that you are in urgent need of high capital to support your business but your financial history is not looking very promising at the moment. In such cases, lenders may refuse to offer you a high loan amount given the risk of non-repayment. But you own a property whose value is comparable to the amount that you need. This is where Loan Against Property comes in! An LAP loan means a loan where the lender uses your property as security while offering you your required capital. 

LAP is a type of secured loan where you pledge your property (residential or commercial) as collateral to avail funds from a lender. The property acts as security, giving the lender assurance that they can recover their money if you fail to repay the loan. This may seem serious but do not fret because it is designed keeping the needs of the loan borrower in mind. 

For instance, IIFL Home Loans’ secured business loan comes with features such as flexible repayment options, quick approvals, and balance transfers, among others. Here are some important benefits of a loan against property.

Loan Against Property Benefits

a) Higher Loan Amounts: With LAP, you can access substantial funds based on the value of your property. At IIFL Home Loans, you get loans up to 65% of the property's current market value, enabling you to meet significant financial requirements.

Get higher capital with LAP in the shortest time at IIFL Home Loans

b) Flexible Tenure: Loan Against Property offers extended repayment tenures of around 10 years. The higher the property’s value, the longer the repayment term. This flexibility allows you to choose a tenure that suits your repayment capacity and helps in managing monthly instalments more comfortably.

d) Multipurpose Use: Unlike some other loans, LAP gives you the freedom to utilise the funds for various purposes. Whether it is funding your child's education, expanding your business, investing in a new business venture, or covering medical expenses, LAP provides the necessary flexibility. You can avail of instant financial assistance for your small businesses/SMEs/MSMEs with IIFL Home Loans. 

e) Consolidation of Debts: If you have multiple loans or credit card debts, LAP can be an effective tool for consolidating them into a single loan at a lower interest rate. This simplifies your finances and helps you save money on interest payments.

Now that the benefits are apparent, here’s how you can apply for a loan against your property. 

How to Get a Loan Against Property in India?

Improve your chances of LAP approval
  1. Start by researching and comparing financial institutions that offer LAP, their interest rates, loan terms, eligibility criteria, etc. to make an informed decision.

  2. Now check their eligibility criteria. Your age, income, credit score, and property value shall determine your eligibility for LAP. Read more on IIFL Home Loans’ eligibility criteria to apply for their secured business loan.

  3. Collect lender-specified identity proofs, address proofs, income proofs, property documents, bank statements, etc. PAN card is mandatory at IIFL Home Loans.

  4. Visit the lender's branch or utilise their online application portal to apply for the loan. Fill in the application form with accurate details and submit the required documents. 

  5. The lender will assess the value of your property to determine the loan amount they can offer. They will also verify the legal documents related to the property.

  6. Once your application is reviewed and approved, the lender will provide you with a loan offer. Once you accept, the loan amount will be disbursed to your account.

To Sum Up!

Loan Against Property means a powerful financial tool for you that can help you unlock the value of your property and address your diverse financial needs. With lower interest rates, higher loan amounts, and flexible repayment options, LAP offers a compelling borrowing option. Remember to choose a reliable lender, assess your eligibility, gather the necessary documents, and apply for the loan with confidence. Leverage the potential of your property to realise your dreams and aspirations!


1. Who can apply for a loan against property at IIFL Home Loans?

IIFL Home Loans offers a multi-purpose secured business loan where you can pledge your property as collateral. Eligibility criteria are as follows:

  • Indian resident

  • 21 years to 70 years old

  • Salaried or self-employed

2. How much loan can I apply for with LAP?

The loan amount at IIFL Home Loans ranges from Rs 2 Lakhs to Rs 10 Crores. 

3. How does LAP work?

Loan Against Property (LAP) works by leveraging the value of your property to secure a loan from a lender.

  • When you opt for LAP, you pledge your property, whether residential or commercial, as collateral. 

  • The lender assesses the property's current market value and offers you a loan amount based on a percentage of that value. 

  • You repay the loan through regular monthly instalments over a flexible tenure.

  • In the event of default, the lender has the right to take possession of the property through the foreclosure process. 

4. Are there any risks associated with loans against properties?

One significant risk is the possibility of losing your property if you default on the loan. Since the property is pledged as collateral, the lender has the right to seize it through the foreclosure process to recover their funds. 

5. Do I get any tax benefits on a loan against my property?

Yes, under Section 24(b), the income tax rebate can be availed by salaried people on the interest paid on LAP (provided the loan is being used to build a new house). Then, under Section 37(1), if the LAP is used for business or professional purposes, the interest paid can be claimed under income tax deductions. However, these tax benefits may vary based on unique circumstances and should be verified with a tax professional to ensure compliance.


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Disclaimer: The information contained in this post is for general information purposes only. IIFL Home Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment, etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness, or of the results, etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability, and fitness for a particular purpose. Given the changing nature of laws, rules, and regulations, there may be delays, omissions, or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Home/ Loan Against Property/ Secured Business Loan/ Balance Transfer/ Home Improvement Loan/ NRI Home Loan/ Home Loan for Uniformed Services) loan product specifications and information that may be stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Home/ Loan Against Property/ Secured Business Loan/ Balance Transfer/ Home Improvement Loan/ NRI Home Loan/ Home Loan for Uniformed Services) loan.