What is the Loan Against Property?
A Loan Against Property is secured against residential or commercial property you already own. Because the lender holds collateral, rates are far lower than personal loans — typically 9–13% versus 14–24% — with tenures up to 15–20 years.
Eligibility is the lower of two tests: a percentage of property value (usually 50–70% LTV) and what your income supports.
Formula & worked example
By income = affordable EMI discounted over tenure
Sanctioned = lower of the two
Worked example: a ₹1.5 crore property at 60% LTV supports ₹90 lakh. But ₹1,50,000 income at 55% FOIR less ₹20,000 of existing EMIs leaves ₹62,500 for the EMI, which at 10.5% over 12 years supports about ₹51.7 lakh. The sanction is therefore ₹51.7 lakh — income is the binding constraint, not the property.
How to use this loan against property calculator
- Enter the property's current market value as a lender's valuer would assess it.
- LTV is typically 50–60% for residential and 40–50% for commercial.
- Enter net income and existing EMIs for the income test.
- The lower of the two figures is what you will actually get.
Smart tips
- LAP rates are 4–10 percentage points below personal loans — always consider it before unsecured borrowing.
- Your property is at genuine risk. Never use LAP for consumption or speculation.
- Interest is deductible if the funds are used for business or to buy another property.
- Lenders value conservatively, often 10–20% below what you believe the property is worth.
- Processing takes 3–4 weeks due to legal and technical verification — not a fast option.
Frequently asked questions
How much loan can I get against my property?
Usually 50–70% of market value for residential property, subject to your income supporting the EMI. The lower of the two limits applies.
What is the interest rate on a loan against property?
Typically 9–13%, considerably lower than personal loans because the property secures the debt.
Can I get LAP on a property that already has a home loan?
Yes, as a top-up or second charge, but the combined borrowing must stay within the LTV limit.
Is LAP interest tax deductible?
Only if the funds are used for business purposes or to purchase another property. Personal use does not qualify.
Want the theory behind the numbers? Read our LAP guides on the Money Blog.