what is LAP

Loan Against Property (LAP) is a secured loan in which you pledge your residential, commercial, or industrial property as collateral to a bank or NBFC. You continue to own and use the property while the lender keeps a legal charge on it until the loan is repaid.How it works You mortgage your property to the lender. The lender evaluates the property’s market value and your repayment capacity. Based on both, the lender sanctions a loan. After full repayment, the charge on the property is removed.

Key features

Loan amount: Typically 50%–75% of the property’s market value (varies by lender and property type).

Interest rate: Usually lower than unsecured business or personal loans because the loan is backed by property.

Tenure: Up to 15–20 years with many lenders.

Repayment: Monthly EMIs.Eligible properties Residential house or flat Commercial office or shop Industrial property (subject to lender policy) In some cases, certain types of land (depending on the lender)Common uses Business expansion Working capital Education expenses Medical emergencies Home renovation Debt consolidation Marriage or other major personal expenses (subject to lender policies)Advantages Higher loan amounts than unsecured loans. Lower interest rates than personal loans. Longer repayment tenure. You can continue living in or using the property.Things to keep in mind If you fail to repay the loan, the lender may take legal action and ultimately recover dues by enforcing its security interest over the property, following applicable laws and procedures. There are processing fees, legal and technical verification charges, and documentation requirements.Example Property market value: ₹1 crore Loan-to-Value (LTV): 60% Loan sanctioned: ₹60 lakh Interest rate: 9.5% p.a. (example) Tenure: 15 yearsYou receive ₹60 lakh and repay it through EMIs while continuing to own and occupy the property, provided you keep up with the repayments.

Since you’re building Fin Dwell Capital, offering LAP can be a valuable service for: Business owners Self-employed professionals Traders MSMEs Doctors Chartered Accountants Shop owners Manufacturers These customers often use LAP to access larger amounts at lower interest rates than unsecured business loans.