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Property Loan

Loan Against Property

Loan Against Property scheme is a secured personal loan which you can avail by pledging your property as a security or a collateral. These personal loan schemes are also known as mortgage loans. Besides understanding what a Loan Against Property is, it is important to note that there is no restriction on how the borrower uses the amount sanctioned through this loan. It can be used to meet any personal or business requirements.

Features and Benefits of Loan Against Property

  • Lower rate of interest: Secured loans usually have a lower rate of interest when compared to unsecured loans. In addition to that, if you have a good credit score and credit history, the chances of you getting a loan at a low rate of interest goes up.
  • Simple documentation and approval process: The process of documentation and approval of loans is generally simple when it comes to a loan against property. The property against which the loan is availed acts as collateral in this case. This allows lenders to go forward with an easy documentation process.
  • Flexibility in repayment of the loan: Most loans against property offers a flexible loan repayment tenure. On the basis of the lender that you choose, you can avail a loan repayment tenure of as long as 20 years.
  • Continuous ownership of the property: In case of a loan against property, the ownership of the property is retained with the borrower. When you offer your property as a collateral for a loan, the ownership does not change. This also allows you to sell the property in case you are unable to repay the loan.
  • Availability of pre-closure option: You have the option to pre-close your loan against property if you wish to do the same. If the loan that you have availed comes with a variable interest rate, you will not be required to pay any penalties for the pre-closure of the loan. However, you will be required to pay a nominal amount if your loan was on fixed interest rate.
  • Optimal utilisation of the property: In case you avail a loan and you have a property which you offer as a collateral, you get to satisfy your financial needs with the loan amount which will be at par with the property. At the same time, you also get to retain your property. You can decide to not sell your property and still avail enough money to meet your requirements that too at affordable rates of interest.

Commonly uses of LAP

  • Sponsoring higher education
  • Purchasing or constructing a new house (down payment)
  • Home renovation
  • Meeting medical expenses
  • Purchasing high-end equipment
  • Restocking inventory
  • Replenishing working capital
  • Debt Consolidation
  • Funding a wedding