What Is a Loan Against Property?
A Loan Against Property (LAP) is a secured loan where borrowers pledge residential, commercial, or industrial property as collateral to obtain funds.
In 2026, LAP remains one of the most cost-effective borrowing options due to lower interest rates and longer repayment tenures.
Key Features of Loan Against Property
- Lower interest rates compared to unsecured loans
- High loan amounts based on property value
- Long repayment tenure
- Flexible usage for personal or business needs
- Available for salaried and self-employed individuals
Loan Against Property Interest Rates 2026
Interest rates depend on property type, location, and borrower profile.
| Lender Type |
Interest Rate (p.a.) |
Loan-to-Value |
Tenure |
| Public Sector Banks |
8.25% – 10.75% |
Up to 65% |
Up to 20 years |
| Private Banks |
9.00% – 12.00% |
Up to 70% |
Up to 20 years |
| NBFCs |
11.00% – 15.00% |
Up to 60% |
Up to 15 years |
Eligibility Criteria for LAP
- Property must be legally clear and owned by applicant
- Stable income source
- Good credit score
- Property located in approved areas
- Age within lender limits
Documents Required
- Property ownership documents
- Identity and address proof
- Income proof and bank statements
- ITR and financial statements
- Property valuation report
Loan Against Property EMI Example
If you take a LAP of ₹50,00,000 at 9.5% interest for 15 years:
- Monthly EMI: ₹52,200 (approx.)
- Total interest payable: ₹43,96,000 (approx.)
- Total repayment amount: ₹93,96,000 (approx.)
Advantages and Disadvantages
Advantages
- Lower interest cost
- High loan eligibility
- Long repayment tenure
- Flexible end-use
Disadvantages
- Property at risk in case of default
- Long approval process
- Legal and valuation charges
How to Choose the Best LAP in 2026
- Compare loan-to-value ratios
- Check processing and valuation fees
- Choose fixed or floating interest wisely
- Assess total repayment cost
- Review foreclosure terms
Frequently Asked Questions (FAQs)
Can I use LAP for business purposes?
Yes, LAP funds can be used for both personal and business needs.
Is property insurance mandatory?
Some lenders may require property insurance.
How long does approval take?
Approval usually takes 1–3 weeks due to property verification.
Can I prepay my LAP?
Yes, most lenders allow prepayment with minimal charges.
Author: All Finance Store Secured Loans Team
Expertise: Mortgage & Property-Based Financing
Last Updated: January 2026
Disclaimer: This page is for informational purposes only. Loan Against Property terms, interest rates, and eligibility vary by lender. Always verify details with official sources before applying.