A Loan Against Property is a type of secured loan where you pledge an owned property — residential, commercial, or industrial — as collateral to borrow a substantial amount from a bank or NBFC. Unlike a home loan (which is specifically for purchasing property), LAP can be used for any financial need: business working capital, education, medical treatment, wedding expenses, or debt consolidation.
The lender assesses your property's current market value and extends a loan typically ranging from 50% to 75% of that value — this ratio is called the Loan-to-Value (LTV) ratio. Since the loan is secured against a hard asset, interest rates are significantly lower than unsecured alternatives like personal loans or business loans.
