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Beginners Guide to Loan Against Property (LAP)

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The basic idea of LAP

As the name says it all, loan against property is the loan you get from the bank against the mortgage of your property. This type of loan comes under the category of secured loan. The security in this case is the property of the borrower. Here, the property can include your home, your commercial property, or land. The amount of loan is decided based on the market value of your property.

Points to know about LAP

You can apply for a loan against property for a number of reasons that can range from planning a big wedding, funding your children’s education, or expanding your business. However, apart from the value of your property, the bank will consider various checkpoints such as your payment record of other loans, your income, savings and the stability of your employment or business.

Documents required for LAP

To obtain the LAP, you need to ensure that you have the necessary documents.

  • The requirement list includes proofs of identity, address, income, age and educational qualifications and ownership documents of property.

  • Other documents may differ depending from bank to bank.

  • You also need to provide the bank statements of the previous six months and the cheque for the processing fee.


The reason why people go for a loan against property in comparison to personal loan is the lower interest rates. The interest rate ranges from 12 to 16 percent which makes it one of the cheapest loans after a home loan. The tenure of the loan can go upto 15 years. Considering all these elements of LAP, it offers a flexible approach to raise money for financing a big expense. Probably the only disadvantage of the loan is that the inability of its repayment can lead to the bank taking possession of your property. Nevertheless, if you accurately plan your finances and the interest payments, the loan can be repaid smoothly.


You can also visit YES BANK's website to know more about their Savings Account, Fixed Deposit and Personal Loan.

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