Loan Against Property (LAP), also known as mortgage loan, is sanctioned against an asset, which remains with a lender until the loan is repaid. This asset can be a residential, commercial or industrial property. Property loan gives you access to high loan amount at a low interest rate starting at 8.20% p.a. Lenders usually sanction a mortgage loan between 50% and 70% of the property’s market value, which you can repay easily in EMIs stretching up to 20 years. Like unsecured personal loans,LAP Loan or loan against property also can be availed for meeting both personal and business needs other than speculative purposes.

Loan Against Property: Benefits

Benefits of loan against property vary across different lenders and loan schemes. However, some of the common mortgage loan benefits are as below:

• Flexible End Use: Like personal loan, loan against property can be used for both personal and business purposes other than any speculative use
• High Quantum of Loan: Mortgage loan is secured against a high value asset, which gives you access to high loan amount, helping you meet your high-end expenses with ease
• Low Interest Rate: The interest rate on a secured loan is lower than the interest rate on an unsecured loan. This makes loan against property a cheaper and a better alternative to personal loans
• Flexible Tenure: The tenure of loan against property usually extends till 20 years, giving you the benefit of lower EMIs and greater flexibility of repayment
• Balance Transfer Facility: Mortgage loan also comes with the feature of balance transfer, allowing you to refinance your existing mortgage loan to another lender giving lower interest rate or better loan terms
• Tax Benefits: Interest paid for the loan against property provides tax benefits under Section 37 (1) of the Income Tax Act, 1961. If the loan amount is used for financing a new house purchase, the interest paid on the loan will get you tax benefit of up to Rs. 2 lakh under Section 24 of the Income Tax Act

Before applying for a loan against property, it is good if you plan for its repayment. Doing so will help you avoid financial hassles in future. To help you plan your finances in advance, Paisabazaar presents a loan against the property EMI calculator. It is basically an online tool that calculates the EMI amount payable towards your loan repayment. LAP EMI Calculator gives accurate and quick results on the basis of a few basic loan-related details including loan amount, interest rate and tenure. To know your loan against property EMI, click here.