A loan against property (LAP) is a secured loan that banks, housing finance companies, and NBFCs provide against residential or commercial property. These loans are usually offered at a lower interest rate as compared to a personal loan or business loan and are disbursed by NBFCs at a reasonable time. 


LAP, when availed from a credit provider is interest-free but offered at an interest rate of 10%/year. This loan does not require to repay the principal amount in equal monthly installments; it can be repaid any time ten years after the loan has been availed. (For personal loans, the repayment must be done monthly for five years, and then monthly or quarterly for the rest of the outstanding balance.


LAP advantages include flexible tenures, interest rates below the industry standards, quick disbursal, and no collateral needed. Repayment can be made in installments without any prepayment penalty. You can choose from various repayment options like a 12 percent loan against property for up to 10 years with up to 10 years’ take back option, 8 percent for 5 years with a 5-year take-back option, 6 percent for 3 years with a 3-year take-back option or 5 percent for 2 years with a two-year take back option.

However, before you take out a loan against property, here are some things you must consider:



Loan against Property is a great source of funds for borrowers who own property that can be used as Collateral. It is easy to apply for a loan, wherein the applicant fills in an online application and obtains his/her credit score to know about the eligibility of the loan amount. Thereafter, the loan application is processed by the lender, who will check if the borrower’s property is capable of generating enough income to pay off the entire loan amount. Borrowers are required to submit details such as documents on current and future monthly income, residential proof, etc.


  • Property valuation:


The valuation considers the following parameters: – Current market value of the property is the value of the property that may be enhanced by adding a security component such as a mortgage over it. If you are interested in a loan against a property please contact Muthoot contact support phone number for any query.

  • Ownership of property:


The advantage of buying a house under the co-ownership title is that buyers can enjoy the benefits of homeownership without having to commit to a large down payment or a lengthy fixed-term loan. However, you need to get approval from the lender about the title and other specifics about the transfer of property.


  • Tenure:


The loan tenure of a home loan is 15 – 20 years. You can easily repay the loan in smaller monthly installments of interest and principal. Also, the lesser EMI payment will reduce your consumer debt as you would be able to utilize the rest for other purposes.


  • Repayment Capacity:


The Repayment Capacity feature shows you how much loan you can actually afford. The lender will evaluate your repaying capacity with the help of your income statements, repayment history, ongoing loans, etc.

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