Loan against property, popularly known as LAP is one of the best substitutes for personal loan. Almost all banks and NBFCs in India offer LAP to its customers. LAP is basically where you get a loan amount by keeping your property as collateral to the bank or NBFC. You can get a loan by keeping your residential as well as commercial property as collateral. The loan amount given by the bank or NBFC depends on the current value of the property and loan borrower’s financial history. The final amount ranges from 40% to 60% of the land’s current value. The tenure for LAP ranges from 1 to 15 years as per the amount and loan borrower’s ability to pay it off. Even though your property is kept as a mortgage to the bank or NBFC, you are allowed to live in or use the property as you desire. LAP can be taken to fulfill any personal or professional needs of the loan borrower.
LAP is a type of secured loan so the interest rate charges are much lower compared to personal loan. Banks and NBFCs offer two types of interest rates to its customers: fixed interest rate and floating interest rate. The loan borrower can choose any one as per his or her preference. In fixed interest rate the interest rate stays the same throughout loan tenure. In floating interest rate the interest rate changes as per the fluctuations in market throughout loan tenure.
The interest rate in LAP is decided as per the loan borrower’s financial history, loan amount, loan tenure and the bank or NBFC’s policy. The interest rate changes from person to person.
Following is a list of loan against property interest rates offered by various banks and NBFCs in India:
| Bank/NBFC Name | Interest Rate* |
| Capital First Ltd. | 12% onwards |
| Magma Fincorp Ltd. | 14% onwards |
| IndoStar Capital Finance Ltd. | 11.5% onwards |
| Aditya Birla Finance Ltd. | 14% onwards |
| Capri Global Finance Pvt. Ltd. | 10.5% onwards |
| Cholamandalam Investment & Finance Co. Ltd. | 15% onwards |
| Yes Bank | 10% onwards |
| DBS Bank Ltd. | 11.60% onwards |
| Deutsche Bank | 11.50% onwards |
| Dewan Housing Finance Ltd. (DHFL) | 12.50% onwards |
| DMI Housing Finance Pvt. Ltd. | 12.75% onwards |
| Equitas Fin. Pvt. Ltd. | 17% onwards |
| Fed Bank Financial Services Ltd. | 11.60% onwards |
| Fullerton India Credit Co. Ltd. | 13% onwards |
| HDB Financial Services Ltd. | 11% onwards |
| HDFC Bank Ltd. | 9.60% onwards |
| ICICI Bank Ltd. | 11% onwards |
| Hero Fin Corp | 11.5% onwards |
| Shriram City Union Finance Ltd. | 15% onwards |
| IIFL (India Infoline Finance Ltd.) | 10.50% onwards |
| Indiabulls Housing Finance Ltd. (IBHFL) | 10.50% onwards |
| IndusInd Bank Ltd. | 9.65% onwards |
| Karvy Financial Services Pvt. Ltd. | 13% onwards |
| Kotak Mahindra Bank (RHBL) | 9.75% onwards |
| L & T Finance Ltd. | 11.75% onwards |
| Axis Bank Ltd. | 12.50% onwards |
| Ratnakar Bank Ltd. | 12.90% onwards |
| Reliance Capital Ltd. | 18.25% onwards |
| Religare Housing Dev. Fin. Serv. Ltd. | 13.20% onwards |
| Standard Chartered Bank | 9.50% onwards |
*The above mentioned statistics are as of April 2018. These can change as per the bank/NBFCs policy terms and the loan borrower’s profile.
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