Best ways to fully utilize the LAP Loan

LAP Loan

Best ways to fully utilize the LAP Loan

Apr 16, 2021, 10:21:02 AM Business

At times it gets quite a hectic task to accumulate a huge amount of funds immediately. LAP acts as a great source of money for such situations. The Loan Against Property (LAP) lets individuals mortgage their property and borrow an appropriate amount against it. The LAP segment in the lending market is witnessing steady growth in India. It’s a multipurpose loan system with almost no restrictions on how one can spend the borrowed amount. You can avail of LAP for a big expense, personal use or to fund your business. Possessions that are considered to be eligible for Loan Against Property are a personal home, a plot of land owned by the loan applicator and commercial property. 

Since the property is taken as collateral, the risk associated with the lender is very low and the interest rates are lower as well. It’s also easier for self-employed/non-salaried employees to get LAP approved in real-time, which is not the case in personal loans. The amount that one can borrow depends on the overall value of the property. It generally ranges between 60-70% of the property’s value. 

Though Loan Against Property seems to be an easy procedure, you need to ensure the authenticity levels of certain documents like identity proof, address proof, Form 16, income proof, tax-related agreements, property deeds to get the work done.    

Go through the article to get a clear overview of the best ways one can utilize LAP in a safe and secure manner:


Sometimes opting for higher education from renowned institutions or foreign countries can be expensive. People who can’t afford it on their own often opt for an education loan. But an education loan comes with quite a variety of restrictions and the person needs to qualify for certain academic eligibility to get the loan approved. And that’s why a LAP might be a better option. The repayment burden is also less, with a longer tenure stretching up to 15 years. You can fund your children’s education with lower interest rates and more freedom than an actual education loan.

Balance transfer feature

Most lending institutions add the feature of “Balance Transfer” with LAP. This feature allows you to transfer your outstanding principal amount on your existing LAP with a relatively lower interest rate based on your credit history. This will certainly bring down the EMI amounts, save on interest, and reduce the overall debt burden. Additionally, individuals can also avail of a higher top-up LAP over and above the balance transfer.


Starting a business or expanding an existing one is one of the best ways to fully utilize a LAP. If you're motivated enough to start a business, need funding, and have a property to pledge, you can easily get funding with a LAP. With this secured loan, you can get substantial funding while still using your pledged property. Since you’ll be pledging collateral, eligibility criteria are simple without depending on your income and it can help you get your project off the ground. One of the most attractive things about LAP loans for a business is that it allows you to align your loan as per your business’s need. 

Medical expenses

Healthcare and hospital bills are quite expensive nowadays and not everyone is able to meet the immediate expenditures. Some medical emergencies cost much more than the overall amount covered by health insurance. In such an emergency situation, when the main focus is on getting the best possible treatment, a loan against property acts as a funding aid. The loan gets sanctioned without much hassle. The interest rates and eligibility criteria are quite simple in comparison to a personal loan. You can use the loan amount to pay for hospital bills, surgeries, buy medicine, chemotherapy and other expensive treatments.

Avail Tax benefits

Another way to utilize LAP is to avail tax benefits on interest payments. This assures double benefits under Income Tax Act, 1961 for specific end-use. Loans availed against properties to start a business, expand it or achieve other business objectives enable loan seekers to avail tax benefit on LAP interest paid under Section 37(1) of the Income Tax Act. Availing LAP for financing residential property, lets individuals enjoy tax deduction under Section 24 of the Income Tax Act. However, you can not enjoy these tax benefits for personal end uses such as education, traveling and medical expenses. 

If you’re looking for a hassle-free option that assures substantial funding, then LAP may be your best way out. To get the best deal, it’s essential to do enough research and find a lender offering the best interest rate. It is always advisable to request a loan amount as per your repayment ability because the lender possesses the sole right to sell off the property and recover the loan amount. 

Published by Sakshi Kharbanda

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