What Is a Loan Against Property?

What Is a Loan Against Property?


Property owners seeking funds for personal or business purposes can consider a Loan Against Property (LAP) as an effective solution. LAP enables unlocking the value of residential or commercial property and accessing substantial funds at competitive interest rates. Federal Bank offers this facility with customer-friendly support, including Feddy, the bank’s intelligent virtual assistant, which can provide instant information on LAP eligibility, features, and application guidance.

Federal Bank combines technological support and expert financial guidance to ensure applicants understand all aspects of LAP, from eligibility criteria to repayment flexibility. The bank’s transparent processes, minimal documentation, and prompt support make LAP an attractive solution for both individuals and businesses looking to fund their goals efficiently.

This article explores the concept of LAP, its key features, and the advantages offered by Federal Bank's LAP.

Insights Into Loan Against Property


A Loan Against Property is a secured loan where residential or commercial property is pledged as collateral to the lender. The loan amount is determined based on the market value of the property and the applicant's repayment capacity. LAP is a preferred financing option due to the larger loan amounts available compared to unsecured loans, often up to 75% of the property’s value.

This financing method allows borrowers to meet high-value financial requirements without selling their property. Unlike unsecured loans, LAP offers lower interest rates and higher borrowing limits, making it an ideal choice for funding significant expenses like business expansion, home renovation, or educational requirements.

Key Features of LAP

Loan Against Property (LAP) comes with several important features that make it a flexible and attractive financing option for property owners.

  1. High Loan Amount: Borrow substantial funds, typically up to ₹20 crore or more, depending on the property value and eligibility.
  2. Competitive Interest Rates: Enjoy lower interest rates compared to unsecured loans, as property acts as collateral, reducing the lender's risk.
  3. Longer Repayment Tenure: Repay LAP over an extended period, usually up to 15 years, ensuring comfortable EMIs.
  4. Flexible End-Use: Utilise the loan amount for various purposes such as business expansion, debt consolidation, children's education, or even purchasing another property.

Benefits of Loan Against Property

A Loan Against Property (LAP) offers multiple advantages that go beyond just accessing funds, helping borrowers manage finances effectively while leveraging their property.

  1. Retain Property Ownership: Unlike selling property, with LAP, borrowers continue to own and occupy the property while accessing the required funds.
  2. Improve Credit Score: Regularly repaying LAP EMIs can boost credit score, enhancing future borrowing prospects.
  3. Access to Larger Funds: LAP offers the ability to raise substantial amounts that unsecured loans cannot match, making it suitable for high-value investments or emergency financial requirements.

Federal Bank's Loan Against Property Advantages

Federal Bank, a leading private sector bank in India, offers a feature-rich Loan Against Property with several advantages:

  1. Attractive Interest Rates: Benefit from Federal Bank's competitive LAP interest rates, starting from just 9.50% p.a.
  2. Loan Up to ₹20 Crore: Access high-value funding requirements against residential or commercial property.
  3. Longer Repayment Tenure: Flexible tenure of up to 15 years ensures affordable EMIs aligned with cash flow.
  4. Simplified Documentation: Minimal documentation required for a hassle-free application process.
  5. Quick Disbursal: Get swift access to funds, with loan disbursal within a few days post-approval and documentation completion.
  6. Doorstep Service: Enjoy the convenience of Federal Bank’s doorstep service, where assistance with documentation and verification can be provided at the customer’s preferred location, reducing the need for multiple branch visits.

Federal Bank combines human expertise and AI-driven support to make LAP applications smoother and faster. Feddy ensures that applicants can clarify queries in real-time, improving transparency and confidence throughout the process.

How to Apply for Federal Bank LAP?

To apply for a Loan Against Property from Federal Bank, follow these simple steps:

  1. Visit the nearest Federal Bank branch or apply online through the bank's website.
  2. Submit the completed application form along with the required documents, such as property papers, KYC documents, and income proof.
  3. The bank will assess eligibility, conduct a property valuation, and inform you of the loan offer.
  4. Upon accepting the offer, complete the necessary formalities, and the loan will be disbursed.

Maximising Property Value With LAP

A Loan Against Property is a smart way to unlock the value of property and access significant funds for one's diverse needs. With its high loan amount, competitive interest rates, and flexible repayment options, LAP offers an attractive financing solution for property owners.

Federal Bank's Loan Against Property stands out with its loan amounts of up to ₹20 crore, extended repayment tenure, simplified documentation, and prompt fund disbursal. Explore Federal Bank’s LAP offering, Property Power, today and take a confident step toward fulfilling financial goals.