March 26, 2023


General Blog

Interest Rate and Repayment Tenure Are Key Deciding Factors for Loan Against Property

Loan against property is an excellent financial service that allows people to avail credit against their asset for emergency purposes. Read on to know more about the important factors you must consider before making a borrowing decision.

When you need a big amount during an emergency, you may most probably turn to a lender for a quick personal loan. However, you must know that such loans have a high interest rate and the repayment may take a toll on your finances. To avoid such hassles and yet get the desired amount, the best alternative is to apply for a loan against property or LAP.

LAP allows you to leverage your immovable property to raise funds against it for personal or business purposes. The best thing about applying for this type of credit is that you retain the full ownership of the property even while you pledge it with the lender. This is one of the reasons why LAP is a popular credit option.

While availing a loan against property is easy, you must know that the interest rate and the loan tenure play a significant part during repayment. Many people consider these factors as one of the key factors to make a borrowing decision.

Interest rate

The interest rate is one of the important factors to consider while applying for a loan against property as it has a direct impact on affordability and repayment. Higher the interest rate, the higher is the EMI (equated monthly instalment) amount. If you compare the interest rate from different lenders, you may find that many reputed financial institutions offer LAP at competitive interest rates starting from 8.90%.

Generally, the interest rate varies based on the type of property your pledge to the lender. For example, if you pledge a self-occupied residential property, the interest rate is lower as compared to the commercial property. Also, the interest rate varies based on the loan amount you wish to avail.


Apart from the interest rate, another critical factor that you must carefully consider while applying for a loan against property is the duration. The loan duration or tenure signifies the amount of time you have to repay the amount. Generally, most lenders in India offer LAP for a maximum period of 15 years.

The LAP duration is much higher than the personal loan. This gives you plenty of time to repay the amount without any hassles. Additionally, the lenders give you the flexibility to choose the tenure; and you can choose the duration based on your repayment capacity.

If you can afford to pay a higher EMI, you can opt for a short-term loan for 5-10 years. This will not only help you repay the loan faster but also reduce your overall interest payment. But, if you cannot afford to pay a large amount every month, you can opt for a 15-year loan. While this may increase the overall interest payment, the EMI will be affordable making it easier for you to repay the amount.

Meet your emergency fund needs with LAP

One of the significant benefits of availing LAP is that the lenders do not have any restriction on the end usage of the funds. You can use the amount for any purpose you want like business expansion, home renovation, taking a world tour, paying your child’s education fee, etc.

LAP is an excellent way to get the desired funds at an affordable interest rate. Make sure that you do your research well and choose the right lender so that the interest is low and choose the tenure wisely so that the EMI is affordable.