Loan Against Property (LAP)
A Loan Against Property (LAP) lets you borrow against a residential or commercial property you already own — typically at 50–70% of its assessed value — for almost any purpose, at rates well below personal loans because the property secures the debt. This guide covers how LTV and valuation work, the floating-rate/EBLR structure (with the repo rate at 5.25% as of mid-2026), tenure norms, and documentation and fees. Two points get special attention: the new RBI (Pre-payment Charges on Loans) Directions, 2025, which ban foreclosure/prepayment charges on floating-rate LAP for individuals’ non-business purposes (loans sanctioned/renewed from 1 January 2026), and the tax treatment — LAP interest is deductible only if the funds are demonstrably used for business or for acquiring/improving another property, not for general personal use. We also cover what happens on default — the SARFAESI Act — and the difference between a fresh LAP and a top-up loan (Topic 24).