A loan against property (LAP) is a secured loan where individuals can leverage their property as collateral to obtain funds from a financial institution. This form of financing offers borrowers access to substantial capital at comparatively lower interest rates than unsecured loans.

The property offered as collateral for a loan against property can be residential, commercial, or industrial, and its value determines the sanctioned loan amount. One of the primary advantages of LAP is its versatility; borrowers can utilize the funds for various purposes such as business expansion, debt consolidation, education expenses, or any other financial need.

However, it’s essential for borrowers to exercise caution and ensure timely repayment, as defaulting on payments can pose the risk of losing the pledged property as collateral.