Which law applies. Section numbers on this page are those of the Income-tax Act, 2025, which took effect on 1 April 2026 and governs tax year 2026-27 onwards. Section 24(b) and section 37(1) of the Income-tax Act, 1961 correspond to section 22(1)(b), with the interest limit in section 22(2), and section 34(1) of the 2025 Act. Where this page uses the familiar shorthand 80C, the corresponding provision of that Act is section 123. The Income-tax Act, 1961 was repealed with effect from 1 April 2026; its section numbers apply only to tax years before 2026-27.

Secured Loan

LAP Calculator — Loan Against Property EMI

Calculate EMI for Loan Against Property. Use your residential or commercial property as collateral at lower rates.

By Aditya GuptaAccounting & Finance EducatorFormula-based tool — no statutory rate appliesLast reviewed: 16 September 2026

Method: Standard reducing-balance amortisation applied to the sanctioned amount after the lender's loan-to-value haircut. Outputs are illustrative and depend entirely on the assumptions entered.

50–75% LTVLower RatesUp to 15 Yrs

Visual Breakdown

EMI Breakdown

Principal

Interest

LAP — Loan Against Property Explained

LAP is a secured loan where your residential or commercial property serves as collateral. Banks lend 50-70% of property’s market value. Lower rates than personal loans + longer tenure + larger amounts make it attractive for major capital needs (business expansion, child’s foreign education, large medical procedure).

LAP Interest Rates (Indian Banks)

Lender	Salaried Rate	Self-Employed Rate
SBI	9.75-11.50%	10.50-12.00%
HDFC Bank	9.50-11.00%	10.25-12.00%
ICICI Bank	9.85-11.50%	10.80-12.50%
Axis Bank	10.00-11.50%	10.75-12.25%
LIC Housing	9.95-11.30%	10.50-12.00%
PNB Housing	10.00-12.00%	10.75-13.00%
Tata Capital	10.50-13.50%	11.25-14.50%
Bajaj Finserv	10.50-15.00%	11.50-16.00%

LAP vs Other Loan Options

Aspect	LAP	Personal Loan	Home Loan
Interest Rate	9.5-13%	11-22%	8.5-10%
Tenure	10-20 years	1-5 years	20-30 years
Loan-to-Value	50-70%	N/A	80-90%
Collateral	Property (existing)	None	Property (being bought)
Use Restriction	None (multi-purpose)	None	For property purchase only
Max Loan	₹50 lakh – 25 crore	₹40 lakh (rare ₹50L)	Up to property value × LTV
Tax Benefit	Limited (interest deductible if for business)	None	Section 22(1)(b) ₹2L + 80C principal

LAP is ideal for: business expansion, large medical procedures, child’s foreign education, debt consolidation. Avoid for: vacation, weddings, vehicles. The asset risk (property under collateral) is too high for non-essential needs.

LAP Eligibility — Property & Borrower

Property Criteria

Clear title with all original documents
Located in cities/towns where lender operates (most LAP only in tier-1/2 cities)
Free from encumbrance (no existing mortgage, litigation)
Marketable / saleable in distress scenario
Conforms to local zoning regulations

Borrower Criteria

Age 21-65 (salaried); 25-70 (self-employed)
Net monthly income ₹50K+ (typically)
CIBIL score 700+; 750+ for best rates
Property owned 2+ years preferred
Co-owner of property must be co-applicant

LAP Tax Treatment

Unlike home loans, LAP doesn’t qualify for blanket tax deductions. Tax benefits depend on USE of proceeds:

For business: Interest fully deductible under Section 34(1) as business expense
For investment (e.g., buying another property): Interest can be capitalised into cost basis
For personal use (medical, education): NO tax benefit on interest paid
For repaying home loan: NO double deduction; check carefully

More FAQs

Can I get LAP on commercial property?

Yes — commercial property LAP is widely available. Same lenders, similar rates (sometimes 0.5% higher). LTV often higher for commercial (up to 75%).

What if I default on LAP?

Bank invokes SARFAESI Act, can auction property after 60-day notice. Recovery is faster than for unsecured loans. Critical to maintain CIBIL discipline.

Can I do partial prepayment of LAP?

Yes — most banks allow free prepayment on floating-rate LAP. Fixed-rate may have 2-4% penalty. Annual partial prepayment significantly reduces total interest.

How is LAP processed?

1-3 weeks typically. Includes property valuation (1-2 days), legal verification (2-7 days), bank approval, sanction letter, signed documents, mortgage registration with sub-registrar, disbursement.

What is “Overdraft against Property”?

Variant of LAP where you can withdraw as needed up to sanctioned limit. Pay interest only on used amount. Useful for irregular cash needs (business). Available from select lenders.

Can NRIs avail LAP?

Yes — special NRI-LAP products from major banks. Slightly higher rates. NRE/NRO account for EMI servicing. KYC and documentation more complex.

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