Loan Against Property (LAP) is a secured loan you take against your owned residential or commercial property. Banks lend up to 60-70% of property value at lower rates than personal loans (typically 9-13%) but higher than home loans, with tenures up to 15 years. This calculator computes EMI, total interest, and the maximum eligible loan based on your property value and income.
What is LAP?
LAP is one of India's most under-utilised financing options. You pledge an owned property as collateral; the bank disburses up to 60-70% of its value as a loan you can use for any purpose — business expansion, kid's education, medical emergencies, or debt consolidation. Because it's secured, rates are far lower than personal loans (which run 12-18%) but higher than home loans (since the use-case is broader and less regulated).
Unlike a home loan, you don't lose tax benefits under Section 24 — there are no deductions on LAP interest unless the funds are explicitly used for buying/constructing a new home. Treat LAP as a financing tool, not a tax-saving instrument.
How LAP eligibility and EMI work
Banks compute two ceilings: (1) Loan-to-Value (LTV), typically 60-70% of property's market value, and (2) FOIR-based EMI affordability, typically 50-60% of net monthly income. Final approved amount is the lower of the two.
EMI uses the standard reducing-balance formula at the LAP rate (9-13% in 2026) over the chosen tenure (5-15 years). LAP rates are usually 1-2% higher than home loan rates because the end use is unrestricted.
- P
- Loan amount—min(LTV × property value, FOIR-based capacity)
- r
- Monthly rate—annual LAP rate / 12 / 100, typically 0.75-1.1%
- n
- Months—tenure × 12, max 180 months
How to use this calculator
Enter your property's market value
Use a recent comparable sale or broker valuation for the property you'll pledge. Banks will conduct their own valuation; their figure is usually 5-10% lower than market price.
Set the LTV ratio
60% is conservative; 70% is the typical max banks offer. Higher LTV means higher EMI, smaller equity buffer, and slightly higher rate.
Pick the rate and tenure
Rates 2026: 9-11% for LAP on residential property, 11-13% for commercial. Tenure 5-15 years; longer tenure means lower EMI but more total interest.
Read the EMI and total cost
Calculator shows monthly EMI, total interest over the tenure, and a comparison with personal loan at the same amount/tenure (where rates are higher).
When to use it
Business expansion
Owners with a residential property worth ₹2-3 crore can unlock ₹1.4-2.1 crore at 10% — far cheaper than a business loan at 14-18%. Use the calculator to size the working capital you can deploy.
Debt consolidation
If you have multiple high-rate debts (credit cards at 36-42%, personal loans at 14-18%), an LAP at 10% can refinance them. The interest savings are dramatic, often 50-70%. Run the calculator to size the consolidation.
Big-ticket education funding
Education loans cap at ₹1.5 crore (Section 80E deductible interest). For ₹2-3 crore needs (US/UK STEM programs), LAP fills the gap at competitive rates.
Common mistakes to avoid
Using LAP for low-return investments
Borrowing at 10% to invest in 7% FDs is a guaranteed loss. LAP makes sense only when your use case generates returns above the LAP rate, or when consolidating higher-rate debt.
Maxing the 70% LTV for marginal use cases
Higher LTV = higher EMI = thinner buffer if income drops or rates rise. Borrow only what you genuinely need, not the maximum eligible.
Forgetting valuation and processing fees
LAP processing fees are 1-2% of loan + GST + legal/valuation charges (₹15,000-50,000). Add to total cost when comparing options.
Frequently asked questions
What's the difference between LAP and a home loan?
What's the maximum LAP I can get?
Can I claim tax benefits on LAP interest?
Is foreclosure penalty applicable on LAP?
What documents are needed for LAP?
Can I get LAP on a property I co-own?
References
- RBI guidelines on Loan Against Property— Reserve Bank of India