A loan against property is cheaper than a personal loan and more expensive than a home loan, which is exactly where it should sit. The number that surprises borrowers is not the rate but the tenure: LAP is commonly written over 10–15 years, not 30, so the EMI on the same amount is far higher than a home loan comparison suggests. Put both tenures into the EMI calculator before you assume the two are comparable.
| Typical LAP loan-to-value | 50 – 70 % |
|---|---|
| What it means | Of assessed property value. Commercial and industrial property sit lower. |
as of 2026-08-15 · Lender product terms · reported
What to know
Valuation is where expectations break. Lenders value conservatively, and the loan is a percentage of that conservative number, not of what you believe the property is worth. On a self-occupied residential property in a good location you may see 60–70%; on commercial, industrial or a property with any title complication, considerably less. If what you hold is financial rather than physical, a loan against securities skips the valuation and the mortgage costs entirely.
Be clear-eyed about what you are pledging. This is your home securing a business or consumption need, enforceable under SARFAESI if it goes wrong, so read your rights as a borrower under that process before you sign. That is a rational trade for a productive purpose with a repayment plan; it is a poor one for a shortfall you are hoping to grow out of.
Frequently asked questions
What is the interest rate on a loan against property?
Typically several percentage points above a home loan and well below an unsecured personal loan. The exact spread depends on property type, whether it is self-occupied or let out, your income profile and the loan-to-value ratio.
Can I get a loan against a property that already has a home loan?
Usually you would take a top-up on the existing loan instead — no fresh valuation, no second mortgage registration, no duplicate legal costs. A separate LAP against an already-mortgaged property generally requires the first lender’s consent and is rarely the cheaper route.
Is interest on a loan against property tax deductible?
Only where the funds are used for a purpose the Act recognises — for example, business use claimed against business income, or acquiring another house property. Used for personal consumption, it is not deductible. Keep the trail of how the money was used.
Sources
- Lender published rate cards — Home, personal, vehicle and education loan rate cards — August 2026 — as of 2026-08-15
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