Loan Against Property (LAP) Calculator India

Q: What is Loan Against Property (LAP) and how is it different from a home loan?

LAP is a secured loan where you mortgage an existing property you already own to get funds for any purpose — business, education, medical, or debt consolidation. A home loan is specifically for purchasing or constructing a new property. LAP has a lower LTV (60-70% vs 80-90% for home loans), slightly higher interest rates (9-12% vs 8-9.5%), and tax benefits only if funds are used for business or property purchase.

Q: What LTV ratio can I expect for LAP in India?

LTV for LAP typically ranges from 60% to 70% for residential property and 50% to 60% for commercial property. SBI offers up to 65% for salaried and 60% for self-employed. HDFC and Bajaj Finance go up to 65-70% for prime residential properties. The property is valued by a bank-approved valuer.

Q: Is there any tax benefit on Loan Against Property?

Tax benefit depends on how you use the loan. Business use: full interest deduction under Section 37(1). Property purchase: Section 24(b) deduction up to ₹2,00,000/year for self-occupied. Personal expenses (wedding, travel, medical): no tax deduction on either interest or principal. Section 24(b) is only available under the Old Tax Regime.

Q: Can I prepay my LAP without penalty?

Yes, for floating-rate LAP taken by individual borrowers, banks cannot charge any prepayment or foreclosure penalty — this is mandated by RBI. You can make partial prepayments or close the entire loan early without any extra charges. Fixed-rate LAP may carry a 2-3% prepayment penalty.

Q: What are the current LAP interest rates in India (March 2026)?

As of March 2026: SBI 9.15-10.85%, HDFC Ltd 9.50-11.50%, ICICI Bank 9.25-11.75%, Bajaj Finance 9.00-14.00%, Bank of Baroda 9.15-11.25%, Kotak Mahindra 9.50-12.00%. Rates depend on credit score, income stability, property type, and existing banking relationship.

Calculate how much loan you can get against your property, compare LAP with personal loan and home loan top-up, and check tax benefits based on loan purpose. SBI, HDFC, ICICI, Bajaj Finance rates for FY 2025-26. Reducing balance EMI formula, processing fee with GST, and Section 24(b)/37(1) tax deduction calculator.

Find out how much loan you can get against your property

Property market value

₹

Estimated market value of your residential or commercial property

LTV ratio

Loan-to-Value: typically 60-70% for residential, 50-60% for commercial

Interest rate

% p.a.

SBI: 9.15-10.85%, HDFC: 9.50-11.50%, Bajaj: 9-14%

Loan tenure

years

LAP tenure: typically 5-20 years

Processing fee

Usually 0.5-1% of loan amount + 18% GST

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How to Use This Calculator

LAP Eligibility tab

Enter your property market value, LTV ratio (typically 60-70%), and interest rate. The calculator shows the maximum loan you can get, your monthly EMI, total interest payable, and processing fee with GST. Use "More options" to adjust tenure and processing fee percentage.

LAP vs Alternatives tab

Enter the loan amount you need and the calculator compares three options side by side: Loan Against Property (secured, 10%, 15yr), Personal Loan (unsecured, 14%, 5yr), and Home Loan Top-up (9%, 20yr). See which option gives you the lowest EMI, lowest total interest, and best overall value for your situation.

Tax Benefit Check tab

Select your loan purpose and tax slab to see if your LAP qualifies for tax deduction. Business use gets full interest deduction. Property purchase gets Section 24(b) benefit (up to &rupee;2 lakh). Personal expenses get no deduction. The calculator shows your exact annual tax saving.

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The Formula

LAP EMI is calculated using the standard reducing balance EMI formula:

EMI (Reducing Balance):
EMI = P × r × (1 + r)ⁿ / ((1 + r)ⁿ − 1)

Where:
P = Loan principal (property value × LTV%)
r = Monthly interest rate (annual rate / 12 / 100)
n = Total number of months (years × 12)

Maximum Loan Amount:
Max Loan = Property Market Value × LTV Ratio
Residential: LTV = 60-70%, Commercial: LTV = 50-60%

Processing Fee:
Fee = Loan Amount × Processing Fee %
Total Upfront = Fee + (Fee × 18% GST)

Tax Benefit (if applicable):
Business use — Full interest deduction (Section 37(1))
Property purchase (self-occupied) — Up to &rupee;2,00,000/year (Section 24(b))
Property purchase (let-out) — Full interest deduction (Section 24(b), no cap)
Personal use — No tax benefit

The reducing balance method means interest is calculated on the outstanding principal each month, not on the original loan amount. As you pay EMIs, the principal portion increases and the interest portion decreases over time.

Example

Rajesh — Mumbai business owner, LAP on &rupee;1.5 Cr flat for business expansion

Rajesh owns a 3BHK flat in Andheri, Mumbai valued at &rupee;1,50,00,000. He needs &rupee;90 lakh to expand his garment export business. He applies for LAP at SBI.

Step 1: Loan eligibility

Property value&rupee;1,50,00,000

LTV ratio (SBI)60%

Maximum loan&rupee;90,00,000

Step 2: EMI calculation

Loan amount&rupee;90,00,000

Interest rate9.75% p.a. (SBI LAP)

Tenure15 years (180 months)

Monthly EMI&rupee;95,443

Total interest&rupee;81,79,740

Total payable&rupee;1,71,79,740

Step 3: Upfront costs

Processing fee (0.5%)&rupee;45,000

GST (18%)&rupee;8,100

Total upfront&rupee;53,100

Step 4: Tax benefit (business use)

Annual interest (approx year 1)&rupee;8,72,662

Section37(1) — full deduction

Tax slab30%

Annual tax saving&rupee;2,72,108

Rajesh gets &rupee;90 lakh at &rupee;95,443/month EMI. Since he uses the loan for business, the entire interest is tax-deductible, saving him approximately &rupee;2.72 lakh/year in taxes. His effective interest cost after tax benefit is roughly 6.8% — significantly cheaper than an unsecured business loan at 14-18%.

FAQ

What is Loan Against Property (LAP) and how is it different from a home loan? ▼

LAP (Loan Against Property) is a secured loan where you mortgage an existing property you already own to get funds for any purpose — business, education, medical, debt consolidation, or even buying another property. A home loan, on the other hand, is specifically for purchasing or constructing a new property. Key differences: LAP has a lower LTV (60-70% vs 80-90% for home loans), slightly higher interest rates (9-12% vs 8-9.5%), and tax benefits only if the funds are used for business or property purchase. LAP offers more flexibility in how you use the money.

What LTV ratio can I expect for LAP in India? ▼

LTV (Loan-to-Value) for LAP typically ranges from 60% to 70% for residential property and 50% to 60% for commercial property. SBI offers up to 65% for salaried and 60% for self-employed. HDFC and Bajaj Finance go up to 65-70% for prime residential properties. The property is valued by a bank-approved valuer, and the valuation may be lower than your expected market price. Factors that affect LTV: property age (newer = higher LTV), location (metro = higher), type (residential > commercial), and borrower profile. Unlike home loans where LTV can be 80-90%, LAP is more conservative because the loan is not for the property being purchased.

Is there any tax benefit on Loan Against Property? ▼

Tax benefit on LAP depends entirely on how you use the loan amount. If used for business or profession, the entire interest is deductible as a business expense under Section 37(1). If used to buy or construct another property, interest is deductible under Section 24(b) — up to &rupee;2,00,000/year for self-occupied property, or the full amount for let-out property. If used for personal expenses (wedding, travel, medical, education, debt consolidation), there is no tax deduction on either interest or principal. Note: Section 24(b) benefit is available only under the Old Tax Regime. No principal repayment deduction under Section 80C for LAP (unlike home loans).

Can I prepay my LAP without penalty? ▼

Yes, for floating-rate LAP taken by individual borrowers, banks cannot charge any prepayment or foreclosure penalty — this is mandated by RBI (circular DNBR dated November 2014). You can make partial prepayments or close the entire loan early without any extra charges. This makes it financially smart to prepay whenever you have surplus funds — even a small prepayment in the early years can save significant interest because the outstanding principal reduces. Exceptions: fixed-rate LAP may carry a prepayment penalty of 2-3%, and corporate/non-individual borrowers may also face penalties. Always check your loan agreement for specific terms.

What are the current LAP interest rates in India (March 2026)? ▼

As of March 2026, LAP interest rates from major lenders are: SBI 9.15-10.85% (linked to EBLR), HDFC Ltd 9.50-11.50%, ICICI Bank 9.25-11.75%, Bajaj Finance 9.00-14.00%, Bank of Baroda 9.15-11.25%, Kotak Mahindra 9.50-12.00%. Banks offer lower rates to existing customers, salaried professionals, and for residential property with clear titles in metro cities. Self-employed borrowers and commercial property LAP typically attract higher rates. All major lenders offer floating rates linked to their external benchmark (repo rate). The effective rate depends on your credit score (750+ gets the best rates), income stability, and property type.

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