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Loan against property (LAP) is a secured loan that people use to meet bigger expenses such as business expansion, child's education, medical emergencies, and weddings.
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Unlike home loans that provide tax benefit of up to Rs 200,000 per year on interest repayment and Rs 150,000 on principal repayment, LAP does not provide any tax benefit.
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Avoid over-leveraging on this loan as doing so can result in a loan default. You could end up losing the property against which you have taken the loan.
- Loan to value (LTV) ratio is generally restricted to 50-60 per cent of the property’s market