LAP is one of easiest financing option available currently in the market. It is provided by taking property as a mortgage. It is a common misconception among the borrower community that final loan amount should depend only on the final market value of the property. Usually, borrowers ask for questions like why I shouldn’t get a loan amount of 80 lac at least if my property value is Rs 1 Cr? This question is quite natural and you will get the answer to this in the following discussion.

Yes, we agree that property value plays an important role in the final amount of your loan application but it is not the only factor on which final loan amount is decided. Your final loan amount depends on several factors like mentioned below-

Market value of property – LAP is a loan given by taking property as the mortgage. It is very important that property being mortgaged has clear title and is free of any legal disputes. These two are the minimum requirement for taking property as the mortgage. In addition, the property should be easily marketable and sale-able in the case of default. Usually, banks provide a loan of 70% to 80% of market value of property.