The best type of loan against property for business in India

Every business owner needs capital to begin their journey of a startup. Not every person with the will to start a business has money in the bank to invest in any business activity. Hence, people rely on several ways like loans against gold ornaments, loan against property for business, personal loans, borrowing cash from friends or relatives to fund their business requirements. In this blog, we will see the suitability of a loan against property to start your business up.

However, let us first understand what a Loan against property is.

Definition of Loan Against Property:

The LAP or Loan Against Property is a type of secured personal loan. It is by nature a personal loan with the principal difference, which is the borrower provides collateral to secure the loan. Besides, the Loan Against Property differs from a personal loan in the following aspects:

  • Loan Against Property for business includes providing collateral to the loan lending institution to secure the loan. So, we can call it a secured Personal Loan.
  • Since banks offer 50% to 90% loan amount of the property’s value of the property, the eligibility criteria are so high. You have to match the norms provided by your lender.
  • A loan against property has a more lengthy tenure period compared to Personal Loans.
  • Under the LAP scheme, the interest rates are considerably lower than personal loans.

Type of LAP for your business

For any business, you can consider a loan against property that has two variants:

  • Term Loan – Under this scheme, the lender institution disburses the entire loan amount value to your current or savings account. Therefore, you are bound to serve the monthly from the very next month.
  • Overdraft – In this case, the financing institution approves the borrower a credit limit. You can withdraw money only up to that limit. However, the perks of an overdraft loan scheme for business is that you have to pay interest only for the amount you have used. However, you have to pay off the interest value each month. Besides, the accounts for overdraft loan needs to review and renew each year. So, once you withdraw money from this loan scheme, you have to present your financial statements to the bank annually.

Which one is suitable for business?

Some borrowers desire to lessen their liabilities over time. In that case, the term loan is an applicable option for them to pay off the entire loan in installments. Besides, the streaming overdraft account scheme is a very convenient option for business owners to save on the interest segment. Under the overdraft facility, you are free to withdraw and deposit the subject to the credit limit. In this way, you can save a lot of interest value in your overdraft account.


We hope this article has given you a brief concept on the suitability of a loan against property for business, but the prime question is where you can get LAP from. Almost every Assignment Help reputed Indian bank offer LAP for business at lucrative rates of interest. For better information, you can check their websites online and apply directly.

Leave a Reply