Loan against property, also known as LAP, is a loan facility extended to a borrower who pledges a property to the financier to get a credit amount. The loan is secured as the property is held collateral in the bank. The advance extended depends on the value of the property being kept as security. All public and private sector banks, Non-banking financial corporations, credit societies provide the loan against property. The loan can be used for various purposes like revamping the business, extending the business activities, and for personal reasons as well.

A loan against a property calculator is an advanced tool created by financial institutions for the convenience of customers. The purpose of the tool is to simplify EMI calculation for the amount to be borrowed from the lender.  It helps in better planning of finances and gives an estimate to the applicant about the loan amount he/she will be availing and the equated monthly installments to be paid every month. The EMI amount presented by the calculator includes the part of both interest and the principal amount. The interest in the initial phase of the loan tenure is more and then reduces gradually. 

Benefits of LAP calculator

The LAP calculators available on the website of financial institutions are a great measure of knowing the intricacies of the loan.
Some of the benefits of the calculator are listed below:

Factors affecting LAP calculations

The LAP calculators available on the website of financial institutions are a great measure of knowing the intricacies of the loan.
Some of the benefits of the calculator are listed below:

• Loan Amount: The loan amount relies on the estimation of property to be sold. Higher the credit against property sum, higher will be the EMI.
• Rate of Interest: Rate of interest is the most common parameter which decides the EMI amount. Higher the ROI charged by the lender, the higher will be the installment to be paid every month. The interesting part is more in the initial years and recedes in the later segment.
• Loan Tenure:The longest tenure for which the loan is available in 20 years, and it depends upon the age of the borrower. Longer the tenure, lesser will be the installment of the loan. The below table shows the EMI for a loan amount of 2 Lacs with different tenures in consideration. The rate of interest used for the calculation purpose is Starting from 1.25% per month.

Calculation parameters of calculator

The EMI calculated is based on the following formula:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

Documents to apply for a Loan Against Property

The documents required to process the loan against property are as follows:

Loan Against Property EMI Calculator FAQs

1. How does the lending bank decide on the amount I can get as a loan against property?

The lending bank determines the loan amount against property based on several factors, including property value, income, creditworthiness, and loan-to-value ratio, ensuring it aligns with your repayment capacity and the property's appraisal.

2. How is the rate of interest on a loan against property calculated?

The rate of interest on a loan against property is typically calculated based on factors like the loan amount, loan tenure, borrower's credit score, and prevailing market rates. Lenders may offer fixed or variable interest rates based on these variables.

3.What variables are used to calculate Loan Against Property EMI?

Loan Against Property (LAP) Equated Monthly Installments (EMIs) are calculated using variables such as the loan amount, interest rate, and loan tenure. The EMI amount is determined by the chosen repayment period and the applicable rate of interest.

4. What are the conditions for a loan against property?

To secure a Loan Against Property (LAP), you typically need a property in your name, good creditworthiness, stable income, and an acceptable property valuation. Lenders may impose additional criteria based on their policies.

5.Is there a moratorium offered by banks on Loans against Property?

Yes, during financial crises like the COVID-19 pandemic, some banks offer loan moratoriums on Loan Against Property to provide temporary relief. However, eligibility and terms may vary, and it's essential to check with your specific lender for details.

6. How will I know if my Loan Against Property application is approved?

Once you apply for a Loan Against Property, the lender will evaluate your application, including your creditworthiness, property valuation, and other factors. You'll be notified of approval or denial after this assessment.

7. Can someone avail loan against property with the existing loans?

Lenders are cautious about the existing loans and will ask about the repayment status of the loan and might also require a document from the previous lender. But if there is no issue in the repayment of the loan, then there will be no issues in getting the LAP.

8. Is credit score a must to avail loan against property?

The credit score is required to check the creditworthiness of the borrower; however, with a loan against property, the processing can be done even with a bad credit score. As the person is giving the security of property, there is not much risk. Please note that the rate of interest will be higher in that case.

9. Is loan against the property calculator reliable?

The calculator gives a correct EMI amount and is highly reliable.

10. How can I use the calculator online?

The calculator is quite simple to use. You will behave to put the inputs as requires, and the calculator will present the EMI after execution.

11. Which all online portals have calculator facilities available?

The online calculator is available on many online portals. You can visit the official website of the lender to access the calculator.