Should You Use a Loan Against Property for Home Improvement?


A home, when built newly, looks good for a few years down the lane, but with time, things start getting old and need renewal. You might want to give your home a fresh new look but are unable to do so because the requirement of funds is higher than you can afford to shell out at one time. Borrowing money through different sources is a possibility but the high-interest rates could be a deterrent. 

A loan against property EMI calculator can show you why this kind of loan should be considered as a possible solution to your problem.

What Is Loan Against Property?

This is a secured loan where you can take a loan by mortgaging your property. The lender evaluates your property and approves of a percentage of that value as a loan. Loan Against Property does not come with any restrictions on the usage of the money and you can use it for multiple projects or requirements. It can also be used for home improvement.

What Are the Requirements for Eligibility?

First and foremost, you must have a property that is free of any dues, mortgages or litigations. The age of the applicant is also important to show that he still has the capacity to earn. Most lenders require the applicant to be in the age band of 18-65 years. The upper limit is the age at the time of maturity of the loan. The approval of the loan, its interest, and tenure varies with the current financial status of the applicant. 

What Documents Are Needed for the Application? 

The applicant would need to provide documents to establish his identity, his address, and his capability for repaying the loan. The documents of the property will need to be handed over to the lender, though that does not take away the rights to use it from the borrower. It allows him to utilize the full potential of the property through this loan. Once all documents are in order and the property papers are verified, the loan can be approved. 

Why Loan Against Property?

The possible opportunities for loans can be presented as a home improvement loan, personal loan or a loan against property. This is how the three compare:

  • You can use it for any purpose and are not restricted by terms and conditions as it is in the home improvement loan.
  • You can get 60-70% of the property of the value as a loan. Personal loans and Home Improvement Loan (HIL) have an upper limit on the amounts you can borrow.
  • The interest rates for LAP are lower than the other two.
  • The tenure for LAP is longer as compared to personal loans and HIL.
  • You can avail of tax benefits on loan against property. For a personal loan, it is available only if the loan amount is used for business. To avail of a HIL, you first need to have a home loan and top it up to avail the benefits.
  • You can always choose to close your loan early with low or no extra charges.

Of all the three loans, the LAP works out to be the best and least stressful option based on the three key factors of the loan amount, the interest rate, and the tenure. So, if at all you wish to take a loan to carry out home improvement, that should be your first choice.


If you are considering a loan for home improvement, you must study the three loans thoroughly, consider the above pointers and decide. The loan that you take must be repaid on schedule to avoid any loss of assets. This applies to all loans but more specifically to LAP. Be wise in your decision and be regular in paying your EMIs.



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