How and why LAP is Used for Consolidating Debt?

Consolidating Debt

Loans are perfect for situations that require immediate cash. Even if we don’t have a lump sum amount, we can fulfill a financial need with a Consolidating Debt.

We can always repay the loan in small parts to become debt-free. Sometimes, people fail to repay loans within the given tenure and increase their overhead debt.

Being in debt will bring no good to an individual. Many people look for another loan to consolidate the debt for the same rationale.

Many people prefer taking a loan by using any property as security in India. Read on to understand how a loan secured via a property used as collateral can help consolidate debt.

Are you familiar with LAP loans?

A LAP (Loan Against Property) is a secured loan option for individuals in India. One can use a property (commercial or residential) as security and take a loan.

Since the property is being used as security, loan providers are more likely to approve. Loan providers in India feel that there is less credit risk associated with secured loans.

Usually, one can get up to 70% of the property’s market price as a LAP in India. The best part about a LAP is that it can be used for multiple reasons, from medical bill payment to debt consolidation.

Are you familiar with debt consolidation?

Often, people  end up having multiple debts or pending loans on their  heads. When a loan is  pending, the interest charge on that keeps on increasing.

Debt consolidation is the process of eliminating multiple loans by taking a single loan from a lender. After debt consolidation, the borrower will focus only on a single loan. One will not feel the pressure of multiple debts and increased interest charges.

A LAP can provide you with a lump sum amount based on the property’s price. The amount can be used to eliminate multiple loans and focus only on one.

Why is LAP helpful for debt consolidation?

Here are the reasons why you should consider a LAP for debt consolidation:

Less documentation

How are you planning to clear all the pending debts immediately? You might not get approved for a personal loan with many pending debts. It is because the lender will look at the pending debts and judge the repayment capacity.

On the other  hand, a LAP can be processed quickly, considering it is a secured loan. Loan against property documents required is minimum with a reliable NBFC like SMFG India Credit.

The best part is that one can apply for a LAP online on SMFG India Credit. Since there is less documentation for a LAP, one can clear overhead debts immediately.

Less pressure of interest charges

Every time you miss a loan EMI, a penalty is added by the respective lender. Also, lenders tend to increase the interest charge for individuals missing out on installments.

When there are multiple debts, the interest charge might be heavy. A person might not want to pay increased interest charges on debts or pending loans. In such a case, you can apply for a LAP and clear all the pending debts.

It will remove the interest burden from your head immediately. After debt consolidation, you will pay interest only on the LAP and not on multiple loans.

Higher approved amount

When people have multiple debts, they seem to have no option left. Since the debt amount is high, they cannot think of such a lump sum amount.

However, a loan against property is a valid option for securing high funding. You can secure enough funds to clear debts if your property is in a good locality. A reliable lender like SMFG INDIA CREDIT  can offer 60% to 70% of the property’s value as a loan.

Lengthy repayment term

A loan against property comes with a lengthier repayment tenure. When the repayment term for a LAP is long, the EMI amount will be small. You can easily pay the EMIs and never fall into the pit of debt again.


Debt is a pit that no one wants to fall into. If you are caught up in debt, a LAP is a right option to repay that. By using a property as security, you can clear pending debts and become debt-free again. SMFG India  Credit can help you with a LAP with affordable interest. Apply for a LAP online right away!

Frequently Asked Questions

Q1: What is LAP?

A1: LAP stands for Loan Against Property. It is a type of secured loan where individuals use their property as collateral to borrow funds from a financial institution.

Q2: How is LAP used for consolidating debt?

A2: LAP can be used for debt consolidation by leveraging the equity in a property to secure a loan. Borrowers can use the loan amount to pay off multiple high-interest debts, such as credit cards or personal loans, consolidating them into a single, more manageable loan.

Q3: What are the benefits of using LAP for debt consolidation?

A3:Lower Interest Rates: LAP typically offers lower interest rates compared to unsecured loans, leading to potential cost savings.

Extended Repayment Period: Borrowers may enjoy longer repayment periods, making monthly payments more affordable.

Single Monthly Payment: Consolidating debt with LAP results in a single monthly payment, simplifying financial management.

Q4: Can any property be used for LAP?

A4: Generally, residential or commercial properties owned by the borrower can be used for LAP. The property should have clear titles and meet the eligibility criteria set by the lending institution.

Q5: How does LAP differ from other forms of debt consolidation?

A5: Unlike unsecured debt consolidation loans, LAP involves pledging collateral, which often leads to lower interest rates. This can be especially beneficial for individuals with significant equity in their properties.

Q6: Are there risks associated with using LAP for debt consolidation?

A6: Yes, there are risks. If the borrower defaults on the LAP, they may risk losing the property pledged as collateral. It’s essential to carefully consider the financial situation and have a repayment plan in place.

Q7: How do I determine if LAP is the right choice for debt consolidation?

A7: Consider factors like the interest rates, loan terms, and the value of your property. Compare these with other debt consolidation options and assess your ability to make timely repayments. Consulting with a financial advisor can also provide valuable insights.

read more articles

You might like

About the Author: admin

Leave a Reply

Your email address will not be published. Required fields are marked *