Home Equity Loan Calculator
Key Takeaway
Home equity loans allow borrowing against the paid-up value of your property. With 75% LTV, an ₹80 lakh property with ₹30 lakh outstanding loan gives ₹30 lakh in borrowable equity at rates lower than personal loans.
Home Equity Loan Calculator
Estimate maximum equity credit lines based on property valuation limits.
Equity Borrowing Summary
What to do next
Based on your Home Equity Loan Calculator, here are the tools you should try next:
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Unlocking Trapped Wealth
A Home Equity Loan (or Loan Against Property) allows you to borrow a lump sum of cash by pledging the paid-off portion of your home's value as collateral. Because the loan is secured by real estate, the interest rates are significantly lower than personal loans or credit cards.
The Business Expansion: Kartik's Lifeline
His original home loan is almost paid off; he only owes the bank ₹20 Lakhs.
This means he has **₹1.3 Crores in 'Home Equity'** (Wealth trapped in the bricks of his house).
Kartik's logistics business needs a ₹40 Lakh cash injection to buy new trucks.
A standard business loan will cost him 14% interest.
Instead, he approaches his bank for a Loan Against Property (LAP).
Because the bank has his ₹1.5 Crore house as collateral, they happily give him a ₹40 Lakh Home Equity Loan at just **9.5% interest**. Kartik successfully unlocked the dormant wealth sitting in his house to fund his business expansion at incredibly cheap rates.
Using Your House as an ATM: The Danger of LAP
You own a ₹1 Crore house, fully paid off. You decide you want to start a business, so you take a Loan Against Property (LAP) of ₹60 Lakhs.
It feels like free money. But a Home Equity Loan is mathematically and psychologically dangerous. When you took your original home loan, your goal was to buy an asset. When you take a LAP, you are collateralizing your primary shelter for high-risk speculation.
If your new business fails, you don't just go bankrupt—the bank seizes the house your family sleeps in. Before you use your home as an ATM, you must calculate the true cost of the debt and the absolute worst-case scenario using this calculator.
Frequently Asked Questions
What is a Loan Against Property (LAP)?
A Loan Against Property (LAP) is the Indian equivalent of a Home Equity Loan. You pledge your fully or partially owned residential or commercial property as collateral to secure a loan at lower interest rates than personal loans.
How much loan can I get against my property?
Banks generally offer a Loan-to-Value (LTV) of 50% to 70% of the current market value of the property for a LAP.
Are interest rates on LAP higher than regular home loans?
Yes, LAP interest rates are typically 1% to 3% higher than standard home loan rates, but they are significantly cheaper than unsecured personal loans or credit cards.
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