Understand How You Can Reduce lap interest rate in 2023

As we welcome the new year, it is essential to understand that the loan against property (LAP) interest rates is an important aspect to watch out for. LAPs have gained significant popularity given the relatively lower interest rates as compared to personal loans and unsecured credits. However, the interest rates tend to vary from one lender to another and thus reducing the loan against property interest rate is necessary.

The most significant factor affecting LAP interest rates is the Reserve Bank of India’s (RBI) repo rate as it impacts the overall lending and borrowing rates. RBI decreases the repo rate to encourage economic growth by allowing banks to lend money at lower interest rates, thus reducing the LAP interest rates. However, banks tend to be cautious and do not immediately pass on the benefits to the customers. Hence, borrowers need to be aware of how to reduce interest rates.

Let’s have a look at a few steps that can help reduce your LAP interest rates in 2023:

  1. Maintain a Good Credit Score

A credit score is an essential factor that lenders consider when processing loan applications, including LAPs. A score of 750 or above improves your chances of getting the loan approved and that too with a lower interest rate. It reflects positively on your credit history and shows that you are a responsible borrower.

  1. Compare Different LAP Offers

Different lenders have varying LAP interest rates. Hence, comparing different offers is crucial to get a lower LAP interest rate. There are many online portals where you can compare the LAP offers of different banks, and choose the one with the lowest interest rate.

  1. Negotiate with the Lender

Lenders tend to have a certain margin when it comes to interest rates. If you have a good credit history and a healthy relationship with your lender, it might be worth trying to negotiate the LAP interest rate. If the lender values you as a customer, they might reduce the interest rate.

  1. Opt for a Higher Down Payment

When applying for the LAP, the lender considers the property’s value and the amount you want to borrow. If you opt for a higher down payment, the amount you need to borrow reduces, which means you are likely to get a lower LAP interest rate.

  1. Prepaying the LAP

The goal of prepaying the LAP is to reduce the interest rate burden, which can save you a significant amount of money. Prepayment can be made in parts, or you can choose to complete the payment entirely. Either way, the interest rate decreases, providing you with a chance to save money and reduce the financial burden.

  1. Balance Transfer

A balance transfer is moving the loan from one lender to another. It is an ideal option if you are not satisfied with the interest rate offered by your current lender. Balance transfer helps you find a lender that offers a low-interest rate, and it provides flexibility in terms of repayment options while apply for a loan against property.

  1. Increase the Loan Tenure

Increasing the loan tenure can help to lower the LAP interest rate, but this option may not be suitable for everybody. The longer the loan tenure, the lower the EMI (Equated Monthly Instalment). However, it means that the borrower will end up paying more interest in the long run. Hence, carefully consider your financial situation before selecting the tenure.


Reducing the LAP interest rate is a crucial factor that can significantly save you money in the long run. A few easy steps like maintaining a high credit score or opting for a higher down payment can help reduce the LAP interest rate. With the above steps, customers can get a low-interest rate, which provides financial relief, reduces the financial burden, and helps fulfil your financial requirements. It is crucial to be mindful of the interest rates as higher interest rates may result in difficulties in repayment, creating a financial strain. Customers need to consider these points to choose the right offer that fits their financial requirements and choose a suitable repayment plan for LAP.

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