HDFC Bank has reintroduced its loan against property (LAP) scheme in order to increase borrowings by people for personal purposes.

All Indian residents can avail this scheme for their properties in India against its current market valuation.

Customers already having home loan with HDFC can avail as much as 60% of the total value of their property as loan. Customers not having any loan with HDFC can avail up to 50% of the total value of the property as loan. The loan amount, however, depends on the eligibility of the customer for both cases.

For loans up to Rs. 1 crore, interest rate offered is 11.25% and for loans above Rs. 1 crore an interest of 11% is charged. The loan is available for a tenor of 15 years for both residential and non residential properties.

According to HDFC managing director Renu Sud Karnad, "One may not always be able to plan for a lot of things in life as both, opportunities and emergencies can be unexpected and could be equally important to be ignored. HDFC's loan against p roperty helps customers take advantage of such opportunities or attend to emergencies by making available one of the important ingredients required in both cases, which is funds.

"If you own a property, it can probably serve as the best possible avenue to generate a decent amount of funds within a short period of time while you continue to comfortably live in the house. Availing a personal loan from a lending institution may also be an option.

"However the advantage of LAP is that not only is the interest rate lower than a personal loan, but the tenure of the loan is also much longer. This enables a person to take a larger loan as compared to a personal loan where the period is very short which has a huge impact on the cash flow and thus the repaying capacity".