Reimagining LAP: A Full-stack Approach for Secured Credit

India’s housing and consumer credit market is growing at an impressive pace, projected to reach $724.2 billion by 2025. As this momentum continues, financial institutions are placing greater emphasis on asset-backed lending to ensure portfolio resilience and risk protection. 
At the forefront of this evolution is Loan Against Property (LAP), a secured credit product that allows borrowers to unlock the value of their owned real estate. As demand rises, lenders require modern, scalable platforms to manage LAP efficiently across origination, servicing, risk management, and compliance. 

This blog explores the key challenges in the LAP journey, how M2P’s platform addresses them with precision, and the transformational benefits it delivers. 

Let’s first look into the challenges in secured lending. 

Structural Inefficiencies Hindering LAP Growth 

1. Collateral Management 

Handling real estate collateral demands meticulous verification of ownership, titles, encumbrances, and regulatory compliance. Manual processes increase the chances of oversight, operational delays, and legal exposure. 

2. Risk Redressal in Origination 

Despite being secured, LAP requires a structured approach to mitigate risk at the origination stage. Challenges include inconsistent allocation of legal cases, delays in title scrutiny, and limited visibility into document sanction workflows—all of which can extend approval timelines and elevate risk exposure. 

3. Loan-to-Value (LTV) Calculation 

Accurate LTV calculation is essential to ensure that the loan amount aligns with collateral value. Inaccurate property valuation or regional price inconsistencies may lead to either overexposure or conservative lending, both impacting business goals. 

4. Asset Verification 

Validating property ownership, occupancy status, and existing liabilities is time-intensive and susceptible to fraud. Manual verifications and fragmented documentation hinder efficient loan processing. 

5. Repayment Tracking and NPA Management 

Timely tracking of EMIs, arrears, and pre-default signals is crucial to maintaining portfolio health. Legacy systems often lack real-time repayment visibility, making it harder to flag delinquencies early or take corrective actions. 

6. Litigation and Auction Handling 

Once an account turns NPA, lenders face operational and legal challenges in initiating recovery. Managing litigation across regions, provisioning, and executing property auctions becomes complex without integrated, real-time systems. 

As the market evolves, secured lending products like Loans Against Property (LAP), vehicle loans, and business loans backed by assets are set to play a bigger role in shaping India’s lending ecosystem. 

LAP’s Role in the Modern Loan Ecosystem 

Loan Against Property stands as a bridge between borrowers’ ambitions and lenders’ need for risk mitigation. By leveraging owned property, customers can access substantial funds at competitive rates, while continuing to use and own their assets. In a market where volatility and unpredictability are on the rise, LAP’s collateral-backed structure assures lenders of repayment security, making it a preferred product for safer lending and financial inclusion. 

Here’s why LAP is increasingly recognized as a cornerstone of India’s modern financial ecosystem: 

1. Collateral Backing 

Because LAP is secured by a tangible asset commonly residential or commercial property, it poses a lower risk for lenders. This directly translates into much lower interest rates compared to unsecured loans, making borrowing more affordable for individuals and businesses. 

2. Larger Loan Amounts 

With the security of property as collateral, LAP typically allows borrowers to access higher loan amounts—often up to 60-70% of the property’s assessed value. This makes it ideal for major expenses such as business expansion, higher education, or large personal needs. 

3. Longer Repayment Tenure 

LAP loans generally offer extended repayment periods, often stretching up to 15–20 years. This enables borrowers to manage EMIs more comfortably and align repayments with their cash flow. 

4. Flexible Use of Funds 

Unlike a home loan or vehicle loan, the end-use of funds availed through LAP is largely unrestricted. Borrowers, especially MSMEs and entrepreneurs, can use the funds for working capital, debt consolidation, business growth, or even personal needs. 

5. Continued Ownership and Utility of Asset 

Borrowers retain ownership and use of their property throughout the loan tenure. If repayments are made on time, there is no disruption to the use of the assets. 

6. Improved Portfolio Stability and Growth 

From a lender’s perspective, LAP loans add stability to the overall loan portfolio, especially important during periods of economic fluctuation or when unsecured delinquencies are rising. Asset-backed products have a proven record of resilience in both good and turbulent times. 

Redefining Secured Lending with M2P’s Loan Against Property Platform 

At M2P, we are transforming how financial institutions launch, scale, and manage their Loan Against Property (LAP) portfolios. In a market where agility and precision are paramount, our platform eliminates the inefficiencies of legacy systems and empowers lenders to build a future-ready secured lending business. 

Our platform is built on a modern microservices framework, allowing financial institutions to integrate seamlessly with existing systems or launch new products rapidly. Whether you're digitizing origination, automating underwriting, or streamlining collections, each module is designed to work independently or as part of a cohesive ecosystem. From onboarding and KYC to disbursement, servicing, and closure, M2P covers the entire LAP journey. Our deep domain expertise ensures compliance, operational efficiency, and customer-centric workflows. 

Here’s an overview of the key features that make M2P’s LAP platform a comprehensive solution for modern lenders. 

Seamless Onboarding & Origination 

• Lead capture, co-applicant management, and data validation workflows 

• Automated case allocation to empaneled lawyers and valuers 

• Real-time CERSAI input and property inspection report capture 

Centralized document repository and digital sanction documentation 

• Powerful Underwriting & Risk Assessment 

• Automated credit bureau checks and income verification 

• KYC completion, co-applicant management, and holistic profile assessment 

Intelligent Collateral & Security Management 

• De-duplication of security, detailed property profiling, and templated setup 

• Central vault for property documents and mapping of existing loan exposure 

• Automated and dynamic LTV calculation 

End-to-End Loan Management

• Configurable ROI adjustments, pre-EMI handling, and post-disbursal servicing 

• Event-based tranche disbursals and full repayment lifecycle tracking 

• Flexible EMI scheduling and multi-NACH setups 

Advanced Risk & NPA Controls 

• Auto asset classification, provisioning, and LAP-specific accounting 

• Auction and litigation tools including SARFAESI workflows 

• Manual or automated updates on auction status and legal progress 

As regulatory demands and operational complexity continue to evolve, lenders need more than just tools, they need a future-ready partner.  

Beyond Technology: M2P as Your Strategic Lending Partner 

M2P delivers a powerful, all-in-one platform to help you build, scale, and manage your secured loan portfolio with ease. 

• Unified Platform Experience - Gain complete control over the complete loan lifecycle all within a single, integrated environment. 

• Modular & Flexible Architecture - Use individual modules or deploy the full suite, tailored to your business model and operational goals. 

• Empowered Business Teams – Intuitive platform enables business teams to configure and manage workflows independently, without relying heavily on IT. 

• Highly Configurable Workflows - Adapt to any loan product or property type with customizable rules, validations, and process flows that align with your credit policies. 

• Enterprise-Grade Scalability - Built on a cloud-native, microservices architecture, M2P ensures high performance, reliability, and effortless scaling as your portfolio grows. 

Ready to Elevate Your Lending Game? 

Schedule a demo with our product specialists for a live demo and experience the future of secured lending today. 

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