Full formBanking & Finance
LALstands forLoan Against Land
Full Form of LAL
What is LAL?
Loan Against Land (LAL) is a secured credit facility where borrowers pledge their land as collateral to obtain funds from banks or non-banking financial companies (NBFCs). In India, LAL is a popular financing option for individuals and businesses needing capital for agriculture, real estate development, education, or medical emergencies. The loan amount is typically a percentage of the land's current market value, often up to 60-70%, and interest rates are generally lower than unsecured loans due to the collateral. LAL is widely used in rural and semi-urban areas where land is a primary asset, but it is also common in urban settings for plot owners. Borrowers retain ownership and use of the land during the loan tenure, subject to the lender's lien. The Reserve Bank of India (RBI) regulates such loans under priority sector lending guidelines, making them accessible for agricultural purposes. For competitive exams like IBPS PO, RBI Grade B, and banking awareness sections, understanding LAL is important as questions often cover types of secured loans and their features. LAL provides a flexible way to unlock land value without selling the asset, though default can lead to foreclosure.
LAL का फुल फॉर्म
भूमि के विरुद्ध ऋण
Example
The farmer secured a LAL of ₹15 lakh from the district cooperative bank to purchase modern irrigation equipment.
LAL — frequently asked questions
What is the full form of LAL?
LAL stands for Loan Against Land, a type of secured loan where land is used as collateral.
What is the difference between LAL and LAP?
LAL (Loan Against Land) is for vacant land, while LAP (Loan Against Property) is for built-up property. LAL typically has lower loan-to-value ratios.
Is LAL available for agricultural land in India?
Yes, many banks offer LAL for agricultural land under priority sector lending, often with subsidized interest rates for farmers.