A loan against property (LAP) is perfect to resolve any financial troubles, because it does not have any restriction on how the funds should be used. It can be easily availed if you as an applicant can provide all the necessary documents and are the owner of the property against which the funds are to be requested. You can get up to 70 percent of the property’s value in the market.
The bank/NBFC with whom you have applied for the loan will evaluate the market value of the property, verify the property documents, check for any pertaining legal issues, and analyze your repayment capacity, before approving and disbursing funds.
You can click here to understand complete details of LAP and know the top providers of the same.
Below given are some of the benefits of mortgaging your property to obtain finances:
- Loan for all Purposes
LAP can be used for any financial purpose. Most utilize the funds for business capital, wedding, travel, medical treatment, education, big-ticket purchase, and more.
- Funds Against Different Properties
You are eligible for a property loan on self-owned commercial/residential/industrial property. If there is an empty plot of land then confirm with the bank/NBFC if loan can be available on it, or not.
- Collateral Loan
Taking a property loan has more than one benefit. Since this loan is secured, where the financial institution keeps the property document as collateral, till the loan amount with interest is paid completely, the eligibility criteria is relaxed when it comes to personal credit score, income, and other factors.
- Pocket-Friendly Loan
The cost of a loan against property is usually less than any unsecured loan. It is because of the charges, penalties, and interest rates being lower than the latter. LAP carries rate of interest between 11% and 16%, than up to 24%, as seen in case of personal loans and up to 36% in case of credit card loans.
- Repayment Options
You can either take overdraft facility or pay the amount back by opting for regular EMI scheme. The overdraft limit is confirmed after analyzing your property’s current value in the market and your account history.
There is no compulsion to carry the loan to the end of the tenure as per loan agreement. You can always close and repay the loan earlier without being charged any prepayment penalty. Thus, you can clear the debt according to your convenience.
- Flexible Tenure
LAP has a flexible tenure, and you can choose either a short tenure between 5 and 10 years, or a longer one up to 15 years, as per your income and repayment capacity. Flexible tenure makes it easier to plan out your finances and arrange the necessary EMI amount without stressing the pockets.
- Top-Up on Existing Loan
There is an option to opt for a top-up on an existing property loan. However, when taking a top-up loan, you should compare the charges, tenure, interest rate, terms and conditions for the same.
By going through the above-given details, it is evident that a loan against property can provide for your monetary needs not just by providing the right loan amount, but in terms of affordability and flexibility of other conditions as well.