What is Loan against Property?
Loan against property is nothing but a loan which you avail by keeping your commercial/residential property as a collateral. The security in this kind of loan is the property owned by the person applying for the loan. The value of your property decides the amount of potential loan you will be sanctioned.
What is the difference between home loan and loan against property?
A home loan is a loan that is taken to facilitate the purchase or construction of a new home; that is, the property does not already belong to the loan applicant. Whereas, a loan against property is taken by keeping an existing property as security, with the loan taken being used to fulfil a variety of purposes.
What is the Purpose of Loan against Property?
To Fund your child’s education abroad
For funding any medical emergency
For the Wedding of your child
To fund a dream vacation
For Business expansion
What are the Kinds of properties against which you can take Loan :
You can mortgage a self-occupied house as well as a rented residential property or it can be a piece of land that you own. However, it is necessary that the property is free from any kind of mortgage of litigation. Basically, the title of the property should be clear.
What are the Advantages
Simple approval process : As the scrutiny of a loan application is relatively lighter and that loans are secured, the process of approval for availing a LAP is comparatively simpler. In the case of unsecured business loans, where the risk factor is greater due to the absence of collateral security, the screening process for it is elaborate and time-consuming. In the fast-changing world of business, opportunities are short-lived. The relatively simpler and quicker loan approval process often proves crucial in allowing a business owner to take the advantage of a market opportunity.
Lower interest rates : Since LAP is a secured loan, the interest rates are generally lower, when compared to various other types of loans available in the market. For a borrower with a favorable credit score and borrowing history, the low-interest LAP can prove to be the instrument of choice for meeting a wide range of financing requirements.
Flexible repayment tenure : A LAP comes with flexible repayment tenure, lasting anything between 10-15 years or even 20 years in case the loan amount is high. This gives the borrower plenty of time to repay the amount and thus reducing any unnecessary financial burden on his venture.
Moreover, the borrower gets the option of repaying their debt through equated monthly installments, or as overdrafts. The borrower’s credit score and account history, along with the value of their property, determines the overdraft limit.
Continuous ownership : In LAP the borrower continues to retain the ownership of the property. So, if the borrower is unable to repay the amount for any reason, they have the option to sell the property and settle the loan.
Pre-closure : LAP comes with an option to pre-pay the loan amount without penalties, except if the loan was on a fixed interest. This means that the overall interest burden and the tenure of the loan can be reduced by paying a small additional cost.
Optimum use of a property : Loan against property helps in unlocking the hidden value of a property. In case a borrower needs funds and he has a property to offer as collateral, he may consider leveraging the value of the property to satisfy his financial needs.
That way, the borrower can retain ownership of the property and can still secure a loan at a comparatively low rate of interest.
Eligibility
You are eligible if you are:
| Service | Price | GST | Total |
|---|---|---|---|
| Loan Against Property Application Processing ( Other than any fees payable to 3rd Party) | 2000.00 | 360.00 | 2360.00 |
