A loan against property is just that – a loan you get against a property you need to keep as collateral. This makes loan against property a secured loan. The borrower gives a guarantee of repayment using the property as the security.
The loan amount you get depends on the value of the property. Usually, lending institutes sanction a loan of, approximately, 65% of the value of the property.
The rate of interest for loan against property ranges from 12% to 16%.
The tenure for loan against property can be up to 15 years.
Loan against property is a fantastic way to arrange for funds when you want to meet any type of high expenses. The list below includes (but is not limited to) what it can be used for:
Setting up a business
Purchasing a new home/ land/commercial property
What type of properties can I take a loan against?
You can take a loan against:
Self-owned residential property
Self-owned and self-occupied residential property
Self-owned but rented residential property
Self-owned piece of land
Self-owned commercial property
Self-owned but rented commercial property
Your financial information, ability for repayment, and value of the property are most commonly assessed. But other common factors banks look at are:
Value of the property mortgaged
Your past repayment record for loans, credit cards, etc.
The long tenure of LAP makes the EMI more affordable
The loan amount is much higher as compared to a personal
As it is a secured loan. the rate of interest is lower compared to any other unsecured loan
You have the chance of liquidating LAP whenever surplus funds are available without incurring prepayment penalty
LAP can be easily refinanced through other lending institutes