Why Loan Against Property is Best for Fulfilling Your Expenses Need

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loan against property

We all have dreams and desires but are often unable to pursue the same due to financial constraints. Whether you want to set up a new business, go to a reputable institute overseas for education, or host a grand wedding at your dream destination – all these require substantial funds capable of depleting one’s year-long savings. However, with a plethora of financial tools available in the market today, one can fulfil these tasks and responsibilities easily. One such tool is a loan against property. 

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A loan against property is a type of secured loan that allows you to keep your property or asset as collateral with the lender in exchange for funds. Here in this article, we will look at the various reasons why a LAP loan could be the best bet for your expenditures. 

Top Reasons Why a Loan Against Property is the Best Solution for Your Expenses

A property loan comes with a number of benefits and exclusive features that contribute to its popularity among borrowers. Here are the top reasons why you should also consider opting for it.

Substantial Loan Amount

If you are in need of a huge amount, a loan against property should be the ideal choice since most lenders offer a sizable loan amount up to Rs.5 Crore or even higher. Thus, for someone looking to expand business or invest in a new venture, such a hefty loan amount can prove beneficial. 

Extended Tenor

The repayment tenor for LAP loan is typically longer as compared to other types of loans. It can extend up to 18 years, which gives the borrower ample time to arrange funds and pay off the loan amount. 

Competitive Interest Rates

Loan against property interest rates is relatively lower and affordable due to the secure nature of this type of loan. Lenders usually offer rates starting at 8.25% based on your profile, repayment history, credit score, etc. 

Also, take note of the different types of property loan interest rate offered i.e. fixed rate of interest and floating rate of interest. Speak with your lender regarding the two before you come to a decision. 

Zero or Nominal Prepayment and Foreclosure Charges 

As per RBI guidelines, borrowers opting for floating LAP interest rates need not pay any additional charges on loan prepayment or foreclosure. 

No End-use Restrictions

As stated earlier, there is no limitation on using the funds borrower under LAP. The borrowed money can be utilized to meet various business and personal goals. The lender will never ask you where or how you plan to spend the borrowed amount. 

Continued Ownership

Mortgaging your property for funds does not mean you have to give up your legal rights. You can continue having ownership of the property while utilizing the loan amount to fulfil your immediate financial goals. 

Easy EMIs

With property loans, you can get affordable EMI options by opting for a longer repayment tenor. Use the online LAP EMI calculator to get an estimate of the amount that you will need to pay on a monthly basis. Smaller EMIs make the repayment procedure much easier. 

How to Use LAP EMI Calculator 

Using an online calculator is very simple. You can access the same by visiting the lender’s website. All you have to do is enter the loan amount, chosen tenor, and rate of interest, and your monthly payable EMI will be displayed on the screen. An accurate idea of your monthly EMI obligation will help you develop a clear idea of how you will manage your loan EMIs each month. 

A Step-by-step Guide on How to Apply for a Loan Against Property

You can apply for a LAP loan either offline or online. While the offline procedure requires the borrower to physically appear at the nearest branch of the chosen lender, the online procedure can be completed anytime from any part of the country. Here’s how you can apply for loan online:

  • Access the application form on the lender’s portal and fill it with your details – name, address, age, employment status, income, property details, etc. Submit the online application along with all documents to support the loan claim. 
  • Wait till the lender’s representatives get back to you for quick verification. Once this is done successfully, you will have your loan sanctioned by the lender. 
  • The next step involves a complete evaluation of the pledged property. The lender’s representatives will study the property thoroughly to rule out any legal disputes before approving the claim.
  • Finally, the loan amount will be approved and disbursed to your bank account within 3-4 working days. 

The online procedure is undoubtedly a faster alternative. Besides, the fact that one does not need to run here and there for tedious paperwork is what makes it all the more hassle-free. However, if you have any queries regarding property loan application, you can always connect with the Customer Care Team of your chosen lender for assistance. 

Also, make sure you have compared different LAP interest rates and policy terms to get the best deals before signing on the dotted line.