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6 Advantages of Loan Against Property That May Change Your Perspective


When you need immediate access to funds, a loan can serve as a saviour of sorts. Loans may be either secured or unsecured.

When you pledge an asset to a lender as collateral for a loan, it is known as a Loan against property or Mortgage loan. This categorises as a secured loan and is ideal for higher loan amounts. The asset pledged could be any kind of property, residential or commercial. And the lender could be either a Bank or NBFC (Non-Banking Financial Company).


Here below are some of the advantages of Loan against property (LAP):

Higher Loan Amount: Depending upon the lender’s policies, LAP lets you borrow up to 60% of the present property value.

Longer Tenure: Such loans usually offer tenure of up to 15 years, with the add-on option of making part or complete prepayment.

Lower Interest Rate: Since the loan amount is higher, and against a real estate or property asset as collateral, the interest rates tend to be lower and more affordable.

Lower EMI: LAP offers a larger loan amount over a longer repayment period. As a result, EMI's are spread out in smaller amounts. This reduces the financial burden on the loan applicant.

Loan can be utilised for multiple purposes: You can get a loan against property for a variety of purposes - be it education, business expansion, medical emergency or even debt consolidation.

Maximize the potential of property: The loan applicant is still the sole owner of the property even after the lender has sanctioned a loan against it. So, you can continue to stay in and use your property even after you’ve mortgaged it.

Now that we’ve highlighted the benefits, let’s update you on how to get Loan against property.

Loan against property eligibility:

Unlike unsecured loans where your current income determines the loan amount, in case of LAP the present property value along with age, income and credit history will determine the eligible loan amount and repayment terms. Once you have fulfilled the Loan against property eligibility criteria, the lender will start processing your loan application.

Documentation:

Along with the application form, you will need to provide proofs of identity, address and income. Further, you will have to submit all relevant property papers and a standing property valuation report. Once you submit all Loan against property documents required, the lender will verify this information.

Loan disbursement and other charges

After completion of all formalities, the loan is sanctioned and disbursed. Depending on the lender, there may be a processing fee, stamp duty and other charges incurred.

A loan against property (LAP) or mortgage loan is a multipurpose loan that can drive your dreams even as you retain full ownership and usage of the property being pledged. To apply for Loan against property, visit:  https://www.capitalfirst.com/loan-against-property

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