Top 5 Benefits Of Taking Loan Against Property In India

PROPERTY !!!! It is one of the most valuable asset for any individual which can serve array of purposes in times of trouble. Loan against property in India is the preferred choice after personal loans. It is a secured loan where banks provide a loan against a property or any valuable asset as a collateral.  The biggest advantage of this loan, is it available at low rate of interest as well as has longer loan tenure.  

The loan against property in India can be used for several purposes such as a business expansion, a wedding, investment in a commercial property or any other greater priority. Basically, this type of loan helps fulfilling a person’s needs in times of necessity.

Loan against property is given against any type of property such as commercial, industrial or others. The value of the property will determine the loan amount, which in turn will determine the EMI. There are banks as well as lenders who offer overdraft facility as well.

Who Can Apply For Loan Against Property In India?

Loan against property or LAP which is widely known term can be applied by any citizen on India. A person whether employed or self-employed if prefer to set up a new business or require a huge amount of money can apply for loan against property in India.

The property thus; kept as a collateral/mortgage and the loan amount is offered against it. The loan amount varies around 40-70% of the property’s market value. Loan against property in India is believed to be the most secure of all the loans with a lower lending rate when compared to other loans.

Top 5 Benefits Of Taking Loan Against Property In India

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1.Loan Against Property Is Secured Loan

There are good chances of getting a loan against property approved as it is a secured loan. The risk-factor of recovering money in case of a default, is difficult for the banks or financial institutions providing funds. Secured loans are a great way of improving credit score. The property title must be clear, and you need to furnish some other proofs to get the loan.

2.Loan Against Property Serves Variety of Fiscal Needs

You can use the loan amount to fulfill all your needs that fall under legal demands. There are not many restrictions as to how to utilize the funds when it comes to LAP. However, most people borrow against property in situations of huge funding requirement such as for education, medical costs, purchasing new house, travel plans, setting up a business, marriage etc.

3.Affordable EMI Routine

Mostly, LAP tenure is longer (say up to 10 to 30 years or lesser), than other loans. Thus, you have to pay smaller EMIs if you choose a longer tenure. If you do not mind a larger outstanding loan amount because of longer loan term, and are comfortable paying in installments, then LAP is the best choice as a loan type.

4.It Is Cheaper Loan Alternative

Loan against property is the cheaper loan compared to unsecured loans and thus, an effective way to meet your monetary demands during the times of financial need.

5.Loan Against Property Comes With Top Up

When you take a property loan, you can even opt for a top-up funding. The latter can be taken only on existing LAP. It is beneficial if you require additional monetary fix on the said property. Even for a home loan, some banks give the facility of taking a top-up loan.

Salient Features of Loan against Property In India

• The loan against property in India is processed quickly as compared to other loans. 
• For pre-closing the loan there are no penalties or charges which means you whenever you have sufficient money you can pre-close this loan without making an extra payment.
• It is a good approach to grow your business by utilizing the same property to take loan against and use it as a capital for your business; this way you can grow your business in a smooth way.
• One of the best thing about loan against property is that the ownership of the property is with the borrower only, it will not go to bank even when the property is as mortgage.
• In the case when, the credit paying ability isn’t there, the borrower can mortgage the property and reimburse the loan.
• When you go with loan against property it can give you large amount of money.
• The interest rate for Loan Against Property is comparatively low hence; it’s a good alternative when it comes to large amount of money borrowing.

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