There comes many times in life when we need quick money be it for personal purposes such as treating an urgent medical condition that is not covered under medical insurance or marrying one of your children or a business expansion or any other expense that requires big amount of money. In situations such as these, a Loan Against Property is highly beneficial. You can leverage the potential value of your property and use it for covering your expense and pay off your loan in EMIs that suit you.

LOAN AGAINST PROPERTY

Loan Against Property’, is also known as mortgage loan. This is one of the types of a secured loan as collateral is involved. This means if you need this loan, you will have to hold your property as mortgage with the bank. Any property whether it is commercial or residential, can be used in order to get a loan against property. The main highlight of the loan against property is that you can get 40-65%* of the property’s value as the loan amount. Hence if you happen to have more than one property under your name, you can keep the costlier property as collateral. This will help you get a higher loan amount. The lender will evaluate your property and finalize the market value for it. On the basis of that value, you will get the loan amount.

For what purposes you can use Loan Against Property funds?

Customers need a loan for various reasons. You can get a loan against property for any of the below mentioned reasons:

• For funding and expanding your business potential
• To purchase new property/land by mortgaging existing property
• For marriage
• To fund emergency medical treatments
• To fund higher studies
• To fund a vacation
• For home renovation or expansion

What are the features of Loan Against Property?

• A borrower has to mortgage their residential or commercial property while opting for a loan against property.
• The interest rate on a loan against property is decided considering various aspects of the applicant’s profile like their monthly salary, income details of self employed individuals or businessmen, amount taken as loan etc. As this is a type of secured loan, banks and NBFC’s offer lower rate of interest for a loan against property.
• This is a long tenure loan as the repayment period can go up to a period of 15 years. Banks and NBFCs offer higher loan amount for longer tenure with exciting interest rates as compared to other loan plans.
• The borrower is also supposed to pay all the hidden and extra charges such as processing fees and administrative fees. The borrower also has to pay the Bank/NBFC for property valuation and its processing fees. Many banks ask to pay 1% of the loan against property amount sanctioned.
• The process of obtaining a loan against property is very quick and hassle free. Some banks approve the loan against property as quick as within three days.
• Loan against property proves to be the best way for debt consolidation. That means you can pay off multiple debts by bringing them under a singular debt.
• You can use your mortgaged property while repaying the LAP unlike gold where the gold ornaments remain with the banks or NBFCs and you don’t get them back until the loan is repaid in full.
• If the property is owned by partners or directors of a company, then a loan against property can be taken in the name of that firm.
• Change last sentence – Borrower can avail loans from Rs. 5 lakh onwards against a property, if they apply for a LAP.