Loan against property must know Advantages
In times of financial trouble, a loan can act as a life savior. One loan that can be a solution to numerous financial problems is loan against property (LAP). Loan Against Property is a secured loan which is provided against the mortgage of a property.
LAP can be applied by people who are self-employed and are in need of a huge amount of money. By applying for LAP, they can secure funds without renting or selling out their property.
When once applied for LAP, the property of the borrower is kept as a mortgage. The loan amount varies around 40-70% of the market value of the property.
Can Be Obtained Easily
Obtaining Loan Against Property is not much of a hassle. Once the borrower presents security (read – property) and gets an approval on it, loan sanction doesn’t take too much time.
Can Help in Fulfilling Various Purposes
Loan Against Property can be used for a number of purposes, such as:
Interest Rates Are Low
Loan Against Property can be one of the best options to opt for as the interest rates of this loan are comparatively lower. Usually the interest rate of Loan Against Property ranges between 11.5% – 13.75% while for personal loan it hovers between 16% – 20%.
Longer Repayment Tenure
Nothing can be more beneficial for a borrower than getting a longer repayment tenure. Loan Against Property offers the borrower a longer repayment tenure, generally between 10-15 years which eventually eases out the burden of EMI(s).
Optimum Use of Idle Property
Many people own a property that lies unused for a long span of time. To make optimum use of such property, you can secure a loan against it. This allows the borrower to retain ownership of the property, and at the same time have an opportunity of acquiring a loan at a low interest rate too.
In case you acquire the loan, but are not able to repay the amount, you have the flexibility of selling off the property and settling the loan amount. This gives you a chance to continue the ownership of the loan secured, along with the benefit of having surplus cash as well.
Flexibility of Loan Amount
Another benefit of Loan Against Property is the possibility of securing a larger amount of funding. The lenders allow flexibility of loan amount, depending on the type and value of the property.